In the Netherlands, our investments in 2024 mainly relate to the conversion of certain customers from high to low calorific gas, the construction of the WarmtelinQ heat network, investments in the national hydrogen network, and to regular replacement investments. In Germany, we invested in the installation of the connection pipelines for two LNG terminals and in the construction of a new electrically powered compressor station.

For more details on our conditional investment obligations at year-end 2024 see note ‎29 ‘Off-balance sheet assets and obligations’.

Tangible fixed assets at year-end 2024 includes an amount of € 108.4 million (year-end 2023: € 97.4 million) for right-of-use assets arising from our lease contracts. We have economic but not legal ownership of these right-of-use assets. More detailed information on the associated lease liabilities can be found in note ‎19 ‘Lease liabilities’. Tangible fixed assets also includes a number of pipelines that are owned together with other network operators; this only concerns a number of German gas transmission pipelines, of which EUGAL and NEL are the most important. At year-end 2024, the carrying amount of our ownership share in these pipelines was € 478.9 million (year-end 2023: € 486.6 million).

Our assets largely comprise regulated assets. The regulatory authorities for the regulated networks in the Netherlands (ACM) and Germany (BNetzA) set the regulated depreciation periods and methods and the frameworks for determining these. In the methodology decision for GTS for the 2022-2026 period, ACM still assumes – based partly on their energy transition studies – a long depreciation horizon for the gas transmission network. For main transmission pipelines, this is up to as long as 55 years (i.e. after 2080 for investments completed in 2026). However, in its current methodology decision ACM has accelerated regulated depreciation in the Netherlands by depreciating the regulated carrying amount using the diminishing balance method so as to reflect the decreasing use of the transmission network in general.

In Germany, a change in the law means that the network operators will have a high degree of flexibility in determining the depreciation periods and methodologies for regulated services from 2026 onwards. This legal amendment also introduces the year 2045 as a possible end date for the depreciation of the German natural gas transmission network, in line with the German Climate Act and the country’s ambition to be climate neutral by 2045. However, German network operators are allowed to use a longer or (in certain contexts) even shorter depreciation period, depending on their own views on the use/repurposing of their networks.

In these financial statements, when determining the IFRS depreciation periods and methods we took into account the views of regulators ACM and BNetzA as well as those of the German legislator – as these stood at the end of 2024 – on the depreciation of regulated assets. These views may, in certain cases, differ from the view we apply based on the IFRS, given that – from the perspective of the legislator or regulatory authority – the depreciation periods and methods can be an instrument for the equitable distribution of the costs of gas transmission between current and future users. Having the IFRS depreciation periods and methods depend on the level of the permitted income or the realised revenue is not allowed.

Alongside the standpoints behind the formation of external regulation, another key consideration in determining depreciation periods and methods is our own view on the energy transition and environmental and climate targets, as well as on other social and geopolitical developments. This goes both for the regulated assets and for the non-regulated assets and the assets exempt from regulation. In our view, the existing gas infrastructure will continue to be needed in the medium to long term. In Gasunie’s vision, the energy system of the future will be an intelligent interplay of electrons and molecules. Natural gas transmission will remain important for as long as our economy needs it. Declining transmission volumes or society’s or our own ambition to achieve net-zero emissions does not necessarily make this less true.

In the Netherlands, an increasingly concrete long-term vision is emerging in the field of hydrogen and CCS, and the details are expected to become ever more clear over the coming years. A practical example of this is the start of the construction of the national hydrogen grid in the Netherlands at the end of 2023 and the Porthos CCS project in 2024. The hydrogen network is taking shape in Germany, too, as is Gasunie’s role in its development. As this long-term vision becomes ever-more concrete, a better understanding of the reuse of the current natural gas network and the consequences of this for the depreciation periods and methods will also emerge. We expect to develop a new Integrated Infrastructure Survey for the medium term in 2025 or 2026. This study can provide us with new insights that can help determine the depreciation periods and methods.

In our regular assessments of depreciation periods and methods, we also check whether there are any specific assets that will, in the medium term, no longer be used for the transmission or storage of gas and, in such specific cases, we may possibly amend the depreciation periods for these particular assets. This concerns installations that have been temporarily decommissioned, or could be in the near future; in such cases we depreciate these assets at an accelerated rate until the date of decommissioning. In the approach to the technical decommissioning, if we foresee an alternative use of these assets for hydrogen or CCS, we take into consideration the possibility of recommissioning the installations in the future. In such cases, we do not abandon the installations, but rather sustainably preserve them for the long term.

We have no indications that the expected useful life of the other regulated assets, non-regulated assets and/or assets exempt from regulation is shorter than the current depreciation period.

We depreciate right-of-use assets in accordance with the above categories; we depreciate leased land in accordance with the useful life of the asset with which the land lease is connected. We do not calculate depreciation on land, linepack/cushion gas volumes or assets under construction.