European Union: REMIT II Explained

In brief

Regulation (EU) 2024/1106 (“REMIT II”) and its new Implementing Regulation, entering into force on 29 April 2026, significantly expands and intensify the EU wholesale energy market transparency regime. The revised framework affects a wide range of market participants, including electricity and gas traders, balancing service providers, energy storage operators, hydrogen producers and offtakers, as well as large or diversified trading portfolios. New obligations introduce faster reporting deadlines, broader and more complex data submissions, and forward-looking exposure reporting, reflecting a clear shift towards predictive regulatory scrutiny. While certain requirements (notably for hydrogen) will be phased in over time, the overall regime demands proactive planning: market participants should start reviewing their reporting systems, internal processes and contracts to ensure compliance with the new Regulation on Wholesale Energy Market Integrity and Transparency (REMIT) regime.

Key takeaways

• REMIT II and its Implementing Regulation substantially expand the scope of EU wholesale energy market regulation.
• Reporting obligations are broader, faster and more complex.
• Hydrogen markets are included but subject to a phased-in approach.
• Energy storage is regulated through existing electricity reporting structures.
• Balancing services move to mandatory periodic reporting.
• Exposure reporting introduces forward-looking regulatory scrutiny.
• Centralized data flows do not shift legal responsibility.
• REMIT II demands more automation, governance and contractual clarity.

In more detail

On 9 April 2026, the European Commission published its Implementing Regulation supplementing REMIT II which together materially update the EU rules governing transparency and integrity in wholesale energy markets. Despite being presented as a simplification of the original 2011 REMIT regime, the revised framework significantly broadens its scope, introduces new reporting layers, and shortens key reporting deadlines, increasing compliance obligations for a wide range of energy market participants.

At the crossroads of energy and financial regulation, REMIT establishes the EU’s core prohibitions against market abuse in wholesale energy trading and requires market participants to register and report market-relevant data. The 2024 amendments of REMIT II and its implementation reflect increased market complexity, the emergence of new energy carriers, and heightened regulatory scrutiny. Ultimately, REMIT II requires a higher degree of internal governance, automation and contractual discipline. Companies active in EU energy markets should therefore reassess their reporting frameworks and compliance strategies accordingly.

Expanded scope: hydrogen and energy storage

One of the most consequential changes under REMIT II is the expansion of its material scope beyond the dual-commodity model limited to electricity and natural gas. REMIT II expanded its scope to include innovative energy commodities and clean technologies such as storage and hydrogen installations, creating a level playing field for market participants regardless of the technology they utilize. This expansion reflects the growing influence of these technologies on energy markets and will significantly increase the volume of transactions subject to reporting.

Hydrogen is now expressly included in the definition of wholesale energy products (WEPs), covering supply, transportation and storage contracts. This reflects the EU’s objective of aligning emerging energy markets with financial-grade standards of transparency and integrity. The regulatory approach remains cautious: hydrogen reporting is relegated to the periodic reporting category with annual reporting applying only from 1 July 2028. Several exemptions further illustrate this phased-in approach notably for small hydrogen producers (≤50 MW), geographically confined hydrogen producers as defined in Directive (EU) 2024/1788), and small energy-intensive users (<600 GWh/year).

In parallel, REMIT II formalizes the regulatory treatment of energy storage. The Implementing Regulation adopts a “legal fiction” for Battery Energy Storage Systems (BESS): there is no separate “electricity storage” reporting category; instead, electricity injection and offtake are treated identically as electricity supply and must be reported using the existing Table formats. While this approach streamlines compliance by relying on established reporting structures, it should be considered alongside the enhanced oversight of balancing services, which are often central to BESS business models. Moreover, treating BESS transactions as conventional supply contracts may obscure certain technology-specific characteristics such as flexibility-driven risk profiles and rapid battery cycling that distinguish BESS from traditional generation assets.

Balancing services: from ad hoc to periodic reporting

A further structural change concerns balancing services. Previously reportable only upon an ad-hoc request from the European energy regulator ACER, balancing transactions now fall under mandatory periodic monthly reporting. Where a single contract (such as a Flexible Purchase Agreement) covers both market trading and the provision of grid-balancing services, market participants must ensure that the contract is reported under both applicable frameworks. Importantly, REMIT II confirms that the ultimate legal responsibility for the completeness, accuracy, and timeliness of reported data remains with the market participants (i.e., both counterparties), requiring careful contractual allocation of delegation mechanisms and related obligations.

A multi-tiered reporting architecture

REMIT II replaces the former binary distinction between continuous reporting and ad hoc reporting with a three-tiered reporting structure, designed to enhance ACER’s monitoring capacity while avoiding disproportionate burdens for lower-risk activities. This periodic category also serves as a pragmatic treatment for nascent or low-volume markets.

Periodic reporting - A formal periodic reporting category is introduced for market activities that were previously considered “insignificant" or reportable only upon ad-hoc request, such as electricity balancing services. This includes balancing transactions (monthly aggregated reporting), natural gas storage contracts with a duration of 12 months or longer, and hydrogen transactions (annual reporting from July 2028).

Continuous reporting – This type of reporting remains applicable to standard WEPs transactions but with materially revised deadlines. Within the continuous reporting category, the Implementing Regulation alters reporting timelines to eliminate perceived regulatory blind spots. The deadline for bilateral over-the-counter (OTC) contracts is shortened from one month to 10 working days, which forces participants to migrate from manual tracking toward more automated internal systems. The reporting deadline for Organised Marketplace (OMP) transactions is extended from one (D+1) to two working days (D+2), as a pragmatic concession to the immense data volumes generated by modern intraday and algorithmic trading. While OMPs now operate as the centralised channel for order-book data, market participants continue to bear full responsibility for reporting their bilateral OTC transactions, now at a pace nearly three times faster than under the previous regime.

Exposure reporting – Perhaps the most ambitious innovation is the introduction of exposure reporting. From Q1 2027, market participants with annual volumes of 600 GWh or more must submit monthly aggregated, forward-looking data covering net positions, forecasted production, and forecasted consumption for each of the 24 months following the reporting quarter.

This obligation marks a shift from ACER's retrospective monitoring towards predictive, ex-ante surveillance, aimed at spotting inconsistencies between financial hedging strategies and actual physical assets. Although framed as a “simplified”, aggregated framework, exposure reporting introduces significant technical and operational challenges, particularly given the inherent uncertainty associated with forecasts.

Streamlining data reporting

Alongside the new reporting architecture, REMIT II also seeks to streamline fundamental data reporting by shifting transmission to existing system operator infrastructures. Under the Implementing Regulation, entities such as the European Network of Transmission System Operators for Electricity (ENTSO E) and for Gas (ENTSO G) will technically submit certain production, consumption and transmission data on behalf of market participants via central transparency platforms. This data flow is channeled through the central information transparency platform, ensuring that ACER receives information as soon as it becomes available at the system-operator level.

However, REMIT II makes clear that this technical centralization does not shift legal responsibility. As such, this creates a “trust but verify” obligation where market participants are relieved of submitting the data themselves but are now contractually and legally required to implement rigorous internal procedures to audit the data submitted on their behalf. In other words, the administrative burden is not eliminated but shifted from technical data entry to legal and quality-control oversight.

Conclusion

Behind the objective of simplification, REMIT II and its Implementing Regulation introduce a more complex and demanding compliance landscape, particularly for participants active in balancing markets, storage and flexibility services, hydrogen projects, or large trading portfolios. Faster reporting deadlines, forward-looking exposure obligations and expanded scope all point to the need for stronger governance, automation and contractual clarity.

To assist clients in navigating this landscape, we have developed a practical REMIT II Waterfall assessment tool. To request a copy, please contact David Haverbeke or Emilie Malivert.

Illustration – Scope of application of REMIT II

This illustration shows an excerpt of the waterfall we have developed to visualise the scope of application of REMIT II. The waterfall provides a structured overview of how the rules should be assessed in practice. Please note that this is only a cut off of the full waterfall. The complete version can be shared upon request.