Provisions for Decommissioning and Dismantling of Gas Networks: New Requirements

10/24/2025
Reading time 3 Minutes

The energy transition is also having an increasing impact on financial reporting under commercial law. For example, the Institute of Public Auditors in Germany’s (IDW) Energy Committee (EFA) recently addressed the question of what accounting implications the climate targets for 2045 will have for gas network operators. This is due to the fact that the assumption of a permanent gas supply – the so-called “presumption of perpetual use” – which has often been applied to date, is no longer fully tenable in light of the goal of greenhouse gas neutrality by 2045. As a result, provisions for decommissioning and dismantling obligations are coming into significantly sharper focus when preparing financial statements under commercial law.

In a statement to the German Federal Network Agency (Bundesnetzagentur) dated July 25, 2025, the IDW points out potential differences between the treatment of provisions for decommissioning and dismantling under regulatory and commercial law. These differences may lead to significant challenges in financing. From a commercial law perspective, provisions must already be recognized once an external obligation exists and it is reasonably likely that the obligation will be called upon.

In the future, gas network operators must carefully assess whether obligations to decommission or dismantle may arise due to legal, contractual, or factual circumstances. This may also be the case even if no specific regulatory order has yet been issued. Various scenarios must be considered, ranging from continued use for alternative gases (e.g., hydrogen) to the complete abandonment of the infrastructure.

Valuating such obligations requires a thorough analysis of the expected compliance costs (including dismantling, disposal, environmental measures, etc.) as well as a realistic estimate of when these obligations will be asserted. In addition, regulatory developments – such as those under the RAMEN Gas draft or the implementation of EU Directive 2024/1788 – must be taken into account, even if they are not directly relevant for commercial accounting purposes.

For practice, this means that an early assessment of the accounting implications and close coordination between finance, technical departments, and legal advisors are essential. Companies should establish internal processes at an early stage to identify obligations, assess scenarios, and transparently reflect the accounting impact.

Conclusion and fields of action

With the elimination of the presumption of perpetual use, gas network operators may face decommissioning and dismantling obligations that result in a requirement to recognize these liabilities. Network operators should now systematically assess which network components will need to be discontinued, repurposed, or decommissioned in the future to ensure accounting certainty and secure future cost recognition. Provisions for decommissioning (securing, draining, disconnecting, etc.) and dismantling (removal, disposal) should also be recorded separately, and obligations should be carefully documented. The Federal Network Agency’s RAMEN Gas regulation and the implementation of EU Directive 2024/1788 will be decisive for future cost recognition. Companies are well advised to closely monitor further developments in the regulations and prepare decommissioning plans that comply with regulatory requirements (documentation, cost determination, approval requirements).