Posts Tagged Article 194 TFEU
Principles, principles everywhere. First test of the ‘energy solidarity’ principle in Poland v EC (Nordstream /Gazprom).
As I continue to dabble in research and talks about the innovation ‘principle’ (not in existence), and find myself in court (an attachment procedure following judgment in Israel) discussing the common law principle that ‘he who comes to equity must approach the court with clean hands’, the CJEU (General Court) yesterday in T-883/16 held Poland v EC a first test of the TFEU Energy title’s ‘principle of energy solidarity’. Note Poland’s litigant friends (Latvia; Lithuania), and the EC’s (Germany). This tells you something about energy security of supply on our Eastern borders.
Article 194 TFEU: ‘1. In the context of the establishment and functioning of the internal market and with regard for the need to preserve and improve the environment, Union policy on energy shall aim, in a spirit of solidarity between Member States, to:…’
The gas pipeline Ostseepipeline-Anbindungsleitung ﴾OPAL) is the terrestrial section to the west of the Nord Stream 1 gas pipeline. Its entry point is located in Germany and its exit point is in the Czech Republic. In 2009, the Bundesnetzagentur (BNetzA, the German regulatory authority) notified the Commission of two decisions that exempted the capacities for cross-border transmission of the planned OPAL pipeline from the application of the rules on third party access and tariff regulation laid down in Directive 2003/55. Those decisions concerned the shares belonging to the two owners of the OPAL pipeline. The same year, the Commission adopted a decision by which it requested the BNetzA to modify its decisions by adding certain conditions. Under those conditions, in particular, a dominant undertaking, such as Gazprom, could reserve only 50% of the cross-border capacities of the OPAL pipeline, unless it released onto the market a
volume of gas of 3 billion m³/year on that pipeline (‘the gas release programme’). In accordance with those three decisions of 2009, the capacities of the OPAL pipeline were exempted from the application of the rules on regulated third-party access and tariff regulation on the basis of Directive 2003/55. This decision was later (2016) slightly amended albeit not in substance.
Poland argue that the grant of a new exemption relating to the OPAL pipeline threatens the security of gas supply in the European Union, in particular in central Europe. Poland suggests that the 2016 decision breaches the principle of energy solidarity in that it enables Gazprom and undertakings in the Gazprom group to redirect additional volumes of gas onto the EU market by fully exploiting the capacities of the North Stream 1 pipeline. Taking into account the lack of significant growth in demand for natural gas in central Europe, according to Poland, that would, as its only possible consequence, influence the conditions of supply and use of transmission services on the pipelines competing with OPAL.
The General Court yesterday (the case no doubt may be appealed) held that the application of the principle of energy solidarity does not mean that the EU energy policy must never have negative impacts on the particular interests of a Member State in the field of energy. However, the EU institutions and the Member States are required to take into account, in the context of the implementation of that policy, the interests both of the European Union and of the various Member States and to balance those interests where there is a conflict. In neither the preparation of the 2016 decision nor its actual content is there any trace of the EC having considered the principle and its impact: the Decision is therefore annulled.
The case adds to the corpus of judgments where the CJEU is called upon to apply ‘principles’ and clearly emphasises preparatory due diligence, rather than second-guessing the actual application of the principle in substance.
(Handbook of) EU Environmental Law (with Leonie Reins), 2017, Part I Chapter 2.