Explanatory Memorandum to COM(2017)660 - Amendment of Directive 2009/73/EC concerning common rules for the internal market in natural gas - Main contents
Please note
This page contains a limited version of this dossier in the EU Monitor.
| dossier | COM(2017)660 - Amendment of Directive 2009/73/EC concerning common rules for the internal market in natural gas. |
|---|---|
| source | COM(2017)660  |
| date | 08-11-2017 |
1. CONTEXT OF THE PROPOSAL
• Reasons for and objectives of the proposal
The creation of an integrated gas market is a cornerstone of the EU's project to create an Energy Union. The internal gas market is considered to function well when gas can flow freely between Member States to where it is needed most and at a fair price. A functioning gas market is a prerequisite for enhancing security of gas supply in the Union. Since gas is transported mainly through pipelines, the interconnection of gas networks between Member States and non-discriminatory access to these networks are the basis for the market to function efficiently. It is also a prerequisite for gas deliveries during emergencies, both between Member States and with neighbouring third countries. The EU is to large extent dependent on gas imports from third countries and it is in the best interest of the EU and gas customers to have as much transparency and competitiveness also on pipelines from those countries.
While EU law in general applies in the territorial waters and the exclusive economic zone of EU Member States, Directive 2009/73/EC 1 (hereafter 'the Gas Directive') does not explicitly set out a legal framework for gas pipelines to and from third countries. As a result, following legal analysis, it has been concluded that the rules applicable to gas transmission pipelines connecting two or more Member States, which fall within the scope of the definition of 'interconnector', are not applicable to such pipelines entering the EU. However, there is an practice of applying core principles of the regulatory framework set out by the Gas Directive in relation to third countries, notably via international agreements concerning gas pipelines entering the European Union. It is considered that legislative action is henceforth required in order to define and specify in an explicit and coherent manner the regulatory framework applicable to all gas pipelines to and from third countries.
With the proposed amendments, the Gas Directive in its entirety (as well as the related legal acts like the Gas Regulation, network codes and guidelines, unless otherwise provided in those acts) will become applicable to pipelines to and from third countries, including existing and future pipelines, up to the border of EU jurisdiction. This includes the respective provisions on third-party access, tariff regulation, ownership unbundling and transparency. It will also enable new pipelines to and from third countries to apply for an exemption from the above rules pursuant to Article 36 Gas Directive. As regards existing pipelines, which fall outside the scope of Article 36, Member States will be enabled to grant derogations from the application of the main provisions of the Directive, provided that the derogation would not be detrimental to competition, effective market functioning or the security of supply in the Union.
Pipelines to and from third countries would thus be subject to at least two different regulatory frameworks. Where this results in legally complex situations, the appropriate instrument for ensuring a coherent regulatory framework for the entire pipeline will often be an international agreement with the third country or third countries concerned. In the absence of such an agreement, an exemption for new infrastructure or derogation for infrastructure already in operation, the pipeline may only be operated in line with the requirements of Directive 2009/73/EC within the borders of EU jurisdiction.
• Consistency with existing policy provisions in the policy area
The proposal renders the rules currently applicable to EU-internal pipelines also applicable to pipelines to and from third countries. As such, it is consistent with existing provisions in the policy area. Additional clarifications are included where necessary to take account of the specific requirements in relation to third countries.
• Consistency with other Union policies
The proposal seeks to implement key objectives of the Energy Union, as defined in the Framework Strategy for a resilient Energy Union with a forward-looking climate change policy, especially in the dimension of energy security (whereas one of the key drivers of energy security is the completion of the internal energy market).
2. LEGAL BASIS, SUBSIDIARITY AND PROPORTIONALITY
• Legal basis
The legal basis for the proposed measure is Article 194 of the Treaty on the Functioning of the European Union (TFEU), which consolidated and clarified the competences of the EU in the field of energy. According to Article 194 TFEU, the main aims of the EU’s energy policy are to: ensure the functioning of the energy market; ensure security of energy supply in the Union; promote energy efficiency and energy savings and the development of new and renewable forms of energy; and promote the interconnection of energy networks.
The present proposal also builds upon a comprehensive set of legislative acts that have been adopted and updated during the past two decades. With the objective of creating an internal energy market, the EU has adopted three consecutive legislative packages between 1996 and 2009, with the overarching aim of integrating markets and liberalising national gas and electricity markets. In this connection, the present proposal would ensure that there is no discrimination between the operators of gas pipelines to and from the EU and other market participants to whom the Gas Directive fully applies, for instance operators of gas pipelines connecting different Member States or operators of transmission systems within Member States.
The current proposal should also be seen as part of an ongoing effort to ensure the integration and effective operation of Europe’s gas markets.
• Subsidiarity (for non-exclusive competence)
The proposed changes to the Gas Directive are necessary to achieve the purpose of an integrated EU gas market and cannot be reached at national level, on the basis of fragmented national rules, in an equally efficient manner. Evidence has shown that isolated national approaches have led to delays in the implementation of the internal energy market rules, leading to sub-optimal and incompatible regulatory measures, unnecessary duplication of interventions and delays in correcting market inefficiencies 2 . Furthermore, pipelines to and from third countries are in most cases of a capacity which is capable of impacting the internal gas market and security of supply in several Member States.
•Proportionality
The proposed amendment is strictly oriented on what is indispensable to achieve the necessary progress for the internal market, while leaving appropriate competences and responsibilities for Member States, national regulators and national actors. It includes the possibility for derogations for existing infrastructure (i.e. pipelines to and from third countries which are completed before the entry into force of this Directive), to take account of complex legal structures already in place which may require a case-specific approach, provided that the derogation would not be detrimental to competition, effective market functioning or the security of supply in the Union.
• Choice of the instrument
The proposal amends the Gas Directive, a key element of the Third Energy Package. The choice of an amending Act reflects the limited character of the current proposal.
3. RESULTS OF EX-POST EVALUATIONS, STAKEHOLDER CONSULTATIONS AND IMPACT ASSESSMENTS
• Ex-post evaluations/fitness checks of existing legislation
The content of the current proposal is limited to providing clarification in an area where applicable EU law (or the lack thereof) and applied practice diverge. The proposal builds on established practice. To take account of nevertheless existing situations created as a result of lack of explicit rules under the current framework, Member States are enabled to provide for derogations for existing operating infrastructure. In view of the above, it is considered that the amendment of the Gas Directive can be carried out without a separate evaluation process.
• Impact assessment
The present initiative does not require a detailed impact assessment as the changes proposed reflect the practice of applying core principles of the regulatory framework set out in the Gas Directive in relation to third countries. This is particularly evidenced by the fact that these principles are reflected in several international agreements between Member States and third countries or the EU and third countries and that they are consistently applied to onshore pipelines to and from third countries.
• Regulatory fitness and simplification
The proposal may increase administrative requirements, however only to a very limited extent. As through the amendments the Gas Directive will, within the EU's jurisdiction, be applicable in its entirety to pipelines to and from third countries, it will also enable new pipelines to and from third countries to apply for an exemption for new infrastructure pursuant to Article 36 Gas Directive. Therefore, the number of exemption requests might increase which implies requirements for engagement at administrative level on the part of national regulatory authorities and the Commission in taking additional exemption decisions. However, this is not a new burden, but is already a core task defined in the Third Energy Package (Article 36 Gas Directive).
4. BUDGETARY IMPLICATIONS
No budgetary implications are expected from the proposed amendments of the Gas Directive.
5. OTHER ELEMENTS
• Implementation plans and monitoring, evaluation and reporting arrangements
The Commission will monitor the transposition and compliance of the Member States and other actors with the measure that shall be ultimately adopted, and shall take enforcement measures if and when required. Existing national regulatory authorities and other competent national authorities will ensure implementation of the proposal at a national level.
• Detailed explanation of the specific provisions of the proposal
The current proposal specifies the exact scope of application of the Gas Directive and consequently the Gas Regulation 3 to pipelines to and from third countries up to the border of EU jurisdiction. This includes the respective provisions on third-party access, tariff regulation, ownership unbundling and transparency. It will enable new pipelines to and from third countries to apply for an exemption pursuant to Article 36 Gas Directive. It also includes the possibility for Member States to grant derogations for existing import infrastructure already in operation. In order to ensure a coherent legal framework for pipelines passing through more than one Member State, it is necessary to establish which Member State should decide on such a derogation.