Oil & Gas

New rules for improving the functioning of the EU gas market

New rules to ensure that pipelines with third countries comply with EU regulation have been provisionally agreed by negotiators from the European Parliament, the Council and the European Commission on February 12.

An integrated gas market is a cornerstone of the EU’s Energy Union and a key priority of the Juncker Commission. Following the announcement by President Juncker in his 2017 State of the European Union speech, the Commission proposed common rules for gas pipelines entering the European gas market, on 8 November 2017. These rules aim at increasing security of supply and builds upon the solidarity dimension of the Energy Union.

The aim of the proposal is to improve the existing Gas Directive (2009/73/EC) and ensure that the principles of EU energy legislation (third-party access, tariff regulation, ownership unbundling and transparency) apply to all gas pipelines to and from third countries. Exceptions are only possible under strict procedures in which the Commission plays a decisive role.

“Today’s agreement meets this aim. It ensures that the provisions of the Gas Directive are applied on EU territory (land and sea) and provides for effective oversight to ensure the application of EU internal market rules by the national authorities supervised by the Commission. It also enhances transparency and cooperation among competent national authorities. This is a major step towards a well-functioning, transparent and competitive EU internal gas market where all suppliers are acting under the same EU rules,” the press release reads.

“This is a major step forward in the creation of a truly integrated internal gas market which is based on solidarity and trust with full involvement of the European Commission. Today, Europe is closing a loophole in the EU legal framework. The new rules ensure that EU law will be applied to pipelines bringing gas to Europe and that everyone interested in selling gas to Europe must respect European energy law. Together with the previously agreed rules on security of gas supply and Intergovernmental Agreements, Europe has given itself a strong set of tools to deal effectively and collectively with our external energy suppliers,” Commissioner for Climate Action and Energy Arias Cañete mentioned.

The new rules will increase competition between gas suppliers and increase energy security throughout the EU. Ensuring that all major gas pipelines to and from third countries are operated efficiently under a regime of transparent regulatory oversight will diminish conflicts of interests between infrastructure operators and gas suppliers, guarantee non-discriminatory tariff setting and provide legal certainty for future investment decisions.

The Romanian Presidency of the Council of the European Union has advanced in a record time with the revision of the Gas Directive, reaching a provisional political agreement with the European Parliament on Tuesday evening (February 12).

The Romanian Presidency of the Council of the EU had a crucial role in these negotiations, which bring guarantees that the rules of the Energy Union will also apply to gas pipelines to and from third states.

“I am glad that the Romanian Presidency has reached such an important agreement, compensating for an EU legislative gap in the energy field and ensuring that the rules regulating the internal gas market in the EU are applied uniformly in the Union,” Anton Anton, Romanian Energy Minister said.

Coordination of this strategic dossier for the European Union was carried out by Prime Minister Viorica Dancila, who pointed out that this agreement is meant to ensure that the rules governing the internal gas market of the EU are applied uniformly in the EU.

This dossier has been in discussions at European level for over a year. The EU Council, under the Romanian Presidency of the Council of the European Union, reached a common position on 8 February 2019.

 

Next Steps

Following this provisional political agreement, the text of the Directive will be prepared in all EU languages and will have to be formally approved by the European Parliament and the Council. Once endorsed by both co-legislators in the coming months, the new law will be published in the Official Journal of the Union. The Directive will have to be transposed into national law within 9 months.

 

Background

The European Union’s dependency on imported natural gas is growing. This trend is likely to continue due to falling domestic gas production while being only partly offset by falling gas demand due to energy efficiency and decarbonisation policies. The share of net gas imports as compared with the EU’s total gas consumption was 74.4% in 2017. The biggest gas importer to the EU is Russia (42%), followed by Norway (34%), Algeria (10%) and imported LNG (14%). Imports have increased over the last two years, driven by higher consumption, lower prices and falling domestic production.

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