Proposal for a Directive of the European Parliament and of the Council amending Directive 2009/73/EC concerning common rules for the internal market in natural gas - Legal basis, allocation of competences, derogations - Hoofdinhoud

Council of the European Union Brussels, 26 March 2018

PUBLIC

(OR. en)

7502/18 Interinstitutional File:

2017/0294 (COD) i LIMITE

JUR 152 ENER 109 CODEC 442

OPINION OF THE LEGAL SERVICE 1

From: Legal Service

To: Energy Working Party

Subject: Proposal for a Directive of the European Parliament and of the

Council amending Directive 2009/73/EC i concerning common rules for the internal market in natural gas - Legal basis, allocation of competences, derogations

DOCUMENT PARTIALLY ACCESSIBLE TO THE PUBLIC (24.4.2018)

• I. 

  INTRODUCTION

On 13 November 2017, the Commission presented a proposal for a Directive of the European

Parliament and of the Council amending Directive 2009/73/EC i concerning common rules for the internal market in natural gas. 2

1 This document contains legal advice protected under Article 4(2) of Regulation (EC) No

1049/2001 of the European Parliament and of the Council of 30 May 2001 regarding public access to European Parliament, Council and Commission documents, and not released by the Council of the European Union to the public. The Council reserves all its rights in law as regards any unauthorised publication.

2 COM(2017) 660 final i, doc.14204/17.

At the meeting of the Working Party on Energy on 11 January 2018, the Presidency asked the

Council Legal Service to put in writing its opinion on whether the application of the proposal to the exclusive economic zone of the Member States is compatible with the UN Convention on the Law of the Sea 3 and on the impact of its adoption on the allocation of competences between the Union and its Member States. This opinion answers the second question of that request. This assessment will also include an examination of the proposal, of the legal basis and of the derogations, which was requested by a number of delegations.

II. EXAMINATION OF THE PROPOSAL

• 1. 

  Pursuant to recitals 1 and 3, the aim of the proposal is to address the remaining obstacles to the completion of the internal market in natural gas resulting from the non-application of

  Union market rules to gas pipelines to and from third countries and to contribute to security of

  supply and sustainability.

• 2. 

  In terms of content, the proposal extends the application of internal market rules on gas to pipelines to and from third countries, and provides for derogations for existing pipelines and exemptions for future pipelines.

• 3. 

  According to the Explanatory Memorandum accompanying the proposal, “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.” 4

3 That opinion is in doc. 6738/18.

4 Explanatory memorandum, COM(2017) 660 final i, doc.14204/17, page 2, third paragraph.

• 4. 

  To this end, the proposal alters the definition of "interconnector" in Article 2(17) of Directive 2009/73/EC i 5 ("Gas Directive") to mean "a transmission line which crosses or spans a border between Member States or between Member States and third countries up to the border of

  Union jurisdiction." This has the consequence that the rules of the Gas Directive on unbundling, transparency, third party access and regulated tariffs, currently applicable within the internal market, will be applicable to pipelines to and from third countries, up to the border of Union jurisdiction. In particular:

  • a. 

    the transmission system operator of the pipeline has to undergo ownership unbundling pursuant Article 9, which requires that a network ownership be separated from production and transport of gas, and be certified by the national energy regulator of the Member State(s) where it is active;

  • b. 

    the pipeline has to offer non-discriminatory third party access to all interested parties (Article 32);

  • c. 

    network tariffs for having access to a pipeline to and from third countries have to be set in a non-discriminatory, transparent and cost-reflective way 6 and approved by the competent national regulatory authority or authorities of the relevant Member States in cooperation with the relevant authorities of third countries (Article 41(1) and (6));

  • d. 

    transparency requirements on the availability of network capacities, actual use and outages become applicable (Article 16(3)).

5 Directive 2009/73/EC i of 13 July 2009 concerning common rules for the internal market in natural gas and repealing Directive 2003/55/EC i, OJ L 211, 14.8.2009, p. 94.

6 Article 13 of Regulation (EC) No 715/2009 i of 13 July 2009 on conditions for access to the natural gas transmission networks and repealing Regulation (EC) No 1775/2005 i, OJ L 211, 14.8.2009, p. 36.

• 5. 

  The Gas Directive can only apply to the part of a pipeline that lies within the territory of the Member States and not to the part of the pipeline under the jurisdiction of a third country.

  Beyond the limits of the Union jurisdiction, as referred to in the proposed new Article 2(17), the rules on energy which are set out in Union law will be applicable only if the third countries are willing to adopt those Union rules, unilaterally or by agreement, such as in the case of the Energy Community Treaty 7 or the EEA Agreement. 8 The result is that the legislation of two or more jurisdictions may potentially be applicable to the same pipeline. To address this issue, the proposal envisages the possibility for Member States to derogate from the rules of the Gas Directive in respect of existing pipelines, as well as the possibility for exemptions for new pipelines. 9 The proposal does not expressly deal with cases where it could be necessary to determine a mutually agreed legal framework with third countries, but the Commission Staff Working Document indicates that "[r]esolving contradicting requirements and ensuring legal certainty could be achieved by concluding an intergovernmental agreement establishing a specific regulatory framework for the operation of such pipeline." 10

7 See the Decision of the Ministerial Council of the Energy Community D/2011/02/MC-EnC: Decision on the implementation of Directive 2009/72/EC i, Directive 2009/73/EC i, Regulation (EC) No 714/2009 i and Regulation (EC) No 715/2009 i and amending Articles 11 and 59 of the Energy Community Treaty (9th MC/06/10/2011-Annex 11/05.10.2011).

8 See Decision of the EEA Joint Committee No 93/2017 of 5 May 2017 amending Annex IV (Energy) to the EEA Agreement.

9 Accordingly, the Explanatory memorandum indicates that "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 i within the borders of EU jurisdiction." COM(2017) 660 final i, doc.14204/17, page 2, last paragraph.

10 SWD(2017) 368 final, doc. 14204/17 ADD1, p. 6, fourth paragraph, second sentence.

DELETED FROM THIS POINT UNTIL THE END OF THE DOCUMENT (page 13)

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