Third-party Gaslines to Fall under EU Rules: Council of EU (Update)

(Adds comment from Eurogas in paragraph 4)

The rules governing the EU's internal gas market will in future also apply to gas pipelines to and from third countries, the Council of the European Union said February 13. The existing gas directive could not legally be made to apply to them, the European Commission (EC) was advised some years ago and so an amendment was needed.

Following the 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, the EC said. Once endorsed by both co-legislators in the coming months, the new law will be published and have to be transposed into national law within nine months.

The original amendment before its final revision found little support from industry, with European lobby group Eurogas, consultancy AD Little as well as Nord Stream 2 AG all finding flaws and inconsistencies with existing regulations, and said it gave the EC new powers that formerly belonged to member states. The amendment does not name individual pipelines but its specific application to NS 2 was taken as a given.

Eurogas said February 13 that given the agreement of the member states on the compromise text, it was "pleased that after long negotiations, all legislators supported this as a practical outcome to extremely complex discussions. Clarity is needed on the application of laws in the case of potential conflict between member state and the European Union laws, so as to provide investor certainty for all infrastructure projects covered by the amended Directive. It is also important that existing investment decisions are also not negatively impacted by the new amendment and that the principles of the Energy Charter Treaty are upheld."

Romania's energy minister Anton Anton said he was "very pleased that we have reached an agreement so quickly. It fills a gap in the EU's legislative framework in the energy field and will ensure that the rules of the Energy Union are applied consistently across the EU."

Romania itself has come under criticism from the European Federation of Energy Traders and from gas producers, with respect to its domestic gas production and energy taxation rules. In recent months these have changed adversely for investors and without prior stakeholder consultation.

The provisional agreement with the parliament was reached only two working days after the Committee of Permanent Representatives gave a mandate to the presidency of the council to start the negotiations.

The amendment to the gas directive was proposed by the European Commission in November 2017. The European parliament adopted its position on the file in April 2018 and the council on 8 February 2019. The February 13 provisional agreement is subject to endorsement from both institutions before it can become law.

Commenting on the council's announcement, the EC said the provisions of the directive should be applied on EU territory (land and sea) and the amendment provides for effective oversight to ensure the application of EU internal market rules by the national authorities supervised by the EC. It also enhances transparency and co-operation among competent national authorities.