The external dimension of EU energy law and policy: a step forward, but towards what?

It is no wonder anymore that the European Union (EU) energy norms have gained extraterritorial dimensions. Thanks to global processes on environment and climate change, ‘EU energy law and policy’ has now developed from a notion used by a small section of European society into a hot topic beyond the EU’s formal bounds. The recent Eurobarometer report reveals that nine in ten Europeans call for the EU to engage actively in foreign energy relations and ensure access to affordable energy. By the same token, the last couple of years have seen a growing interest in the Energy Community as a key legal vehicle to spread EU energy rules and principles across South East Europe. But what does it entail? This is exactly what the blogpost tries to untangle, shedding a light on the EU’s external energy competence and the role of the EnC in promoting green energy transition.

The background

The evolution of energy law scholarship at the European level is guided by a variety of developments, including the EU’s heavy reliance on external energy resources. Rethinking its energy policy, the EU has endeavoured to give its energy law wider extraterritorial effect and to strengthen its energy relations with key stakeholders in the neighbouring regions. Founded in 2005, the Energy Community (EnC) forms a good example of this geographical expansion covering nine Contracting Parties in the South East European region. Characterized by a highly institutionalized set-up, the EnC’s governance structure is much more sophisticated than the formats applied so far by the EU. It aims to project the EU’s external energy power in South East Europe and beyond, starting from its legally binding framework. The overall objective of such unity is to create a harmonized pan-European energy market for integrated and expanded EU internal energy networks. On the other hand, EnC members are prone to systematize their regulatory framework, attract new investments and enhance their security of supply.

Margins of EU external energy policy

The EU external relations do not constitute a stand-alone field of action. It is something that could potentially engage with any policy field of the EU. Although the Union enjoys an institutional capacity to speak in a single voice, this does not apply to the field of energy as a shared competence, where the decisions must be taken in accordance with the subsidiarity and proportionality principles.  Since the founding treaties neither specify nor allocate the external competence in energy it is an open question to what extent the EU can expand the geographical scope of its energy norms.

This blogpost, nevertheless, defends that the Union may act in this case by virtue of the doctrine of ‘implied powers’ developed through the Court of Justice of the European Union (CJEU). According to this concept, whenever the exercise of external powers is necessary to obtain the objectives of the Union, the EU is entitled to develop, inter alia, an external energy policy. This basis is fortified by invoking Articles 216 (1) and 3 (2) TFEU governing the EU’s external competencies to conclude international agreements.

What are the mechanisms?

This mandate is exercised in various ways. Looking into the specific legal tools, the Energy Community Treaty provides the cooperation framework that EU energy partners should import, consisting of the EU acquis on energy and related legislation (i.e. competition, environment etc.). According to Title II of the Treaty, participatory countries are bound to incorporate energy community laws into their domestic legal system. This means that the Parties, on their way to achieve sustainable low-carbon transition, are obliged to increase the share of renewable energy in their final energy mix as required by the 2009/28/EC Renewable Energy Sources (RES) Directive.

However, they are not yet obliged to endorse the EU’s new 2018 renewable energy directive with its extended targets. These targets made up part of the so-called ‘Winter Package’ influenced by the landmark UNFCCC Paris Agreement to limit the dependence on fossil fuel. The shift from the Third to the Clean Energy Package becomes mandatory only in case the EnC Ministerial Council issues a binding decision upon the Contracting Parties. Insofar as, at the time of writing, there is no such a binding decision, Parties should remain loyal to their original commitments.

A critical account

This example indicates an uneven nature of the Community. It namely demonstrates that the EnC is unable to effectively respond the constantly evolving corpus of EU energy law. This is exacerbated by the the low enforcement as the weakest feature of the EnC Treaty. The Community does not provide a supranational surveillance authority that can act where countries do not deliver on their pledges in due course. In practice, EnC enforcement is of a political nature. The Secretariat will thus likely resort to diplomatic channels to encourage Contracting Parties to adopt the Community laws instead of opening infringement proceedings against them.

Thus, such technical flaws should be addressed systematically, among other things by increasing the Secretariat’s capacity to monitor and enforce the Treaty based on stronger investigative and decision-making powers. Furthermore, enabling green energy transition in South East Europe seems to be a problem, as combating climate change is still largely seen by the Parties as an impediment to economic development. Going forward, this should also be taken into account.

In lieu of conclusion

Against this background, it is recommended that the EnC fosters sustainable low-carbon development in the South East European region by advocating an increase of renewable energy & energy efficiency targets and the improvement of environmental conditions. It is only the adequate response to EU energy law evolution and strict implementation monitoring that ensure successful decarbonisation scenarios and significant fossil fuel reduction in the region.

Irakli Samkharadze (LL.M. Rotterdam) is a Regional Network Coordinator (South East Europe) at GIZ Sustainable Urban Development Project -Connective Cities based in Tbilisi, Georgia (irakli.samkharadze@giz.de).

This blogpost was largely based on the paper published in International Journal of Green Economics titled: ‘Externalising the energy law: the domestic impact beyond the current domain of the European Union’. This paper was written in the framework of Irakli’s visiting scholarship at KU Leuven’s Institute for Environmental and Energy Law, part of the Leuven Centre for Public Law.


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