EU national governments’ debate on applying internal energy market rules to offshore gas pipelines like Russia’s planned 55 Bcm/year Nord Stream 2 link to Germany is tied up in technicalities, according to an EU source.
EU diplomats acting for the EU Council of Ministers last discussed the European Commission’s proposals in June and then asked national government experts to look further into technical issues, but there have been no formal discussions at diplomatic or expert level since, the EU source said last Friday.
This delve into the details means that the chances of the EU Council and European Parliament reaching an agreement this year on the common text needed for the proposals to become binding seem slim.
If and when they do become binding, the proposals could see Nord Stream 2 having to submit to transparent, non-discriminatory tariff regulation for the EU section of the pipeline.
Austria, which took over the rotating six-month EU presidency on July 1, said in its work program that its energy priorities are reaching agreements with the parliament on the remaining files in the EC’s clean energy package proposals.
These are on power market design, updated rules for governing EU energy regulatory agency ACER, and new rules on electricity sector risk-preparedness.
In contrast it plans simply to “keep up the debate” on the EC’s November proposals to change the EU internal gas market directive to apply to the EU section of all existing and planned gas links with non-EU countries, including in EU territorial waters.
The proposals treat existing and new pipelines differently, with national governments potentially able to exempt existing pipelines from the new rules.
That means if the changes are applied only after Nord Stream 2 comes online — currently planned by end-2019 — it could face different treatment as an existing pipeline than it would as a new one.
The national government experts are looking at whether the proposals go beyond what is needed to achieve EU gas supply security, and whether there are other policy options which are “less onerous,” according to the guidance document for further work published by the council.
They also include questions on whether the proposals should apply to all gas links, or be limited somehow, and how to handle derogations for certain links.
Other issues include whether intergovernmental agreements for pipelines should be automatically necessary. The existing 55 Bcm/year Nord Stream does not have one, and there is none planned for Nord Stream 2.
The parliament adopted its negotiating position on the proposals in March, but the approval process cannot move forward until the council agrees its position, and there is no legal deadline or requirement for it to do so.
Nord Stream 2 is being part-financed by Austrian energy company OMV, along with Germany’s Uniper and Wintershall, France’s Engie and Anglo-Dutch Shell.
The next holders of the EU presidency after Austria are Romania, Finland, Croatia and Germany.