Climate Policy Energy 8 September, 2021 2:30 pm   
COMMENTS: Jerzy Buzek

Buzek: the fate of almost half of the EU hinges on the security of gas supplies through Ukraine (INTERVIEW)


“Nearly half of the EU depends to some extent on secure supplies to Ukraine – from Poland, Czechia and Slovakia, through Germany, Luxembourg and Austria to Croatia, Greece and Italy. There’s no way to downplay that!” says professor Jerzy Buzek, former Prime Minister and current member of the European Parliament. Is European integration the answer to threats like Nord Stream 2?

Jerzy Buzek: Yes, absolutely, which is why it is the Polish raison d’etat to participate in the European integration fully, actively and constructively. Sometimes people ask “why do we need the European Union, if we are in it, and Nord Stream 2 is being built against our will anyway?”. The truth is, however, that without the EU, this pipeline would, unfortunately, have been built anyway, probably even faster. Also without the Union, we would not have been able to blunt the geopolitical edge of this project, aimed from Putin’s Russia at the security – including energy – of ourselves and our neighbours, and at European solidarity and cooperation. But that’s exactly what we managed to do.

What specific steps taken at the EU level do you think have made Nord Stream 2 less dangerous today?

I think about the great work that we have been doing consistently in the Union for many years: first in the framework of the European energy community – which I proposed with Jacques Delors – and then in the framework of the energy union. Firstly, there is huge financial support for member states to invest in improving their energy security and diversifying gas supply sources and routes – cross-border interconnectors with the so-called reverse flow, LNG terminals or new pipelines like our Baltic Pipe from Norway. And secondly – regulatory measures, such as two regulations on the security of gas supply, the LNG development strategy or the gas directive, with which all new non-EU gas pipelines, including Nord Stream 2, will have to comply.

Nord Stream 2 tried to bypass this directive. However, this complaint was rejected as unfounded by the Court of Justice of the European Union, and the German regulator decided there were no grounds for excluding this investment from EU law. So, Nord Stream 2 appealed to a court in Germany and lost the case less than two weeks ago. What does this sentence mean?

What I have always said as rapporteur and chief negotiator for the gas directive on behalf of the European Parliament – Nord Stream 2, like any new gas pipeline on the territory of the EU, will have to comply with our rules – above all, with the Third Energy Package. And these regulations are straightforward: you can not be a supplier of gas and at the same time the owner of the pipeline through which this raw material is transported. Also, other companies should have guaranteed access to the infrastructure. Gazprom is unable or unwilling to meet both of these requirements. As a result, it will be able to use only half of the capacity of Nord Stream 2, which in turn will possibly encourage it to maintain gas transmission through Ukraine, also after 2024, when the current transit contract expires. Actually this is good news for our eastern neighbor. Since the beginning there have been reasonable concerns that it would suffer the most due to Nord Stream 2.

What will be the outcome of combining Poland’s and Ukraine’s gas and energy markets in the EU?

I believe this might a win-win situation, where both parties have reasons to be satisfied. In general, a bigger market usually means more competition, more choice, more fierce price competition – and this would probably benefit businesses and citizens both in Ukraine, in Poland, and throughout the Union.

I also think that consumers in Ukraine, both individual and industrial, would appreciate the better transparency of rules and stability and predictability of the law ensured by the common EU energy market. The combination of energy systems would make it easier for us to exploit the potential of Ukrainian underground gas storage facilities – their record capacity puts Ukraine in first place in Europe and third in the world! Market integration could also accelerate the development of imports into the Union of Ukrainian green hydrogen, a fuel that is so important in our energy transition.

How can EU regulations affect the security of Ukraine, for example, the regulation on security of supply (SOS), or on intergovernmental agreements (IGA)?

They already have an impact, because Ukraine has been part of the Energy Community for years. The Community was established in 2005 to extend the rules of the internal energy market of the European Union primarily to the countries of south-eastern Europe. As part of the membership, Ukrainians are obliged to adapt their market to EU standards and regulations, especially the already mentioned Third Energy Package. It is worth emphasizing they are doing it, even if sometimes not without some problems or delays.

As for the new regulation on the security of gas supply, the so-called SoS, it has a separate article setting out the principles of cooperation between the Union and the countries of the Energy Community in the area of anticipating, preventing and combating supply crises. I was very keen on that as rapporteur for this regulation.

Should Ukraine be included in the security of supply group with Poland and Germany?

In the SoS regulation Ukraine is identified, due to the fact that Russian gas is transmitted across its territory, as a country of strategic importance for as many as 13 EU states. In other words, close to half of the EU depends to some extent on secure supplies to Ukraine – from Poland, Czechia and Slovakia, through Germany, Luxembourg and Austria to Croatia, Greece and Italy. There’s no way to downplay that!

In addition, the Union has energy policy obligations to Ukraine, which result from the association agreement signed between the two parties. According to the document, the EU must coordinate and consult with Ukraine the development of energy infrastructure, and both signatories need to act in the spirit of solidarity and cooperate on issues related to gas trade and security of supply. It was these provisions that the Ukrainian government invoked at the end of July, demanding that the EU comply with them in the context of Nord Stream 2 and hold urgent consultations with the European Commission and the German government.

Why is Germany, and not the European Commission, negotiating the new agreement on gas supplies through Ukraine, and what is the role of the US?

The German Chancellor Angela Merkel who will be leaving her office in a few weeks, actually declared that she would ensure that the contract for gas transit through Ukraine was extended for at least another 10 years. The current deal, negotiated with the help of the European Commission in 2019, will expire at the end of 2024. However, as I said earlier, if the capacity of Nord Stream 2 is halved under the EU law, Gazprom itself should be keenly interested in continuing this agreement with the Ukrainians.

Interview by Wojciech Jakóbik