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GAS Nord Stream 2 11 February, 2019 10:00 am   

Pyrrhic victory of the gas directive. Will it cover Nord Stream 2?


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The revision of the gas directive that could entrap Nord Stream 2 has not been rejected by the ambassadors of the European Union and this is a success. However, this does not mean a full victory, because by drilling the directive described in BiznesAlert.pl this act may not cover the contested investment – writes Wojciech Jakóbik, editor-in-chief of BiznesAlert.pl.

Drilling continues

The opponents of Nord Stream 2 have achieved a lot. The proposal to revise the gas directive has been accelerated thanks to the takeover of the Presidency of the Council of the European Union by Romania, which, like Poland and other critics of the project, recognized that it should be subjected to European regulations. The consent of ambassadors gathered in the Permanent Representatives Committee (COREPER) for further work may mean that Member States have agreed that there is a legal loophole which means that projects like Nord Stream 2, but not only it, operate in a vacuum, and therefore EU law it is not extended to the entire territory of the European Union. This is half of success.

The devil, however, is in the details. In the course of the drilling of the gas directive, new provisions have been proposed which may transfer decisions on Nord Stream 2 regulation from the Commission to Germany, on whose bank the disputed gas pipeline is to leave. It is also worth stressing that this is not the end of negotiations. This means that the directive can be changed in a direction that will neutralize it in relation to Nord Stream 2, because Germany will decide on the manner of implementing EU regulations on the project. This suggests information about the compromise between France and Germany regarding the provisions of the directive, which buried hopes for the relief of the French to the Polish side.

– The draft amendment provides for submarine parts of gas pipelines on the territory of the EU to be entirely subject to the provisions of the restrictive EU third energy package. Adopting such regulations would reduce the profitability of Nord Stream 2 – the second gas pipeline, which is to connect Russia with Germany via the Baltic Sea – says the Polish Press Agency. This does not mean, however, that the law will be enforced by the European Commission, but may result from an agreement with the participation of Germans. It also does not exclude the exclusion of the project from the regulation.

Now the act will go to the European Parliament, and there is not much time left. Before the elections, the Chamber will be closed after the last session scheduled for April 18. Even effective regulation will not cover Nord Stream 2 if it is adopted after its completion. The very term “existing gas pipeline” will be the subject of negotiations, because it can be considered the built mains, or the one that has already started delivery and there is room for interpretation. Meanwhile, Nord Stream 2 may record a delay that will move the gas directive forward.

Talks on the gas directive will also be of key importance for the negotiations of the EC-Ukraine-Russia (the so-called trialogue process) about the future of supplies through Ukrainian territory. If the directive imposes a supply limit by Nord Stream 2 in defense of volumes transported via Ukraine, the profitability of the project may significantly decrease because it depends on the gas pipeline’s use. The talks are to start again in May, after the presidential election over the Dnieper.

Hitting the Community

The dispute over the gas directive does not end. Until recently, the new regulation was put up with a cross, but thanks to the combined initiative of Member States fearing Nord Stream 2, it passed through the COREPER fire. The European Parliament is a critical force against Nord Stream 2, which showed the last position critical of this investment. This does not mean, however, the victory of supporters of the search. The rigging of the gas directive continues but does not mean the final success of the defensive gas pipeline from Russia. The solution acquired by the two strongest EU countries – France and Germany – against the majority opting for another option would be an abuse that would undermine the already undermined trust in the European institutions, and hardly anyone will remember that the European Commission itself proposed a revision of the directive.