Brussels Energy Brief - May 2008
May 2008
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KEY DEVELOPMENTS
Commission Outlines European Response to Mitigate Effects of Rising Global Food Prices
Patricia Armesto
On 20 May 2008 the European Commission adopted a Communication setting out potential policy responses to mitigate the effects of rising global food prices. The Communication examines the reasons behind the recent surge in food prices, both within the European Union and internationally. Among those reasons, biofuels are alleged to be displacing food production, and the Commission is coming under increasing pressure to reassess its requirement for transport fuel to contain 10 per cent biofuels by 2020. The policy response proposed by the Commission consists of the following measures: (i) in the short term, a “Health Check” of the Common Agricultural Policy; (ii) in the long term, initiatives to enhance agricultural supply and ensure food security, including the promotion of sustainable criteria for biofuels; and (iii) initiatives to contribute to the global effort to tackle the effects of price rises on poor populations, including a more coordinated international response to the food crisis, in particular by the United Nations and G8.
Environment: Summit on EU-Japan Cooperation Addresses Climate Change
Jonathan Aitken
On 23 April 2008 the 17th annual EU-Japan summit was held in Tokyo. The summit leaders reaffirmed their willingness for Japan and the European Union to continue addressing climate change, achieving the United Nations’ Millennium Development Goals and maintaining international peace and security. Both sides considered energy efficiency improvement to be the most cost effective way of addressing climate change in the short term and committed to enhance international cooperation in this field. Japan and the European Union also emphasised the need for strengthening energy security and increased use of sustainable energy options such as renewable energy sources, enhanced oil recovery, clean coal and carbon capture and storage.
Internal Market: Commission Takes Steps Against Spain Regarding Excise Duty on Mineral Oils
Juan Gutiérrez
The European Commission has formally notified Spain that the excise duty in the form of a tax on motor fuels sold at petrol stations (the IVMDH) does not comply with Community Law. Excise duties on mineral oils are harmonised at EU level but Member States are allowed to impose additional indirect taxes for specific purposes and under certain defined conditions, as set out in Directive 92/12/EEC. However, the Commission has taken the view that Spain’s IVMDH does not fully comply with the requirements of the Directive. The Commission may refer Spain to the European Court of Justice if it does not bring its national legislation into line with Community Law.
Mergers: Commission Opens In-Depth Investigation into Statoil’s Acquisition of Jet Petrol Stations in Scandinavia
Daniel Kelly
The European Commission has opened a second phase in-depth investigation into Statoil Hydro’s proposed acquisition of American owned Jet petrol stations in Scandinavia. The Commission has raised serious doubts as to the compatibility of the merger with the Single Market, particularly in the current climate of rising oil prices. In Sweden and Norway, it is thought that Jet’s exertion of competitive pressure on Statoil may lead to a significant impact on Statoil’s retail prices. While Norway is not part of the European Union, the completion of the entire transaction is subject to approval under the European Economic Area (EEA) agreement, which gives jurisdiction to the Commission to review the case. The Commission now has until 18 September 2008 to take a final decision on whether the proposed transaction would significantly impede effective competition in the EEA, or a substantial part of it.
Mutual Cooperation: EU and Turkmenistan Strengthen Energy Cooperation
Geert Dierickx
Energy Commissioner Andris Piebalgs and Gurbankuly Berdymuhammedov, the President of Turkmenistan, have signed a Memorandum of Understanding formalising bilateral cooperation between the European Union and Turkmenistan in the areas of investment, production, energy technology, energy efficiency, renewables and the transport and trade of energy products. Turkmenistan can be an attractive destination for EU investments developing new gas and oil fields. At the same time, the European Union can offer a significant consumer market for Turkmen energy products. In addition to energy, the European Union is cooperating with Turkmenistan in areas such as education, environment and economic development.
Cars: “Save More than Fuel” Energy Efficiency Campaign
Bróna Heenan
The European Commission, together with Europia, one of the partners of the Sustainable Energy Europe Campaign, have launched an advertising campaign to promote energy efficient driving habits among car users. The campaign gives simple tips to reduce CO2 emissions and save money by driving more intelligently. Millions of consumer leaflets will be distributed via filling stations in 29 European countries and a short video will be posted on EU Tube. This campaign falls within the framework of the Intelligent Energy – Europe (2003—2006) programme. The programme aims to raise public awareness and promote sustainable energy production and use among individuals and organisations, private companies and public authorities, professional and energy agencies, industry associations and non-governmental organisations across Europe.
Improving the Safety, Energy and Environmental Performance of Vehicles
Mélanie Bruneau
The European Commission has proposed the introduction of a broad array of new safety requirements for motor vehicles, including the reduction of fuel consumption and CO2 emissions through the following requirements for tyres by 2012: (i) Low Rolling Resistance Tyres (LRRT); and (ii) Tyre Pressure Monitoring Systems (TPMS). The Commission’s proposal will replace 150 Directives with one single Regulation directly applicable in the European Union and referring to harmonised United Nations standards for motor vehicles.
EU Stresses Importance of Consumers in the Energy Market
Daniel Kelly
Consumer Commissioner Meglena Kuneva, speaking at the Slovenian Presidency Competition and Consumer day on 22 May 2008, stressed the key role that informed and empowered consumers have to play in the functioning of the Internal Market. According to Commissioner Kuneva, consumer ability and confidence to make the right choices will reward the best suppliers and improve markets overall. The Commissioner also highlighted the importance of reinforcing and implementing the rights of EU energy consumers. The new Consumer Markets Scoreboard, which allows the Commission to asses how retail energy markets are delivering to consumers, and the Third Energy Legislative Package, which ensures national regulators monitor prices, rates and complaints, both contribute to the safeguarding of those rights. Commissioner Kuneva and Energy Commissioner Andris Piebalgs have recently launched the Citizen’s Energy Forum and, in Commissioner Kuneva’s speech, she reiterated her call for the involvement of all active energy stakeholders in the Forum.
President Barroso Addresses European Nuclear Energy Forum
Andrea Hamilton
On 22 May 2008, European Commission President José Manuel Barroso addressed the European Nuclear Energy Forum (ENEF). ENEF, which was formed in 2007, facilitates discussions about nuclear energy among key stakeholders, including public authorities, Members of the European Parliament, industry representatives and consumers. In his address, President Barroso explained that the need for open debate about nuclear energy in Europe remains critical, as demand for nuclear energy is increasing and now generates a significant portion of Europe’s electricity. He observed that the general framework for developing nuclear energy in Europe was settled in the Euratom Treaty—ratified 50 years ago—and suggested that a more advanced framework could now be established in Europe. Further, President Barroso cited the Joint Statement of 8 May 2008 made with Dr. ElBaradei of the International Atomic Energy Agency (IAEA) that envisages closer communication between the European Union’s Euratom Supply Agency and the IAEA. President Barroso closed by highlighting certain advantages of nuclear energy, namely: (i) the reduction of carbon emissions through the use of nuclear energy; and (ii) the potential for increased security of EU energy supply.
Competition: Commission Opens Formal Proceedings Against Gaz de France Concerning Suspected Gas Supply Restrictions
Juan Gutiérrez
The European Commission has opened antitrust proceedings against the French gas company Gaz de France for a suspected breach of the EC Treaty's rules on abuse of dominant position and restrictive business practices. The initiation of proceedings originates from information obtained during inspections carried out in 2006. The potential infringement consists of behaviour that might prevent or reduce competition on downstream supply markets for natural gas in France, through, in particular, a combination of long-term reservation of transport capacity and a network of import agreements, as well as through underinvestment in import infrastructure capacity. The suspected practices are allegedly being carried out by Gaz de France SA, its subsidiaries and the companies under its control. There is no strict deadline to complete inquiries into anticompetitive conduct. Their duration depends on a number of factors including the complexity of each case, the extent to which the undertakings concerned cooperate with the Commission and the exercise of the rights of defence.
Environment: Commission Priorities for 2009 Focus on Climate Change
Benoît Keane
In a speech to the European Parliament on 19 May 2008, the Commissioner for the Environment set out the objectives for the European Commission’s environmental policy in 2009. He placed the European Union’s preparation for the Copenhagen Conference on Climate Change at the top of the European Union’s priorities. The Commissioner also urged the European Parliament not to delay the implementation process of the Commission’s Climate Change Package which includes measures on reducing greenhouse gas emissions, emissions trading, biofuels and other renewable energies. He warned that if the measures are not adopted before the parliamentary elections in 2009 then the whole legislative process will have to start again once the new European Parliament is in place. The Commissioner also indicated that the Commission would bring out proposals to tackle maritime and road transport emissions and to implement legislation to halt the destruction of biodiversity.
MERGER NOTIFICATIONS
End April – May 2008
M.4994 - ELECTRABEL / COMPAGNIE NATIONALE DU RHONE (30 April 2008)
M.5171 - ENEL / ACCIONA / ENDESA (13 May 2008)
M.5170 - E.ON / ENDESA EUROPA / VIESGO (19 May 2008)
MEETINGS
June 2008
Transport, Telecommunications and Energy Council – Energy (6 June 2008)
EU – OPEC Energy Dialogue (23 – 24 June 2008)
Permanent High-Level Group – Energy Community (26 June 2008)
Ministerial Energy Community (27 June 2008)
