Improved transparency on international energy contracts: stronger energy security

Council of the EU
  • 21/03/2017
  • 10:30
  • Press release
  • 143/17
  • Energy
21/03/2017
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The Council adopted today without debate a decision on establishing an information exchange mechanism with regard to intergovernmental agreements and non-binding instruments between member states and third countries in the field of energy

The aim of the decision is to correct shortcomings in the existing information exchange mechanism on energy contracts in order to enhance the transparency and consistency of the EU's external energy relations and to strengthen the EU's negotiation position vis-à-vis third countries. 

Following three trilogues at the end of 2016, a compromise was found on the following key issues: 

  • the definition of intergovernmental agreement: addition of "international organisations" and "transit"
  • the scope of the ex ante assessment of IGA's by the Commission: it will cover gas and oil with a standard review clause
  • when departing from the Commission's opinion in its ex ante assessment Member States should explain their reasons to the Commission in writing
  • non-binding instruments: subject to voluntary ex post notification

 After being signed by the President of the European Parliament and the President of the Council, the legislative act will be published in the Official Journal of the European Union. 

It will enter into force in the course of 2017 and, together with the regulation on the security of gas supply, it will play a major role in the implementation of the security dimension of the  Energy Union Strategy.

"We are very pleased to adopt this important legislative act during our Presidency, the first one under the Energy Union. We want to thank the Slovak Presidency for all their preparatory work and the political agreement they achieved with the European Parliament during their Presidency. This decision will strengthen transparency in negotiations with third countries on energy agreements, ensuring that  such agreements are fully compatible with Union law, thus contributing to energy security."

 Konrad Mizzi , Minister for Energy of Malta

Background 

As part of its "Winter Package" of February 2016, the Commission proposed that it examine international agreements in the field of energy before they are signed by member states. It argued that if certain provisions of an intergovernmental agreement ('IGA') are found to be incompatible with Union law (such as the Third Energy Package, competition law, public procurement rules), it is very difficult or even impossible for a member state to renegotiate the IGA with a third country. 

The proposal also responded to the European Council's conclusions of March 2015 which called for full compliance with Union law of all agreements related to the purchase of gas from external suppliers. 

The Council agreed on a general approach in June 2016  and reached an informal agreement with the European Parliament on 7 December 2016, which was confirmed by Coreper.