Recently, top EU leaders announced the establishment of the Energy Union. This should be the creation of an integrated energy policy for the entire European Union, which is currently lost somewhere between environmental policy, competition, industry and climate change. Before us is a period when a number of important decisions will be taken in the field of energy. The Informal Energy Council scheduled for next week will also see Ministers of the Member States discuss this new initiative. Therefore, I suggest to look at some key information and basic concepts to shed some light on the matter.
Energy policy is one of the first areas of cooperation between the countries of the European Community from as early on as 1952, when the European Coal and Steel Community was established as a kind of an embryo today European Union. Five years later, the Treaty establishing the European Community for Atomic Energy came into force. Over time, other common policies grew in importance and overshadowed in a way the energy policy, which in a shy way disappeared from the treaties. However, in recent times, energy policy again became one of more important topics, in particular when connected with the environment policy. I have already written about the European environment and climate change policies and it is clear that Europeans tend to see energy and environment as inevitably related, where altering of one influences the other and vice versa. Article 4 of the Lisbon Treaty now provides that energy policy is the subject to shared competence between the Member States and the Union. This means that decisions are taken by the Member States, in cooperation with the European Parliament. As always, legislative proposals are prepared by the European Commission.
In principle, energy is otherwise one of those policies and sectors that the Member States wish to keep under their control. It was not uncommon that Members of the European Parliament were quite a bit frustrated when faced with limited decision-making powers in the field of energy, where they wished to progress faster than their national counterparts. However, this year’s cooling in EU-Russia relations gave a little boost to the development of a more integrated energy policy. At the beginning of last month, the Heads of States and Governments of the Member States, meeting as European Council, adopted a decision to reduce EU’s dependence on Russian gas. This would be done through the creation of an Energy Union. Their Conclusions state that the EU Member States will work towards accelerating implementation of infrastructure projects in the field of electricity and gas, including to peripheral regions, with a view to ensuring energy security and well-functioning internal energy market.
However, European policy makers will not have to work “from scratch”. In recent years, strategies have been adopted for the energy policy up to years 2020, 2030 and 2050. An Energy Security Strategy has also been adopted. The current energy policy of the European Union is based on three pillars: security of energy supply (to ensure continuous supply whenever necessary), healthy and undistorted competition in the energy market (to ensure competitive prices for consumers, business and industry) and sustainable consumption (to reduce greenhouse gas emissions, pollution and dependence on fossil fuels).
Key challenges of the European Union in the energy sector are its dependence on energy imports (the EU Member States import on average around almost half of the energy they consume and pay for it about € 350 billion a year), continuous growth in energy demand worldwide (mainly in developing countries) and slow decrease in certain fuel reserves.
In the coming years, therefore we can expect a series of legislative proposals and important decisions in the field of common energy policy, electricity and gas markets, transparency and competition in the energy market and requirement that Member States’ agreements with third countries are in line with EU law. However, in spite of current enthusiasm and accelerated cooperation, we could expect that Member States will continue to defend their autonomy in determining the national energy mixes, researching and exploitating energy resources (eg. shale gas, nuclear energy) and additional support to certain energy sources (e.g. renewable energy sources, fossil fuels).
More information on the Energy Union is available here.
More information about the energy policy of the European Union is available here.