Commission not to stop Nord Stream 2 if pipeline complies with EU law

Despite calls from the European Parliament to stop the Nord Stream-2 gas pipeline from Russia to Germany, the project is subject to national law so the European Commission cannot stop construction of the pipeline as long as Gas Directive complies, DG Energy Director General Ditte Juul Jorgensen said. She added, however, that the Russian-backed project is not supported by the European Union.

“Nord Stream-2 is not a project of common European interest. It does not contribute to achieving the targets we have set ourselves. This is a consideration under energy policy and the Commission has been clear in stating that,” Jorgensen told the members of the EU Parliament’s ITRE Committee during an exchange of views on February 23.

Regarding the legal framework, she underlined that the Commission objective has always been to make sure that should Nord Stream 2 come into operation, then it must operate in a manner that is transparent and non-discriminatory and it must have an appropriate degree of regulatory oversight and it must in line with the principles of both international rules and European energy law.

“In terms of the action regarding energy law it is been implemented enforced by the Commission, the European Union, and by member states through their national legislation, including the transposed Gas Directive in this case,” Jorgensen said. She noted that since the Gas Directive entered into force in 2019, the Commission has had very clear rules in place in terms of the application of EU rules to all pipelines that link the EU or the European gas market to third countries via these gas pipelines. “The objective of the Gas Directive is to make sure that the market functions. We make sure that we avoid preferential action for some and make sure there is equal treatment,” she said.

Ensuring compliance to EU energy law

“Exactly a year ago tomorrow there was a legal deadline for member states to transpose the Gas Directive into national law,” the Commission’s DG Energy Director General said.

She noted that Germany has transposed the Gas Directive into its national legal system and that is, of course, highly relevant for Nord Stream 2 because it is the German national regulator that will apply the German law in accessing Nord Stream 2 when it comes into operation under that legal framework which is the Gas Directive in its transposition into German law.

“In this case it means that the German regulator, the Bundesnetzagentur, will be accessing a number of the key requirements of the Gas Directive and accessing if Nord Stream 2 lives up to these requirements. In particular the transmission system operator must be certified in being compliant with the unbundling requirements, so unbundling certification,” Jorgensen explained.

“The national regulatory authority has four months to take this decision. The Commission has the opportunity to issue an opinion and the national regulatory authority has two months to finalize a decision and must take utmost account of the Commission position. So again, you have a national decision but a clear European role and a clear obligation both for the national authority but also the transmission operators,” she said. “The Bundesnetzagentur, the national regulator, has to take a number of other decisions as well under the transposed Gas Directive, it has to look at the security of supply, whether security of supply is at risk in relation to the project in question and again here the Commission has the possibility to issue an opinion and may do that in this point in time,” Jorgensen explained.

The third aspect where there will be a decision taken again by the national regulatory authority is third party access rules where there needs to be an approval of the relevant points in the transmission system under the gas regulation in this case and this is relevant for the tariff decisions, Jorgensen said. “And for the last two points third party access and tariff decisions there is no possibility for the Commission to give an opinion but, of course, the Commission will look at the national decisions taken to ensure that the national decisions are taken in full accordance with the European legal framework,” she said.

Regarding US sanctions against Nord Stream 2, Jorgensen also said the Commission opposes third-countries sanctions against EU companies that conduct legitimate business within the EU.

Alignments with the EU Green Deal

“Here we are talking about a national decision, but we are also talking about a project that will not meet any European support or any European level investment. Again, it’s not a project of common European interest, it is not supported by the EU budget and will not receive support from the EU budget. The decision to invest here is for the companies in question and the national government in question. So, no support from the European level but as I said no legal tool under energy policy to address this question,” Jorgensen said.

She stressed that gas currently represents an important part of the EU energy mix. In the long run this gas will be replaced by a mix of alternative sources including hydrogen produced from renewable energy or from green sources and power-to-X synthetic fuels produced from renewables. She also clarified there’s no strong link between the H2 strategy and Nord Stream 2 project.

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