Quo Vadis EU (Law)? - 2022

Fighting Climate Change Between Environmental Ambitions and the Energy Crisis

Facing harsh times caused by, among others, the Russian war which brought about the energy crisis, the European Union, determined to continue with the transition towards a greener Union, has enacted some acts which lay in the broader framework of the EU Green Deal. The roundtable between Prof. Leigh Hancher (University of Tilburg), Dr. Ioanna Hadjiyianni (University of Cyprus) and Dr. Max Munchmeyer (European University Institute) focused on the trade-off between these environmental ambitions and the current energy crisis.

European enviromental ambitions...

Prof. Hancher remarked that, according to the European Green Deal, the desired targets require the reduction of carbon emissions at least by 55% before 2030. As a matter of fact, the aim is to become net zero over the whole territory of the European Union. The goal set out by the European Commission is certainly ambitious, especially considering that the intention is to reach the aim while leaving nobody behind. The European Green Deal has triggered two consequences which are respectively the adoption of the European climate legislation and the revision of the existing legislation adopted in the last decade. Both these courses of action will have a noticeable impact as they will impose a general revision and reordering of the legislation regarding the green transition and the energy crisis, especially in the present times where order in these fields seems more necessary than ever. 

Despite the crisis, the underlying idea is to directly connect the sources of production to the sources of consumption, pursuing models of Regulations previously enacted in this field and applying them to the market-based energy trading created in the last thirty years. Therefore, the RePowerEu Plan proposed by the European Commission in March 2022 identified a roadmap to reduce the dependence on Russian fossil fuels and to fasten the energy transition. This roadmap was originally focused on three main pillars which are energy saving and energy efficiency, a massive acceleration of investment in renewables and diversification of energy supplies. A de facto fourth pillar was later included providing for gas and electricity price caps and market design reforms aimed at fighting the high prices. The latter have become crucial in light of the energy crisis. 

...and currently enacted policies 

At the moment, even the European Commission President Ursula Von der Leyen seems to have abandoned her previous faith in the market, due to the high political pressure from the Member States asking for a unified intervention on gas prices. There is much debate inside the Commission on whether to eventually move to a gas cap, thus adopting a positive action instead of leaving the energy market to adjust itself. Indeed, the adoption of an imminent regulation dealing with the gas market appears to be more and more likely. 

Prof. Hancher made a thoughtful consideration on how important it is to take a step back and analyse the present crisis with a critical eye. As a matter of fact, despite enormous investments of funds into the green transition, there are still many measures aimed at protecting fossil fuels. This is perceived as a sort of paradox and the question that spontaneously arises is what the longer-term impact of the Commission’s response would be.

Furthermore, over the last months there has been a great pressure on the storage of energy. Indeed, in the framework of the Green Deal up until 2019, encouraging storage of energy would have given a negative signal in terms of pursuing a green transition. In the UK storage facilities were shut down and in France state aid was provided to maintain the storage structures (it is doubtable whether such aids were compatible with the EU law treaties). Nevertheless, during the current energy crisis, it was noticed that these storage facilities were almost empty and controlled by gas firms, thus the fear of being out of gas seemed to be real. 

Therefore, the Commission enacted in 2022 a Storage Regulation, amending the previous one. The main trajectories of this Regulation were to ensure the compliance of the Member States in filling the targets and a common burden sharing between the Member States. The Regulation provides for several exemptions but strictly requires that the storage facilities placed in the EU Member States must be filled by 85%. Not every country possesses such storage structures, thus in these cases it is required a burden sharing among Member States. The underlying idea is that Member States should reduce in the next future the demand of gas by 15% (and in doing so they would have discretion) but if the Commission launched an alert, Member States would be compelled to reduce according to the requested percentage.

Energy solidarity and the need for increased cooperation

The context described by Prof. Hancher requires coordination and solidarity between Member States. Regarding this theme, Prof. Muchmeyer explained the role of solidarity in the European energy governance. In particular, the notion of solidarity is an intuitively positive but extremely broad concept. Nevertheless, the borders of the notion of solidarity in the energy governance are easily trackable. Indeed, art. 194 TFUE explicitly requires that the Union policy on energy shall be operated in the spirit of solidarity but the Member States have the right to determine the conditions for exploiting their own energy resources and have the choice between different energy sources and the general structure of their energy supply. Solidarity seems then to guide the European energy policy making but it does not really have a legal basis. 

The idea that the principle of solidarity lacks an explicit legal basis has been countered by many judgments of the Court of Justice of the European Union, which changed the point of view. Indeed, the Court of Justice in the Case C-848/19 P Germany v Poland underlined that energy solidarity is a justiciable principle under EU law, entailing reciprocal obligations between Member States and between the latter and the European Union. It must be noted that energy solidarity is not a principle that must be confined to emergency situations, and neither should be deemed as a synonym for energy supply. Member States have the duty to cooperate, but they retain a margin of discretion in the choices concerning the energy field as it is evident from art. 194 TFUE.

A piece of evidence showing the attempt to work in synergy according to the solidarity principle can be found in the fact that by June 2023 each Member State must submit a draft of its national energy and climate plans. These drafts must reflect the way Member States want to achieve the targets set for 2030. This requirement triggers a process of cooperation where the Commission evaluates the drafts and produces feedbacks, addressing the Member States with a language of solidarity.