8th Vienna Forum on European Energy Law: 1st webinar on solidarity principle and just transition

The Vienna Forum on European Energy Law is an annual joint initiative of the FSR Energy Union Law Area and the Energy Community Secretariat which aims to bridge the gap in energy debate between the EU and Energy Community.

This year, for the 8^th edition of the forum, we will be moving online with four webinars across four weeks, focused on :

•  the solidarity principle,
• the European climate law,
• carbon pricing, and
• the role of the private sector in the energy transition.

To discuss these topics, we will bring together a panel of experts for a roundtable debate and a live Q&A session with our audience.

• With the EU’s mounting determination to see urgent and effective energy and climate action toward carbon neutrality across the Union, what principles and legal mechanisms will underpin the transition going forward?
• Will they be constructive, and can they ensure compliance?
• How will the deepening economic instability stemming from the coronavirus pandemic paired with the self-determining rights of Member States enshrined in the treaties shape these efforts?

In this webinar, together with a panel of experts, we will discuss the notion of solidarity between EU Member States and the mechanisms intended to support an equitable transition to a carbon neutral future.

Background

The principle of solidarity in energy has gained traction in recent months following a judgment of the EU General Court on 10 September 2019 in Case T-883/16 Republic of Poland v. European Commission (the ‘OPAL case’), as it formed the basis of the decision. For the first time, a principle typically used in general terms in EU legislation was interpreted as having concrete legal significance.

Briefly, the judgment (currently under appeal) annulled a previous decision of the European Commission relating to the OPAL pipeline, one of the onshore extensions of the North Stream pipeline, which carries Russian gas from the Baltic Sea into the German grid. The Commission decision had enabled Gazprom, the supplier, to utilise more than 50% of the pipeline’s capacity - in effect, handing Gazprom a monopoly despite the Third Energy Package regulations, which limit ownership of both infrastructure and transmission by the same entity in view of fair competition between the EU and third countries.

The judgment

The judgment of the CJEU held that the decision was in breach of the principle of energy solidarity. Drawing on the “spirit of solidarity” in Article 194 TFEU, the General Court held that the “principle of energy solidarity requires the European Union and the Member States to endeavour, in the exercise of their powers in the field of energy policy, to avoid adopting measures likely to affect the interests of the EU and other Member States as regards security of supply, its economic and political viability, the diversification of supply or of sources of supply, and to do so in order to take account of their interdependence and de facto solidarity” (para 73). The judgment noted that there should be a “balance” of interests in the face of such a conflict (para 77). What would be the wider repercussions of such a radical interpretation of the “spirit of solidarity”? And should such a principle have legal significance, or should it be relegated to the aspirational rhetoric it had been up to this point? Is it a case of “campaigning in poetry, ruling in prose”?

The principle of solidarity

If the principle of solidarity is upheld as a legal tool, it could have far-reaching consequences for the governance of energy and climate action. Could the principle be a gateway to a more interventionist form of EU governance? Could it be drawn upon should a Member State fail to contribute toward the common goal of carbon neutrality? Could it be a game-changer in the face of the non-binding targets for 2030? How does such an interpretation of the principle lie alongside the rights of Member States to determine their own energy mix, as detailed in Art 194 TFEU? Does such an interpretation of the principle jeopardise these rights? Could the pursuit of ‘solidarity’ supersede the sovereign rights of Member States?

The just transition mechanism

The EU is determined to “leave no one behind” in the transition to a carbon neutral union. One of the central mechanisms put forward to facilitate this as part of the EU Green Deal funding plan is the Just Transition Mechanism, which will provide financial support to the regions most affected by the socio-economic impact of the transition. At least €150 billion for the period 2021 – 2027 is expected to be directed toward this cause. Within this, there will be a new Just Transition Fund, which will broadly support economic diversification, clean energy, as well as environmental rehabilitation and an overhaul of carbon intensive infrastructures; a dedicated investment scheme, InvestEU, which aims to attract private investments; and a public sector loan facility supported by the EIB. However, some Member States expected to receive significant funding from the schemes, such as Poland, have signalled their plans to continue to invest in coal, for example. In effect, could these funds inadvertently ‘reward’ Member States for ‘bad behaviour’ or should this be viewed as part and parcel of the transition?

Throughout this webinar, we will explore these issues and more. We will critically assess the role of EU governance – its scope and efficacy – in ensuring energy and climate action is delivered across the Union, and the collective targets for 2030 and beyond to 2050 are met.

The Vienna Forum on European Energy Law - Webinar 1 - YouTube