Case

On 2 October 2014 the Energy Community Secretariat sent an Opening Letter in Case ECS-7/13 against Ukraine concerning the so-called local content clause in the Electricity Law of Ukraine. In the Opening Letter, the Secretariat takes the preliminary view that this clause violates Directive 2009/28/EC on the promotion of the use of energy from renewable sources, as well as Article 7 of the Treaty prohibiting discriminatory treatment.

Procedure

By sending an Opening Letter, the Secretariat initiates a preliminary procedure, the purpose of which is giving Ukraine the possibility, within two months, to react to the allegation of non-compliance with Energy Community law, and enabling the Secretariat to establish the full background of the case.

According to Articles 6 and 16 of the Rules of Procedure for Dispute Settlement, interested parties may be granted access to the case file and may submit written observations on the present case to the Secretariat within one month from 2 October 2014.

Steps taken

Upon legal action initiated by the Secretariat, the Ukrainian Parliament voted to remove the so-called local content clause in the Electricity Law of Ukraine.

The Law now entitles investors fulfilling certain local content quota to a bonus on top of the existing feed-in tariff, thus replacing a strict barrier to market access by a more differentiated instrument for supporting the development of the Ukrainian manufacturing and service industries.

Reasoning

Following the adoption of the amendments to the Electricity Law in Ukraine and the removal of the mandatory local content requirement for benefiting from support schemes for electricity produced from renewable energy, the Secretariat decided to close Case ECS-07/13. The Secretariat assessed these amendments and found them sufficient to rectify the breaches identified in the Opening Letter.