Exceptions to free movement of goods art 30: + Must not discriminate + conform with general principles esp proportionality +other exceptions added by ECJ where no Community legislation esp. in Cassis de Dijon case 120/78: -Public health, fairness of public transactions, consumer protection: ECJ calls these mandatory requirements + must not discriminate + only if necessary -together called “rule of reason” Danish bottles case 302/86 -Environmental protection added to list Mandatory requirements are considered essential objectives of EC Treaty.

EU Energy facts Energy use far greater than supply from within 6% global population, 15% energy consumption Current: 41% oil, 22% gas, 16% coal, 15% nuclear, 6% renewables 75% oil imported Current: electricity produced from nuclear (35%), coal (27%), gas (16%), renewables (15%), oil (8%) Nuclear decrease expected Transport totally oil dependant Households are large consumers, 63% use oil/gas 16% rise in vehicular traffic, 90% air traffic increase expected Oil price per liter $20 to be expected

EU oil reserves 8 yrs at current rate EU gas reserves 20 yrs 200 yrs supply of coal – quality low, high cost ($150/T vs $40 imported) World uranium reserves 40 yrs EU energy imports 50% (US 24%, Japan 80%) Reduced from 60% in 1973 Dependance on transit countries Only technology intensive renewables can help mitigate dependance Demand management a must, harmonised taxation a must

Reduce non-sustainability Reduce risks associated with dependance How? Reduce energy demand –Reduce waste –Increase efficiency Appliances Transport Industry More competetive energy markets –Price transparency –Access to existing networks –Integration of energy markets »Uniform legal framework for electricity/gas markets –Consumer awareness

Diversify –double renewable energy sources 12% by reduction of fuel imports by 17.4%, reduction of CO2 emissions Integrate environment into energy policy

Aspects of EC energy law Post WW II –Great need for energy –Worry about German monopoly on coal –Need to coordinate control together European Coal and Steel Community 1951 Euratom little regulation –Increasing dependance on oil –Minimum stocks crude – 90 days

EC Treaty provisions Single European Act 1986 Art 95 cooperation procedure introduced Achieve internal market by 1992 (art 14) Commission initiatives in electricity/gas markets re free movement of goods 1992 Maastricht Treaty Art 3(u) Commission justifies measures on basis of competition rules, free movement measures, security of supply, environmental protection, employment, technology development

Energy products are goods –Arts 28/29 –Exceptions art 30 esp public security + Cassis de Dijon rule of reason exceptions –What is public security? Security of supply why? 80% oil, 40% natural gas, 30% coal imported. Not sustainable Campus Oil case 72/83 But Commission v Greece 347/88 How much should be protected? –Aim for 15% of electricity supply to be protected

Energy firms subject to competition articles –Arts 81/82 But individual exemptions can be given by the Commission Eg Jahrhundertvertrag Decision 22 Dec 1992 or block exemptions, or negative clearance

State aid –Arts 87/88 –Some aid compatible: Art 87(2) –Some aid may be compatible Art 87(3) Energy saving schemes, diversification projects may serve common interests of environmental protection, security of energy supply –ECJ Re preferential energy tariffs C67/68, C70/84

Secondary legislation –Energy efficiency directive 93/76/EEC – MS obligations Energy certification buildings Billing proportional to costs Thermal insulation Regular inspection > 15 KW Energy audits + notify measures, report on results

Access to markets by newcomers –Long term contracts –back-to-back contracts (exclusive purchase and supply agreements) Need exemptions Regulation of internal energy market –Directives 2003/55, 2003/54 –Common rules on common rules on supply, storage, transmission and distribution of natural gas/electricity.

Directive on natural gas market –liberalise 33% of the Community's entire gas market by 2008 –MSs may impose public service obligations security of supply Regularity quality and price environmental protection –Authorise –Monitor supplies –Minimum tech reqs. For interoperability –Transmission/distributor operator obligations –Unbundle transmission/distributor operators from others –Transparent accounts –Access to systems Grounds for refusal of access

Results so far? 2004 Commission report on gas and electricity: –security of supply import capacity more than adequate LNG storage facilities More emphasis on renewables –public service and user/consumer protection July 2007 all customers will be to choose most attractive suppliers Transparent information to be provided re source of supply –environmental aspects Maintain incentives to support and prioritise penetration by renewables, reduction of emissions and demand management MS should impose min level use of renewables for electricity 7000MW renewables and efficient CHP generation capacity added in 2004 to companies MS keep control of type of fuel, may suspend 3 rd party access MS control consumption due to falling prices

Fuel switching will reduce CO2 emissions but Support for renewables insufficient (12% target too low); more aid required. Nuclear phase out Increase in transport then, CO2 emissions will increase to 20% of 1990 levels by 2020 Urgently need political action Common/better energy policy Common/better transport policy

Issues for debate what degree of external energy dependance does the EU want? Energy demand must be further reduced Should not renewable energy technologies be given aid to the same degree that fossil fuels have been? Should fossil fuel industry not contribute to renewables development? How can further GHG emissions reductions be made? How can the imbalance between road v rail/water transport be addressed? Unpopular measures against the car must be made How much government intervention is required to achieve sustainable development? What is the ultimate aim of competition, how does it affect efficiency/equity in the long run?