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    Poland claims final victory in OPAL case

Summary

The Court of Justice of the EU has recognised the issue of solidarity.

by: William Powell

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Poland claims final victory in OPAL case

Polish state gas company PGNiG has claimed final victory over OPAL, a 36.5bn m³/yr pipeline in Germany, in the Court of Justice of the European Union (CJEU). The CJEU ruled that the European Commission (EC)'s decision exempting it from EU regulations regarding its use violated the principle of energy solidarity. "The verdict strengthens Poland's energy security and may be important for the further fate of the Nord Stream 2 project," PGNiG said July 15.

The EC acted contrary to the principle of energy solidarity and did not take into account the interests of all member states concerned, the CJEU found. OPAL is the larger of the two pipelines carrying Nord Stream 1 gas south from Germany's coast. As Gazprom has never auctioned off any gas as part of a release programme, it has sole access to its entry point. 

“The principle of energy solidarity is fundamental and EU institutions are obliged to apply it when making decisions on energy matters. We expect the energy solidarity principle to be applied to the Nord Stream 2 project. The CJEU judgment significantly strengthens our position in this matter," said PGNiG's CEO Paweł Majewski.

In 2016, the EC exempted OPAL from the need to share capacity with other users than Gazprom, a decision challenged by the Polish government, which was supported by PGNiG. Latvia and Lithuania threw their weight behind the challenge as well as they believed the EC had failed to examine the impact of the regulatory exemption for OPAL on the energy security of these countries.

In 2019, the General Court of the European Union in Luxembourg agreed with Poland and found that the EC's decision violated the principle of energy solidarity. This ruling was challenged by the German government, which appealed to the CJEU questioning the legal meaning of the energy solidarity principle.

The CJEU's ruling means OPAL will be subject to regulations limiting the dominant supplier's ability to use the entire capacity of the pipeline. At the same time, the ruling clarifies the importance of the principle of energy solidarity, which is the key principle enshrined in the Treaties. Its application in accordance with the guidelines expressed in the judgment will strengthen the internal market and energy security of both the EU as a whole and individual member states. This provides an important basis for the articulation of Polish interests in the matter of the legal regime to which the Nord Stream 2 gas pipeline should be subject, PGNiG said.

Proceedings concerning Nord Stream 2 's application for derogation from EU law are pending before the Higher Regional Court in Dusseldorf. PGNiG is an active participant of the proceedings and cooperates with the Polish government in the case.

NordStream 2 AG, the operator of the almost-complete 55bn m³/yr pipeline wholly owned by Gazprom, is applying for status of independent operator, which is distinct from full ownership unbundling. But it continues to challenge the application of the EU gas directives to offshore pipelines and is pursuing its claim that the European Union has violatedthe Energy Charter Treaty that is intended to protect investors' interests.

OPAL Gastransport operates the OPAL, a pipeline approximately 470 kilometers in length which runs in a southerly direction from the Nord Stream landing point in Lubmin near Greifswald as far as the Czech Republic. Along the route, the natural gas pipeline with a transport capacity of 36 billion cubic meters of gas per year crosses the federal states of Mecklenburg-Western Pomerania, Brandenburg and Saxony.