European Commisson seeks more control over energy contracts

The proposals are part of the EU’s wider “energy union” strategy launched last year to guarantee stable access to energy supplies

The EU Energy Commissioner, Miguel Arias Canete, said this week the aim “is simple: to prevent and mitigate possible security of gas supply crises” (STR/AFP/Getty Images)

The European Commission will unveil plans next Tuesday giving itself the power to vet energy contracts that EU member governments sign with other countries, as it tries to wean Europe off its dependence on Russian gas.

As the EU’s antitrust enforcer, the commission says the deals must comply with competition rules and cannot contain abusive clauses. This would avoid cases like the one it is currently pursuing against the Russian state energy monopoly Gazprom, which it has charged with unfair pricing in eastern Europe.

The EU Energy Commissioner, Miguel Arias Canete, said this week the aim “is simple: to prevent and mitigate possible security of gas supply crises”. He added that the plans would “make energy agreements more transparent and fully compatible with EU law” and ensure that energy deals “do not jeopardise the EU’s security of supply or the functioning of the internal market”.

The commission now has regulatory authority over contracts only after they are signed – and even then, it cannot block deals, but can only refer them to the EU courts. The new rules would oblige governments to send contracts them to Brussels beforehand for clearance.

The proposals are part of the EU’s wider “energy union” strategy launched last year to guarantee stable access to energy supplies by completing the single market, increasing energy security, boosting efficiency and reducing the use of fossil fuels.

The plan is seen as a way to prevent Gazprom from muscling too far into the EU’s energy market. The EU imported 53.4 per cent of all the energy it consumed in 2014, and its foreign natural gas dependency was 66 per cent. Some 34 per cent of the gas imports come from Russia alone and some members are almost entirely reliant on Moscow for energy.

The draft proposal says there have been concerns about one third of the intergovernmental agreements (IGAs) involving energy. “Experience shows that assessment by member states is not sufficient and satisfactory to ensure compliance of IGAs with EU law,” it says.