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EU Energy Law as a barrier to Trade and Investment: A view from the Court

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Adrien de Hauteclocque (Court of Justice of the European Union; FSR) presents at the Vienna Forum on European Energy Law, 2014

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EU Energy Law as a barrier to Trade and Investment: A view from the Court

  1. 1. EU Energy Law as Barrier to Trade and Investment: A view from the Court This presentation does not contain any official position of the Court of Justice of the EU Dr Adrien de Hauteclocque Court of Justice of the EU, Luxemburg Loyola de Palacio Chair & Florence School of Regulation, EUI, Florence
  2. 2. EU Energy law & the single market project? • Ever expanding legislation… and legal complexity • Internal market: regulating for competition really? ex. network unbundling • Climate and Security of Supply objectives: – Member States back in the game – Dash for renewables and capacity mechanisms: free market as marginal patch? • Is any of this necessary, proportional or even adequate? → Controlling EU energy law?
  3. 3. EU Energy law vs. Primary EU law • Neutrality of property ownership (Art 345 TFEU) • Fundamental freedoms: free movement of goods, capital and establishment (Art 28-37, 49-55, 63-66 TFEU) • EU State aid control (Art 107/108 TFEU) • No discriminatory internal taxation (Art 110 TFEU) • General principles of EU law: mainly legal certainty and legitimate expectations
  4. 4. C-105-107/12, Essent NV • Questions: – prohibition of privatisation vs. Art 345 TFEU – Full ownership unbundling vs. free movement of capital (Art 63 TFEU) • Ruling: – Member states may legitimately pursue an objective of establishing or maintaining a body of rules relating to the public ownership of certain undertakings – prohibition of privatisation & unbundling rules constitute restrictions on the free movement of capital – Can it be justified?
  5. 5. C-105-107/12, Essent NV • Justified if dictated by reasons of an economic nature in the pursuit of an objective in the public interest • Aim of competition in energy is to protect consumers, which is an overriding reason in the public interest • Prohibition of privatization and full ownership unbundling not mandatory but pursue objectives sought by liberalization directives (= protection of consumers) • Prohibition of privatization and full ownership unbundling can be justified as pursuing overriding reasons in the public interest • The referring court must make sure it is adequate, necessary and proportional
  6. 6. AG opinion in C-573/12 Alands Vindkraft AB • Finish wind producers connected to the swedish grid could not get green certificate • Key question: compatibility of a national support scheme limited to national producers with Renewable directive (2009/28/EC) • The Renewable Directive does not oppose territorial restrictions as: – Cooperation mechanisms are optional – Guarantees of origin do not confer right of access to the support scheme – Validity of Renewable Directive with the free movement rules?
  7. 7. AG opinion in C-573/12 Alands Vindkraft AB • Obviously a restriction → is it justified? • Environmental protection allows discrimination as long as it is strictly proportional • Risk for stability (e.g. drop in certificate prices) of national- only support schemes not demonstrated and, in any way, limited (limited interco and embedded regulatory mechanisms) • Disincentive to use cooperation mechanisms • Not an undue interference in MS competence regarding energy mix • Financing green energy in another MS instead of domestic fossil fuel energy is a good thing
  8. 8. Conclusion • Commission’s State Intervention Package (11/2013): “The level, timing and nature of public intervention and how to reconcile such intervention with the internal electricity market and the EU acquis are questions which are becoming urgent, particularly in view of the completion of the internal electricity market in 2014.” • Primary EU law vs. Energy law & policy: from a supportive to a controlling role? • Primary EU law as a robust quality check? – Importance of the proportionality test • The role of the EU Court in this context
  9. 9. Contact: Dr Adrien de Hauteclocque Référendaire, Chamber of Judge M. van der Woude Court of Justice of the European Union (General Court), Luxembourg Advisor, Loyola de Placio Chair & Florence School of Regulation European University Institute, Florence tel: +352 43 03 4692 email: adrien.de-hauteclocque@curia.europa.eu

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