PRESS RELEASE: EU’s winter package is a chance to boost energy infrastructure and raise the level of LNG supplies in Europe

The European Commission presented, on Tuesday, a proposal of new regulations aiming to strengthen the EU’s energy security. Brussels wants to put more emphasis on the development of energy infrastructure, based on a policy that is co-ordinated at both the EU and regional levels. Experts from Central Europe Energy Partners (CEEP) argue that it is a step in the right direction.

The new regulations have been designed to safeguard the security of gas and electricity supply, map out the strategy for LNG supply and storage, strengthen the position of EU institutions in the process of negotiating gas contracts for the Member States, and define challenges related to heating and cooling. According to Marcin Bodio, Chief Executive Officer of CEEP, the ‘winter package’ should be seen as a reaction to macroeconomic and geopolitical challenges that the European Union is facing these days. The EU is responding to these challenges by enhancing its internal market, diversifying the supplies of strategic resources, especially liquefied natural gas, and increasing the transparency in trade relationships between suppliers and consumers of energy resources.

“The package of new regulations is a step in the right direction. The key thing that these documents recognise is the role of transmission infrastructure – i.e. terminals, gas and oil pipelines, as well as systems for the transmission of electricity – in the process of creating a common market. This is especially important when considering the new strategy for LNG supply and storage. CEEP has been calling for the EU to adopt such a document. The common goal of the EU institutions and industry organisations, such as CEEP, is to allow a level playing field of LNG-access for all Member States. This demands prioritising infrastructure projects that will impact upon enhancing Europe’s LNG receiving facilities, inter-connections and reverse flows,” Marcin Bodio underlined.

The European Commission’s proposals are in line with the framework strategy for the Energy Union, which aims at the integration of national energy markets. This is expected to reinforce the security of supply of strategic resources and reduce the differences in prices, which largely result from the various ways that Member States are being treated by dominant oil and gas suppliers. This may not be solved without bringing together the continent’s energy systems. Whilst the Western part of Europe has been successfully integrating for more than half a century, Member States that joined the EU after 2004 still lack adequate infrastructure connections, not only to the Western part of Europe, but also on a strategic North–South axis.

“The focus of the ‘winter package’ is the corridor approach across the European Union. I fully approve of that, as it is only through a holistic approach to infrastructure – on both EU and regional levels – that we may reach the security of supply of strategic energy resources. To make these resources flow freely, wherever needed in Europe, we must act jointly, rather than as 28 separate energy systems. This will let us unify the potential powers of Western, Central and Eastern Europe. An important component of this plan should be the North–South Corridor, whose task is to integrate key infrastructure projects, including the existing and planned LNG terminals, from the Baltic to the Adriatic, and ultimately to the Black Sea,” Mr. Bodio added.

The passing of the ‘winter package’ through the EU legislative process will equal major changes for the European producers and consumers of energy. Yet, this will not impact upon the main determinant of the energy sector and energy-intensive industries, namely the emissions trading system (ETS). This refers especially to the market stability reserve (MSR) mechanism, which foresees the maintenance of high prices of CO2 emission units. This mechanism is supposed to be in force in the European Union in 2019. Experts are agreed that it may lead to the European economy further losing its competitiveness, when compared to such countries as the United States, Canada, or Australia, whose emission levels are twice as high as in in the EU.

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