Bulgaria gas transmission rules are legal, says ECJ
Bulgaria gas transmission rules are legal, says ECJ
Commission loses case accusing Bulgaria of not implementing 2009 rules on gas networks, but several other cases involving the Bulgarian energy sector are still outstanding.
Bulgaria did not breach its obligations under European Union energy rules, according to a ruling by the EU’s highest court yesterday (5 June) which rejected accusations by the European Commission.
The European Court of Justice held that EU gas transmission rules passed in 2009 do not require Bulgaria’s state-owned gas transmission company Bulgartransgaz to ensure that its gas transmission network allowed operators to exchange gas held in another country for gas in Bulgaria – a measure that would allow foreign operators to ‘import’ gas if Bulgarian prices rose. The Commission had asked the court to fine Bulgaria for breaching EU law by prohibiting such measures.
The Commission said in reaction to the judgment: “This judgment by no means prevents member states from offering virtual reverse flows and it does not change the Commission’s position towards virtual reverse flows. They are crucial for competition and market integration.”
It added that allowing so-called “virtual reverse flow” would become mandatory under new rules that would be applicable from 1 November 2015.
The case is one skirmish in a wider fight between the Commission and Bulgaria over the Bulgarian energy sector. This interest is in part due to Bulgaria’s important role as a transit country for gas to Europe. But Bulgaria has also marked itself out as one of the EU’s strongest defenders of Russia, at a time when relations between the EU and Russia are particularly sour.
Chief among the tensions between the Commission and Bulgaria is a spiralling dispute over the south stream gas pipe, which would open a new route to transport gas across the Black Sea and through Bulgaria and Serbia reaching Austria, Hungary and Italy.
The Commission has warned the member states involved that under the EU’s third energy package Gazprom cannot both provide the gas and manage the transmission pipes. These, in turn, must be open to all suppliers. On Monday (2 June), the Commission took steps to investigate whether Bulgaria broke EU public procurement rules when tendering the contracts for the work on the gas pipeline and asked it to suspend construction works. The Commission has also recommended suspending the south stream project in its European energy security strategy, presented in late May in response to the crisis in Ukraine.
Separately, the Commission’s antitrust division has two open cases against Bulgaria’s state-owned energy company Bulgaria Energy Holdings, which owns Bulgargaz and Bulgartransgaz. One case involves Bulgaria’s electricity sector, while the second is investigating allegations that the BEH is blocking other gas suppliers from using the Bulgarian transmission network.
The complaint in the second case was filed by Overgas. Until 2010 that company, which is part-owned by Gazprom, operated as the intermediary when importing Gazprom gas into Bulgaria. Overgas was cut out in 2010 and in parallel entered the Bulgarian market as a rival supplier to BEH.
The Commission’s competition department has paid growing attention to energy markets in Eastern Europe in recent years, with cases against Romanian, Polish, Czech and Slovak energy companies, as well as Gazprom.