OPAL: Germany loses appeal; possible repercussions on Nord Stream 2

 As well known, Germany has lodged an appeal against the EUGC decision concerning the quantity of gas passed through the OPAL pipeline. The ECJ rejected this appeal

Handelsblatt writes:

In the dispute over the expansion of Russian gas supplies, Germany suffered a defeat before the European Court of Justice (ECJ). In a judgment published on Thursday, the ECJ rejected Germany's appeal against a decision by the EU court. Specifically, it is about larger delivery volumes through the Opal pipeline, an extension of the first Nord Stream pipeline in the Baltic Sea, which has been in operation since 2011 and through which Russian gas is transported to Europe (Case C-848/19).

Poland had filed a lawsuit against the larger delivery quantities before the General Court of the European Union (EU-G), arguing that they endangered the country's security of supply and violated the principle of energy solidarity. The court upheld the action, whereupon Germany appealed to the ECJ, which has now been rejected.

In September 2019, Poland had a decision by the EU Commission stopped at first instance, which allowed the Russian Gazprom group to make greater use of the Opal pipeline (case T-883/16). Gazprom was originally only allowed to use half the line capacity in order not to put other suppliers at a disadvantage. With a resolution from 2016, the EU Commission allowed Gazprom to significantly increase delivery volumes at the request of the Federal Network Agency. The ECJ has now confirmed that this decision was rightly declared null and void by the EU-G.

A previously published opinion by the Court of Justice stated that Germany "essentially asserts that energy solidarity is merely a political term and not a legal criterion". Accordingly, no direct rights and obligations could be derived from it.

The supreme court of the EU is now contradicting this. Since the principle of solidarity underlies all the objectives of the Union's energy policy, it cannot be assumed that it does not produce any binding legal effects. The principle includes rights and obligations for EU countries.

EUGC sentence in OPAL lawsuit explained

In a lawsuit opposing the European Commission and Poland on the subjects of the internal gas market and the principle of energy solidarity, the EU General Court (the lower court of the European Court of Justice) ruled in favour of Poland in a September 10 2019 sentence.

The litigation began, when Poland disapproved yet another exception from the rules of the EU-gas-directive granted to the pipeline operator of OPAL in Germany.

OPAL (short for: Ostsee-Pipeline-Anbindungsleitung) is the pipeline that takes natural gas from Nord Stream 1 (operating since 2011) at the feeding point in north german Lubmin and forwards it through eastern Germany and to the Czech Republic.

In 2009 the german national regulatory authority Bundesnetzagentur (BNetzA) made a request to the European Commission for two exceptions from stipulations of the EU-gas-directive to the benefit of the operator of OPAL that was not yet completed at that time.

The requested exceptions concerned the rules on third party access and tariff regulation the EU-gas-directive. Underlying is the problematic issue of the respective shares held by the two owners of the OPAL pipeline:  The Opal pipeline is owned by WIGA Transport Beteiligungs-GmbH & Co. (‘WIGA’, previously W & G Beteiligungs-GmbH & Co. KG, previously Wingas GmbH & Co. KG), which owns an 80% share of that pipeline, and E.ON Ruhrgas AG, which owns a 20% share thereof. WIGA is jointly controlled by OAO Gazprom and BASF SE. The company operating the share of the OPAL pipeline belonging to WIGA is OPAL Gastransport GmbH & Co. KG.
The European Commission approved those exceptions.

In 2013 and after that in 2016 the BNetzA requested adaptions to the exceptions granted in 2009 to the operators of the OPAL pipeline that was completed and operating by that time.

The variation proposed by the BNetzA consisted of replacing the restriction imposed by the original decision on the capacity that could be reserved by dominant undertakings and in consequence increase the capacity of the pipeline.

In October 2016, the Commission adopted the exemption of the OPAL pipeline from the requirements on third party access and tariff regulation.

Poland brought legal proceedings against this decision before the EUGC claiming that this decision violates several principles of EU law and international treaties and therefore should be annulled.