Liberalization of the Energy Market in EU

The third energy package is more democratic than the proposal presented by the European Commission in September 2007, which strictly separated the production of oil, gas or electricity from their transportation. All the large European energy companies opposed that idea.

Now the same company is allowed to control the production and transport of gas.

The old rules would also have severely limited Gazprom’s opportunities for expansion in Europe. The document was amended under the pressure of France and Germany (which receive 15 and 40 percent of their natural gas from Russia, respectively).

As Russian business paper Kommersant reports, an important point in the new agreement is the so-called division of activities, under which an energy producer can buy assets in an EU country and own a distribution network in the same country, but the network has to have an independent operator.

Energy companies will not have to sell their distribution companies in neighboring companies if production and distribution are carried out by different divisions of the company. Energy producers will not be able to buy companies that only distribute energy, such as in The Netherlands.

Foreign companies operating in the European Union will be subject to the same rules as local companies.

An energy company from a third country will need the permission of one EU and European Commission member to operate. Individual countries will be able to decide whether or not to allow foreign companies access to their energy assets.

The new proposals should be approved by the European Parliament by the end of the year or beginning of next year.

Author: Ksenia Kochneva