Energy policy: European Union vs Member States

The European Union has been facing for years hard and crucial challenges concerning the energy sector: on the one hand, the harmonisation and liberalisation of the internal energy market; on the other hand the reduction of its energy dependence mainly through the diversification of supply sources. These are two sides of the same coin. The first one closely linked to the internal dimension and to the fiscal and trade policies, and the second one more connected to the external dimension, to the relations with exporter energy countries. And it is not about two distinct areas of action, but it is more about two directions in which the European Union intends to move through the removal of numerous obstacles and trade barriers, the approximation of tax and pricing policies and measures concerning rules and standards, and provisions on climate action and environment safety. Furthermore, the EU is strongly engaged in ensuring energy security within the Union, promoting energy conservation, energy efficiency and the development of new and renewable energies and (above all) the interconnection of energy networks. In this sense, the European Commission moved during the dual mandate of Jose Manuel Barroso and today with Jean-Claude Juncker, the Vice President and Commissioner for Energy Union Maroš Šefčovič. The Third Energy Package (Directive 2009/72 / EC and Directive 2009/73 / EC) in particular, envisages the separation between the production and supply of energy and the management of transport and transmission networks as well as to facilitate the access of third party companies and ensure competitive prices for consumers. Such measures have an impact on the activities of the vertically integrated companies such as Gazprom, for what concerns the gas market, because they call for the obligation, under certain conditions, to downsize their penetration in the EU internal market. The European Union has also decided to set medium and long term objectives (2020, 2030 and 2050) to be achieved in terms of greenhouse gas emissions, energy efficiency, electricity interconnection and security of supply.

The European Commission recently published a report (“The State of the Energy Union”) that outlines a picture of the progresses achieved along the road to the Energy Union by the 28 Member States and at EU level and which will be yearly published in order to better monitor progresses made in terms of legislative measures and achieving of the targets set before. The report takes into account what happened in every pillar of the Energy Union. For example in the annexes to the report there is a list of projects of common interest (PCIs) for the completion of cross-border energy infrastructure that will contribute to a better integration of the internal energy market. The essential condition for the Commission’s objectives are achieved in the established manner and timing is this cooperation between Member States and EU is sincere and stable. The previous consideration is particularly important for what concerns investments in renewable energy but also for what concerns the energy supply where there is often not just a linear trend of the various countries that still act each one according to its most intimate national interest. The non-uniqueness of energy policies raises once again the emphasis on governance issues affecting the European Union, always held up, whatever the area under discussion, as the main causes of its failures.

For this reason, among the documents issued last November by the European Commission there is a Guidance to Member States on National Energy and Climate Plans as part of the Energy Union Governance, that aims at providing guidelines to Member States on the process of developing their integrated national energy and climate plan as well as the main elements. In fact, each National plan should adopt a holistic approach and address the five dimensions of the Energy Union (supply security, a fully-integrated internal energy market, energy efficiency, climate action, research and innovation) in an integrated way which recognises the interactions between them. This issue is relevant because if it’s true that the Member States have the right to develop policies suitable to national circumstances, it is also true that national plans should set out the direction of national energy and climate objectives and policies in a way that is coherent with delivering on the commonly agreed objectives of the Energy Union, in particular the 2030 targets.

There are several examples of how the Member States sometimes move towards the opposite direction to what is expected from Brussels, refusing to yield to the holistic approach of the Commission or ignoring the opportunities provided by a regional cooperation within the energy sector, especially when it comes to infrastructure transmission of electricity, transport of gas or its storage. The last in order of time is the project for the construction of a second Nord Stream offshore gas pipeline, which directly transports natural gas from Russia to Germany. During the last years, the European Union has pursued a policy of diversification of its sources of supply, looking for a reduction of the share of imports from Russia which today come mainly through the Druzhba pipeline (Friendship pipeline) running through the Ukrainian territory and that therefore are subject to a geopolitical logic (as events of 2009 and 2014 witness). Subsequently, following the sanctions to Moscow imposed after the crisis in Crimea, Brussels became convinced that the best way to support Ukraine was to support its economy and therefore continuing to import through the Druzhba pipeline. However, last September, Gazprom, the leader of the Nord Stream AG consortium that built the first pipeline, announced the doubling of the route. This move, would at the same time cut off some countries of the former Soviet Union from the big gas game and would give the clear impression that Germany is able (and wants) to give priority to its economic needs rather than to the common EU diplomacy. The opposition formally encountered by Italian Prime Minister Matteo Renzi at the European Council had an apparently important consequence, which caused a comeback of the Mediterranean route, given the stalemate of projects such as South Stream and Turkish Stream. Gazprom, together with the Italian company Edison and the Greek DEPA, has recently signed an agreement to supply gas to Italy via the Black Sea and Greece (ITGI – Interconnector Turkey-Greece-Italy): a project that, in any case, would bypass Ukraine proposing a very similar issue to the one raised by the potential doubling of Nord Stream. It will be important to understand, therefore, what the European Union thinks about this project.

Lots of countries still have import dependency above an acceptable threshold in particular for petroleum products and gas and a low interconnection capacity both for electricity and gas. Too often these countries look for a national solution to their own problems. Countries like the Western Balkans, for example, need to rebuild their energy systems in the name of reliability, sustainability and efficiency and they can only do that by integrating their national strategies. Croatia, which is at the moment the only EU Member State of the area, characterized by absence of competition, needs to improve the investment climate and create incentives for new entrants. There is currently no commodity exchange or gas hub. Wholesale gas trading is based on bilateral contracts just like in the other EU countries. Greece, where effective measures fostering competition on electricity retail and generation and gas distribution remain to be implemented, just like other Southern EU countries, has an import dependency above EU average. But it is also true that it has the potential to become a regional gas hub as it is located at the EU entry point of the Southern Gas Corridor and has access to LNG and gas supplies from Russia. Several gas projects are currently planned. The most relevant ones are: the interconnector Greece-Bulgaria, the Trans-Adriatic Pipeline and a new LNG terminal located in the Northern Aegean sea.  Italy too could play an important role as Mediterranean gas hub but the opposition from local authorities could prevent this design. The construction of the Trans Adriatic Pipeline, target of this opposition, could make Italy an important hub for the reverse flow capacity of the EU from the South to the Northern markets. Projects like this one aim to diversify the sources of supply and to reduce national dependence on Moscow but do not imply a sudden turnaround like the one taken by the EU after the economic sanctions to Russian Federation. In fact no EU country was able to cut its energy relations with Russia after the Crimean crisis and no Country found the juridical basis to break the contracts signed with Russian oil and gas companies.

Security of supplies still is the main concern for importer countries and every national strategy can only be effective if part of a broader and shared idea. The European Union is moving to that but in a chaotic way. In fact if it’s true that the last Energy Security Strategy launched by the EU claims the right for the Commission to make checks before the signing of an agreement between a Member State and a third country in order to assess its compatibility with EU rules, it is also true that these checks are not binding. The energy market continues to be one of those areas in which Countries are reluctant to give more autonomy to the EU.


Francesco Angelone

Master’s degree in International Relations (LUISS “Guido Carli”)




Angelone, Francesco. “The Western Balkans: another challenge for European energy integration”, Mediterranean Affairs, Dossier n.2, July, 2015.

“State of the Energy Union 2015. Communication from the Commission”, European Commission, 18th November, 2015.

“Guidance to Member States on National Energy and Climate Plans as part of the Energy Union Governance”,

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Accept Read More