The Obstacles in the Creation of a Common EU Energy Policy

By Aleksander Thomas. Originally published on 2013/03/05

Energy today is one of the most important issues on the world politics agenda, since energy is a key element for the economy and, hence, the development of a state. Energy is of such a high priority for the EU because the European Union as the largest oil and gas importer in the world is one of the main players in energy field. The European Commission (EC) and some member states (mostly the new members) have recently started to push for a more coherent energy policy for the EU. Frank Umbach[i] believes that the events in the early 2000s signalled the dangers of dependency on a single energy supply provider and the events in the 1970s where oil prices reached record levels indicate a need to search for alternatives to oil.

The EC has issued several documents on energy drawing attention to a lack of integrated planning within and between the member states. The first significant initiative was the issue in 2000 of a Green Paper entitled “Towards a European Strategy for the Security of Energy Supply”. This was an attempt, as Bjorkman and Mathias[ii] observed, to form a comprehensive energy security strategy for the EU. But as the function of Green Papers is only to foster a discussion in the community over important issues and not make any commitment to action, no significant changes in the energy sector came from this effort. The EC picked up the energy matters again in 2006, when it released its second Green Paper called “A European Strategy for Sustainable, Competitive and Secure Energy”. Bjorkman and Mathias argued that “if the 2000 Green Paper provides the blueprint for a lofty vision of European energy policy, the 2006 Green Paper, sets the foundation for the shape and direction of the EU’s future external energy policy“. The 2006 Green Paper outlined three main objectives for the EU common energy policy, namely, to ensure sustainability in energy resources usage, competitiveness of the energy market and security of energy supplies. In addition it identified six key areas where action was required to tackle energy challenges, namely: competitiveness and the internal energy market; diversification of the energy mix; solidarity; sustainable development; innovation and technology; and external policy. The progress in these six areas of the energy sector was proposed to be tracked and presented to other EU institutions by regular Strategic Energy Reviews. Both the Parliament and Energy Council have in general endorsed the Commission’s proposals at least after the second Strategic Energy Review in 2009.

The EU puts a considerable effort in to the promotion of energy research and the development of efficient and environmentally friendly energy sources under the 7th Framework Research Programme. Evidence suggests that EU member states even though barely coordinated, appear to share the ground for the sustainability of energy and act accordingly.

A major aim of EU energy policy is to develop a single energy market in the community. Yet according to Wyciszkiewicz[iii], Energy does not yet work under single market principles, primarily because there is a lack of interconnectedness between member states; and second as Meritet[iv] observed States still play quite an active role in their energy sectors. For a single energy market to operate there needs to be an interconnection between the member states on both the physical and legislative levels. On the physical level it is interesting to note, that there are still energy islands in the community such as the Baltic States, Ireland and Malta, that are either linked only to energy sources outside of community borders or lack these links at all (European Commission (2006a) ‘A European Strategy for Sustainable, Competitive and Secure Energy’, COM 105[v]). In addition as Wyciszkiewicz noted, there is still limited coordination on energy sector laws and regulations as all member states pursue individual energy policies. Without shared legislative ground and physical interconnection of energy links it is extremely hard and even impossible for a single energy market to work.

Furthermore as commented by Barysch[vi], not all member states show willingness to open their energy sectors to the single market, implying privatisation or at least vertical disintegration of single energy companies into separate energy producing, transmitting and distributing companies. The UK and Denmark are pioneers, being the first to disintegrate and privatise their national energy companies and later on to open their borders for other member states’ companies. Both aforementioned states are the main supporters of the European Commission in promoting the single energy market. On the other side of the spectrum according to Meritet, is France, which is often called “black sheep” for its reluctance to liberalise the energy sector.

The last aim of a common energy policy is to ensure the security of energy supplies. The EU, is the greatest energy importer in the world and so has a very high dependency on imported energy: Belyi[vii] estimates that currently over 50% of its energy is imported and this amount is projected to increase up to 70% by 2020. For example the import of gas will increase from 57% in 2006 to 84% by 2030, and oil import respectively will increase from 82% to 93%. The security of supply can be ensured both through the diversity of the energy mix and the diversity of energy suppliers (European Commission (2006) ‘A European Strategy for Sustainable, Competitive and Secure Energy’, COM 105).

While the EU is showing attempts to diversify its energy mix, especially with the promotion and expansion of renewable energy, the main energy sources still remain gas and oil, the first one predominantly used for electricity production and the second for transport. Therefore, energy supply imports will remain essential. There are also significant differences in the ways that oil and gas are imported. While oil has more flexible methods for import, gas at the moment can only be imported through a pipeline system. Moreover, the EU imports its gas from only three suppliers, Russia, Norway and Algeria, of which Russia presently is the main supplier covering 42% of EU gas imports.

EU member states appear to share the understanding that it is extremely important to ensure security of energy supplies, however, they differ on the choice of whether this goal should be achieved through common and coordinated action or individually. Wyciszkiewicz notes that Poland, with the support from the Baltic States, is the greatest promoter of a common action. It has often voiced requests for EU to speak in one voice over energy issues and has even made a proposal for a European Energy Security Treaty.

[i] Umbach, Frank (2007) ‘Towards a European Energy Foreign Policy?‘ Foreign Policy in Dialogue 8(20), p.7-16

[ii] Bjorkman, Mathias (2009) ‘The Europeanization of External Energy Policy?: The European Energy Security Debate from a Historical-Institutional Perspective’

[iii] Wyciszkiewicz, Ernest (2007) ‘One for All – All for One” – The Polish Perspective on External European Energy Policy’, Foreign Policy in Dialogue 8(20), p.34-43

[iv] Meritet, Sophie (2007) ‘French Energy Policy in the European Context’ Foreign Policy in Dialogue 8(20), p.25-34

[v] European Commission (2006a) ‘A European Strategy for Sustainable, Competitive and Secure Energy’, COM 105

[vi] Barysch, Katinka (2007) “Russia, Realism and EU Unity,” Centre for European Reform Policy Brief

[vii] Belyi, Andrei B. (2003) ‘New Dimensions of Energy Security of the Enlarging EU and Their Impact on Relations with Russia’ European Integration 25, p.351-369