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WP3: Juridical aspects - assessment and
guidelines for practical implementation
Making the best of a bad job?
Interpretation and Implications
of Article 194(2)TFEU.
Based in part upon work completed with Eva van der Marel
in the context of the IEE-supported project:
Angus Johnston
(University College and
Faculty of Law,
University of Oxford)
→ Johnston & van der Marel, ‘Ad Lucem? Interpreting the
New EU Energy Provision, and in particular the Meaning of
Article 194(2) TFEU (2013) 22(5) EEELRev 181.
Contract number: IEE/10/437/SI.2.589880, project duration: from
Midterm
Brussels,
October
10, 16
2012
Slide 1
EU
EnergyConference,
Law & Policy
workshop,
Brussels
May… 2014
07/2011 to 10/2013,
Web: www.res-policy-beyond2020.eu
Email: [email protected]
WP3: Juridical aspects - assessment and
guidelines for practical implementation
An EU-level instrument requires:
1) a legal basis;
2) compliance with existing EU law.
Potential legal bases in the TFEU:
• Article 114 TFEU
(generic internal market provision)
no longer applicable in energy because of more specific provisions
• Article 192 TFEU
(lex specialis for environmental
concerns) [shared competence]
• Article 194 TFEU
(lex specialis for energy) [shared
competence]
Contract number: IEE/10/437/SI.2.589880, project duration: from
Midterm
Conference,
Brussels,
October
10,2013
2012
Slide 2
EU
Oxford
Energy
Dissemination
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event,
workshop,
18 September
Brussels
16
May… 2014
07/2011 to 10/2013,
First Conclusions
WP3: Juridical aspects - assessment and
guidelines for practical implementation
Article 194 TFEU
Legislative competence in the energy sector:
• incl. for measures on renewable energy sources (see next slide);
• “Lex specialis” nature confirmed in Case C-490/10 Commission v.
Council.
Article 192 TFEU
Legislative competence for environmental protection:
• for measures with the environmental objectives listed in Article 191;
• N.B. Article 192(2)(c): unanimity voting in the Council required for
those measures with a significant impact upon: choice between
different energy sources; or the general structure of its energy supply
[BUT NOT concerning conditions for exploiting a MS’s energy resources: cf.
Article 194(2)].
Dual legal basis?
Only if the measure:
• pursues the objectives of both provisions in equal measure; and
• the provisions have the same procedural requirements (here = problematic).
 Using joint legal basis (Articles 192 and 194 TFEU) to circumvent difficulties with
interpretation of Article 194(2) TFEU (‘without prejudice’ – see next slide)?
Contract number: IEE/10/437/SI.2.589880, project duration: from
Midterm
Conference,
Brussels,
October
10,2013
2012
Slide 3
EU
Oxford
Energy
Dissemination
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event,
workshop,
18 September
Brussels
16
May… 2014
07/2011 to 10/2013,
Lex specialis since Lisbon
WP3: Juridical aspects - assessment and
guidelines for practical implementation
Article 194 TFEU:
“1. In the context of the establishment and functioning of the internal market and with
regard for the need to preserve and improve the environment, Union policy on energy
shall aim, in a spirit of solidarity between Member States, to:
(a)
ensure the functioning of the energy market;
(b)
ensure security of energy supply in the Union;
(c)
promote energy efficiency and energy saving and the
development of new and renewable forms of energy; and
(d)
promote the interconnection of energy networks.”
 Ordinary EU legislative procedure (EP & Council jointly legislating), Qualified
majority voting in Council required: Article 194(2) TFEU, first sentence.
BUT … Article 194(2) TFEU, second sentence:
“Such measures shall not affect a Member State's right to determine the conditions for
exploiting its energy resources, its choice between different energy sources and the
general structure of its energy supply, without prejudice to Article 192(2)(c).”
 No alternative legislative procedure provided! [Cf. Article 194(3), e.g (etc).]
Contract number: IEE/10/437/SI.2.589880, project duration: from
Midterm
Conference,
Brussels,
October
10,2013
2012
Slide 4
EU
Oxford
Energy
Dissemination
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event,
workshop,
18 September
Brussels
16
May… 2014
07/2011 to 10/2013,
WP3: Juridical aspects - assessment and
guidelines for practical implementation
How to interpret
Article 194(2) TFEU?
“Such measures shall not affect a
Member State's right to determine:
-
the conditions for exploiting its
energy resources;
-
its choice between different energy
sources; and
-
the general structure of its energy
supply
Member States’ “energy rights”
… without prejudice to Article 192(2)(c).”
Contract number: IEE/10/437/SI.2.589880, project duration: from
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Conference,
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October
10,2013
2012
Slide 5
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Oxford
Energy
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event,
workshop,
18 September
Brussels
16
May… 2014
07/2011 to 10/2013,
WP3: Juridical aspects - assessment and
guidelines for practical implementation
Suggested interpretations (1)
Absolute competence block:
The EU measure shall to no extent affect Member States’ “energy rights”.
An EU measure the basis of Art. 194 is therefore subject to serious limitations.
 Result = no, or perhaps some form of minimum, harmonisation.
This would be an unattractive conclusion:
- hard to see on this interpretation how the EU could ever adopt any
meaningful legislation on energy at all under Art. 194 TFEU;
- hard to square with the express acknowledgment that the EU’s competence
in the field of energy is shared with the Member States ...
Contract number: IEE/10/437/SI.2.589880, project duration: from
Midterm
Conference,
Brussels,
October
10,2013
2012
Slide 6
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Oxford
Energy
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event,
workshop,
18 September
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16
May… 2014
07/2011 to 10/2013,
WP3: Juridical aspects - assessment and
guidelines for practical implementation
Suggested interpretations (2)
Threshold of some level:
[which could underlie the following interpretations]
An EU measure shall not significantly affect Member States’ “energy rights”.
An EU measure on the basis of Art. 194 is therefore subject to some limitations.
 Result = at best, some form of minimum harmonisation.
•
Drawing a parallel with similar provisions:
Art. 192(2)(c) TFEU – unanimity voting for measures which have a “significant effect” upon a
Member State’s choice between different energy sources and the general structure of its
energy supply.
•
Precedents for imposing an ‘appreciability’ test:
Art. 101 TFEU
- “appreciable extent” (Case 22/71 Béguelin Import Co)
Art. 34 TFEU
- market access test? (Cases C-142/05 Jetskis and C-110/05
Trailers)
Contract number: IEE/10/437/SI.2.589880, project duration: from
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Conference,
Brussels,
October
10,2013
2012
Slide 7
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Oxford
Energy
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event,
workshop,
18 September
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16
May… 2014
07/2011 to 10/2013,
WP3: Juridical aspects - assessment and
guidelines for practical implementation
Suggested interpretations (3)
Unanimity voting:
An EU measure shall not affect Member States’ “energy rights” unless all Member
States agree.
An EU measure on the basis of Art. 194 is therefore subject to a veto.
 Result = any level of harmonisation possible (but full harmonisation likely
to be vetoed).
•
History of the Constitutional Treaty decision-making process suggests
that unanimity voting was initially intended under Art. 194(2) TFEU;
… however, this was not maintained throughout the process;
… explicit reference to unanimity voting in Art. 194(3) TFEU with regard to
fiscal measures.
Contract number: IEE/10/437/SI.2.589880, project duration: from
Midterm
Conference,
Brussels,
October
10,2013
2012
Slide 8
EU
Oxford
Energy
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workshop,
18 September
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May… 2014
07/2011 to 10/2013,
WP3: Juridical aspects - assessment and
guidelines for practical implementation
Suggested interpretations (4)
Derogation options / an “opt-out” clause in the EU measure:
An EU measure may (significantly) affect Member States’ “energy rights” as long they
can opt out (thus protecting those “energy rights” adequately).
An EU measure on the basis of Art. 194 is subject to derogations/ opting out.
 Result = some form of (not full) harmonisation (subject to the scope of the
derogation or “opt-out” possibilities).
•
Drawing upon Art. 114(4) and (5) TFEU derogation options (either
applying them directly, or taking them as inspiration for interpreting Art.
194(2)).
•
“Opt-out” clause along the lines of the Commission’s proposal to amend
the Deliberate Release of GMOs Directive.
•
Problematic: derogations / “opt-outs” would limit the scope of the EU
measure significantly; and would feed back into law-making process,
encouraging Member States to insist on looser rules, exceptions, etc.
Contract number: IEE/10/437/SI.2.589880, project duration: from
Midterm
Conference,
Brussels,
October
10,2013
2012
Slide 9
EU
Oxford
Energy
Dissemination
Law & Policy
event,
workshop,
18 September
Brussels
16
May… 2014
07/2011 to 10/2013,
WP3: Juridical aspects - assessment and
guidelines for practical implementation
Other EU-level energy developments?
• EU free movement law implications for national RES-E promotion
schemes:
- potential impact of Joined Cases C-204 to 208/12 Essent Belgium (Opinion of AG
Bot, May 2013) and Case C-573/12 Ålands Vindkraft (Opinion of AG Bot, January
2014) (both pending before the CJEU)?
- implications for EU legislative design, link to Art. 194(2) TFEU?
• EU State aid law implications?
- Case C-379/98 PreussenElektra [2001] ECR I-2099, evolution of the Commission’s
decisional practice and recent case law (e.g. Case C-677/11 Doux Élevage v. CIDEF
(CJEU, 30 May 2013) and Case C-262/12 Vent de Colère (CJEU, 19 December 2013)):
implications for MS ability to design (e.g.) national RES support schemes, without
needing to notify?
- implications of Article 194(2) TFEU for new Commission Energy and
Environmental Aid Guidelines (EEAG) (April 2014)?
• None, because not adopted under Art. 194 (see, e.g., Case T-370/11
Poland v. Commission (7 March 2013)) but rather under State aid law
powers?
• Or a need to defend competence allocation elsewhere in the TFEU
(parallel to old approach to defending EC competence from Council
action under old TEU powers re CFSP, etc)?
Contract number: IEE/10/437/SI.2.589880, project duration: from
Midterm
Conference,
Brussels,
October
10,2013
2012
Slide 10
EU
Oxford
Energy
Dissemination
Law & Policy
event,
workshop,
18 September
Brussels
16
May… 2014
07/2011 to 10/2013,
WP3: Juridical aspects - assessment and
guidelines for practical implementation
Conclusions
• Less far-reaching / ambitious EU-level mandatory
legislative rules on energy seem likely to be more legally
(and politically: see also subsidiarity and proportionality
considerations) feasible (especially after the advent of
Article 194 TFEU).
• Future (Minimum) Harmonization measures will leave
significant leeway, and responsibility, to the Member
State level, while requiring vigilant monitoring,
information-gathering and (if necessary) enforcement by
the Commission.
• Potential for impact of Article 194(2) TFEU upon other
EU (Commission) activities too ... ?
See, further:
Johnston & van der Marel, ‘Ad Lucem? Interpreting the
New EU Energy Provision, and in particular the Meaning of
Article 194(2) TFEU (2013) 22(5) EEELRev 181.
Contract number: IEE/10/437/SI.2.589880, project duration: from
Midterm
Conference,
Brussels,
October
10,2013
2012
Slide 11
EU
Oxford
Energy
Dissemination
Law & Policy
event,
workshop,
18 September
Brussels
16
May… 2014
07/2011 to 10/2013,

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