REPORT on the proposal for a regulation of the European Parliament and of the Council concerning measures to safeguard security of gas supply and repealing Directive 2004/67/EC

29.3.2010 - (COM(2009)0363 – C7‑0097/2009 – 2009/0108(COD)) - ***I

Committee on Industry, Research and Energy
Rapporteur: Alejo Vidal-Quadras

DRAFT EUROPEAN PARLIAMENT LEGISLATIVE RESOLUTION

on the proposal for a regulation of the European Parliament and of the Council concerning measures to safeguard security of gas supply and repealing Directive 2004/67/EC

(COM(2009)0363 – C7‑0097/2009 – 2009/0108(COD))

(Ordinary legislative procedure: first reading)

The European Parliament,

–   having regard to the Commission proposal to the European Parliament and the Council (COM(2009)0363),

–   having regard to Article 251(2) and Article 95 of the EC Treaty, pursuant to which the Commission submitted the proposal to Parliament (C7‑0097/2009),

–   having regard to the Communication from the Commission to the European Parliament and the Council entitled "Consequences of the entry into force of the Treaty of Lisbon for ongoing interinstitutional decision-making procedures" (COM(2009)0665),

–   having regard to Article 294(3) and Article 194(2) of the Treaty on the Functioning of the European Union,

–   having regard to the opinion of the Economic and Social Committee,

–   having regard to the opinion of the Committee of the Regions,

–   having regard to Rule 55 of its Rules of Procedure,

–   having regard to the report of the Committee on Industry, Research and Energy and the opinions of the Committee on Foreign Affairs, of the Committee on Economic and Monetary Affairs, the Committee on the Environment, Public Health and Food Safety and of the Committee on the Internal Market and Consumer Protection (A7‑0112/2010),

1.  Adopts the position at first reading hereinafter set out;

2.  Calls on the Commission to refer the matter to Parliament again if it intends to amend the proposal substantially or replace it with another text;

3.  Instructs its President to forward its position to the Council, to the Commission and to the national parliaments.

Amendment  1 Proposal for a regulation Recital 2
Text proposed by the Commission	Amendment
(2) Gas consumption in Europe has increased rapidly during the last ten years. With decreasing domestic production, gas imports have increased even more rapidly, thus creating a higher import dependence and the need to address security of supply aspects.	(2) Gas consumption in Europe has increased rapidly during the last ten years. With decreasing domestic production, gas imports have increased even more rapidly, thus creating a higher import dependence and the need to address security of supply aspects. Some Member States, owing to the dominance of natural gas in their energy mix, find themselves in an 'energy island' as a result of high dependency on gas imports from third countries and an absence of infrastructure connections with the rest of the Union.
Amendment  2 Proposal for a regulation Recital 4
Text proposed by the Commission	Amendment
(4) However, under the current measures regarding the security of gas supply that have been taken at Community level, Member States still enjoy a large margin of discretion as to the choice of measures. Where the security of supply of a Member State is threatened, there is a clear risk that measures developed unilaterally by that Member State may jeopardise the proper functioning of the internal gas market. Recent experience has demonstrated the reality of that risk. To allow the internal gas market to function even in the face of a shortage of supply, it is therefore necessary to provide for a more coordinated response to supply crises, both concerning preventive action and the reaction to concrete disruptions of supply.	(4) However, under the current measures regarding the security of gas supply that have been taken at Union level, Member States still enjoy a large margin of discretion as to the choice of measures. Where the security of supply of a Member State is threatened, there is a clear risk that measures developed unilaterally by that Member State may jeopardise the proper functioning of the internal gas market and the security of protected, including vulnerable, customers. Recent experience has demonstrated the reality of that risk. To allow the internal gas market to function even in the face of a shortage of supply, it is therefore necessary to provide for solidarity and coordination in the response to supply crises, both concerning preventive action and the reaction to concrete disruptions of supply.
Justification
It is considered that the concept of costumer protection and solidarity is not fully integrated in this proposal. As this regulation concerns security of gas supply, taking into consideration customer protection and solidarity between Member States is essential for the preparation of the response to disruptions of supply.
Amendment  3 Proposal for a regulation Recital 5
Text proposed by the Commission	Amendment
(5) Gas routes and sources for the Community should support the security of supply of the Community as a whole and its Member States individually. Security of supply will depend in the future on the evolution of the fuel mix, the development of production in the Community and in third countries supplying the Community, investments in storage facilities and in routes within and outside the Community including Liquefied Natural Gas facilities.	(5) The diversification of gas routes and sources for the Union is essential to improving the security of supply of the Union as a whole and its Member States individually. Security of supply will depend in the future on the evolution of the fuel mix, the development of production in the Union and in third countries supplying the Union, investments in storage facilities and in the diversification of routes and sources of supply within and outside the Union including Liquefied Natural Gas facilities. It is therefore necessary to adopt measures that promote such diversification in the long term.
Amendment  4 Proposal for a regulation Recital 5 a (new)
Text proposed by the Commission	Amendment
	(5a) In order to reduce the impact of potential crises triggered by the disruption of gas supplies, the Member States should develop a common strategy for ensuring the diversification of energy sources and gas delivery routes and supply sources. Furthermore, the Commission, with the relevant Union and national level authorities, should take the necessary measures to ensure the rapid completion of the existing projects approved by the Union for the diversification of gas delivery routes and supply sources and contributing significantly to security of supply.
Justification
Amendment  5 Proposal for a regulation Recital 6
Text proposed by the Commission	Amendment
(6) A major disruption of gas supply to the Community can affect all Member States and Contracting Parties of the Energy Community Treaty and lead to severe economic damages across the Community economy. Likewise, the disruption of gas supply can have severe social impacts in particular on vulnerable groups of customers.	(6) A major disruption of gas supply to the Union is liable to impact on the Union's strategic interests and can affect all Member States and Contracting Parties of the Energy Community Treaty and lead to severe economic damage across the Union economy, as well as indirectly affecting subsidiary sectors. Likewise, the disruption of gas supply can have severe social impacts in particular on vulnerable groups of customers.
Amendment  6 Proposal for a regulation Recital 7 a (new)
Text proposed by the Commission	Amendment
	(7a) For the long-term sustainability of the Union gas market it is essential that measures taken to safeguard the security of gas supply do not unduly distort competition or the effective functioning of the internal market.
Amendment  7 Proposal for a regulation Recital 8
Text proposed by the Commission	Amendment
(8) The failure of the largest single gas infrastructure or gas supply source, the so-called N-1 principle, is a realistic scenario. Using the failure of such infrastructure or supply source as a benchmark of what Member States should be able to compensate is a valid starting point for ensuring their security of gas supply.	(8) The failure of the largest single gas infrastructure, the so-called N-1 principle, is a realistic scenario. Using the failure of such infrastructure as a benchmark of what Member States should be able to compensate is a valid starting point for an analysis of the security of gas supply of each Member State.
Justification
The N-1 rule, as defined in the regulation, only concerns infrastructures.
Amendment  8 Proposal for a regulation Recital 9
Text proposed by the Commission	Amendment
(9) Sufficient gas infrastructure within a Member State and across the Community is essential for tackling supply interruptions. Common minimum criteria on security of gas supply should ensure a level playing field for security of gas supply and should create significant incentives to build the necessary infrastructure and to improve the level of preparedness in case of crisis. Demand side measures such as fuel switching may have a valuable role to play in ensuring energy security where they can be applied quickly and reduce demand appreciably to react to a supply disruption.	(9) Sufficient and diversified gas infrastructure in the Member States, particularly in regions that are isolated from sources of energy supply, is essential for tackling supply interruptions. Common minimum criteria on security of gas supply should ensure a level playing field for security of gas supply while taking into account national or regional specificities and should create significant incentives to build the necessary infrastructure and to improve the level of preparedness in case of crisis. Demand side measures such as fuel switching may have a valuable role to play in ensuring energy security where they can be applied quickly and reduce demand appreciably to react to a supply disruption. It should be noted, however, that switching to fossil fuel would result in higher greenhouse gas emissions. The efficient use of energy as a demand-side measure should be further promoted. The environmental impact of the proposed demand and supply-side measures should be taken into due account and preference should be given to measures with the lowest impact on the environment. Any investment in infrastructure should be made with due respect for the environment and the relevant EU legislation.
Amendment  9 Proposal for a regulation Recital 10
Text proposed by the Commission	Amendment
(10) Investments in new gas infrastructure should be strongly promoted. They should enhance the security of gas supply while ensuring the proper functioning of the internal market in natural gas. Where an infrastructure investment is of cross-border nature the Agency for the Cooperation of Energy Regulators established by Regulation (EC) No .../… of the European Parliament and of the Council ("ACER") and the European Network of Transmission System Operators for Gas ("ENTSO-G") should be closely involved in order to take better account of the cross‑border implications.	(10) Investments in new gas infrastructure should be strongly promoted and should be effected only after an appropriate environmental impact assessment. Such new infrastructure should enhance the security of gas supply while ensuring the proper functioning of the internal market in natural gas. Investments should as a matter of fundamental principle be made by undertakings and be based on economic incentives. The integration of gas from renewable energy sources into the gas network infrastructure should be facilitated. Where an infrastructure investment is of cross-border nature the Agency for the Cooperation of Energy Regulators established by Regulation (EC) No 713/2009 of the European Parliament and of the Council1 ("ACER") and the European Network of Transmission System Operators for Gas ("ENTSO-G") should be closely involved in order to take better account of the cross‑border implications. _______________ 1 OJ L 211, 14.8.2009, p.1.
Amendment  10 Proposal for a regulation Recital 10 a (new)
Text proposed by the Commission	Amendment
	(10a) The construction of new cross-border infrastructures necessary to achieve the objective of at least 10% of electricity and gas interconnection capacity by 2010 as requested in the Presidency conclusions of March 2007 should be prioritised.
Amendment  11 Proposal for a regulation Recital 10 b (new)
Text proposed by the Commission	Amendment
	(10b) Where new cross border interconnections are needed or existing ones need to be extended, close cooperation of the Member States concerned, Competent Authorities and, where they are not the Competent Authorities, the regulatory authorities should take place at an early stage.
Justification
Amendment  12 Proposal for a regulation Recital 10 c (new)
Text proposed by the Commission	Amendment
	(10c) It is important to establish prior agreements between the interconnected systems regarding balancing and supply so that, in emergency situations, optimal use of the available interconnections is guaranteed.
Amendment  13 Proposal for a regulation Recital 11
Text proposed by the Commission	Amendment
(11) Different sources of Community funding are available to support Member States to finance the necessary investment in indigenous production and infrastructure, notably loans and guarantees from the European Investment Bank or funding from regional, structural or cohesion funds. The European Investment Bank as well as the Community external instruments such as ENPI, IPA and DCI can also finance actions in third countries in order to improve security of energy supply.	(11) Different sources of Union funding are available to support Member States to finance the necessary investment in production, infrastructure and energy efficiency measures at regional and local level, notably loans and guarantees from the European Investment Bank or funding from regional, structural or cohesion funds.
Justification
Investments in more efficient energy consumption and in alternative energy sources not only make for a reduction in CO2 emissions, but also less dependency on gas imports and reduced investment in crisis responses.
Amendment  14 Proposal for a regulation Recital 12
Text proposed by the Commission	Amendment
(12) This Regulation should enable natural gas undertakings and customers to rely on market mechanisms for as long as possible when coping with disruptions. It should also provide for emergency mechanisms to be used when markets are no longer able to deal adequately with a gas supply disruption. Even in an Emergency, market based instruments should be given priority to mitigate the effects of the supply disruption.	(12) This Regulation should enable natural gas undertakings and customers to rely on market mechanisms for as long as possible when coping with disruptions. It should also provide for emergency mechanisms to be used when markets alone are no longer able to deal adequately with a gas supply disruption. Even in an Emergency, market based instruments should be given priority to mitigate the effects of the supply disruption.
Justification
During the first two crisis stages, the market is fully expected to solve the problem, but during a real crisis/emergency, when market mechanisms alone are insufficient to cope with the crisis, the Member States should be involved. Market based mechanisms and non-market based mechanisms may operate alongside each other in the Emergency phase.
Amendment   15 Proposal for a regulation Recital 12 a (new)
Text proposed by the Commission	Amendment
	(12a) EU investment in infrastructure and renewable production should be backed by efforts on the part of the Member States and the Commission to promote within the EU neighbourhood, in cooperation with third countries, the extension of the principles and norms of the internal market as stipulated in the Energy Charter Treaty. The Commission should consider extending the European Energy Community, comprising the Union and the countries of south-east Europe, to other third countries, as appropriate, and creating new regional energy markets modelled thereon, such as a Euro-Mediterranean energy community, so as to ensure security of supply.
Amendment  16 Proposal for a regulation Recital 13
Text proposed by the Commission	Amendment
(13) Following the adoption of the third internal energy market package, new provisions will apply to the gas sector, creating clear roles and responsibilities for Member States, regulators, transmission system operators and ACER, as well as improving the transparency of the market for the benefit of its well-functioning and the security of supply.	(13) Following the adoption of the third internal energy market package, new provisions will apply to the gas sector, creating clear roles and responsibilities for Member States, regulators, transmission system operators and ACER, as well as improving the transparency of the market to the benefit of its well-functioning, the security of supply and the protection of customers.
Justification
It is considered that the concept of costumer protection and solidarity is not fully integrated in this proposal. As this regulation concerns security of gas supply, taking into consideration customer protection and solidarity between Member States is essential for the preparation of the response to disruptions of supply
Amendment  17 Proposal for a regulation Recital 14
Text proposed by the Commission	Amendment
(14) The completion of the internal gas market and effective competition within that market offer the Community the highest level of security of supply for all Member States, provided that the market is allowed to work fully in case of disruption of supply affecting a part of the Community, whatever the cause of the disruption. To this end, a comprehensive and effective common approach to security of supply is required, particularly through transparent and non-discriminatory policies compatible with the requirements of the market, avoiding market distortions and undermining of market responses to disruptions.	(14) The completion of the internal gas market and effective competition within that market offers the Union the highest level of security of supply for all Member States, provided that the market is allowed to work fully in case of disruption of supply affecting a part of the Union, whatever the cause of the disruption. To this end, a comprehensive and effective common approach to security of supply is required, particularly transparency, solidarity and non-discriminatory policies compatible with the functioning of the internal market, avoiding market distortions and the undermining of market responses to disruptions.
Justification
The amendment clarifies that policies should be compatible with the functioning of the internal market instead of with the ‘requirements’ of the market.
Amendment  18 Proposal for a regulation Recital 15
Text proposed by the Commission	Amendment
(15) The precise definition of the roles and responsibilities of all natural gas undertakings and Competent Authorities is therefore crucial in maintaining the well-functioning of the internal market, particularly in supply disruptions and crisis situations.	(15) Roles and responsibilities should be established in such a way as to ensure that a three-level approach is respected which would first involve the relevant undertakings and industry, then Member States at national or regional level, and then the Union. In the event of a supply disruption, market players should be given sufficient opportunity to respond to the situation by market-based measures such as those listed in Annex II. If the reactions of market players are not adequate, Member States and their Competent Authorities should take measures such as those listed in Annex III to remove or mitigate the effects of the supply disruption. Only if these measures are inadequate should measures be taken at regional or Union level to remove or mitigate the effects of the supply disruption. Regional solutions should be preferred to Union action as far as possible.
Justification
Amendment  19 Proposal for a regulation Recital 16
Text proposed by the Commission	Amendment
(16) Sufficiently harmonised security of supply standards covering at least the situation that occurred in January 2009, taking into account the difference between Member States, should be defined, without imposing unreasonable and disproportionate burdens on natural gas undertakings including new entrants and small undertakings.	(16) Sufficiently harmonised security of supply standards covering at least the situation that occurred in January 2009, taking into account the difference between Member States, should be defined, taking into account public service obligations and customer protection measures as referred to in Article 3 of Directive 2009/73/EC of the European Parliament and of the Council of 13 July 2009 concerning common rules for the internal market in natural gas1 without imposing unreasonable and disproportionate burdens on natural gas undertakings, including new entrants and small undertakings, and on end users.
	_____ 1 OJ L 211, 14.8.2009, p. 94.
Justification
Big end-users have a substantial ability to contribute to addressing emergency situations, i.e. through their switching capabilities. Such potential contribution should equally not be burdened.
Amendment  20 Proposal for a regulation Recital 17
Text proposed by the Commission	Amendment
(17) It is essential for the well-functioning of the market that the necessary investments in indigenous production and infrastructures, such as interconnections, equipment allowing physical bidirectional flows on pipelines, storage, and LNG re-gasification facilities, are made by the natural gas undertakings in time, bearing in mind possible supply disruptions such as the one that occurred in January 2009.	(17) It is essential for the well-functioning of the market that the necessary investments in indigenous production and infrastructures, such as interconnections, in particular those providing access to the EU gas network, equipment allowing physical bidirectional flows on pipelines, storage, and LNG re-gasification facilities, are made by the natural gas undertakings in time, bearing in mind possible supply disruptions such as the one that occurred in January 2009. In the event that the necessary interconnections are not financially viable for the gas undertakings, but have a clear added value in terms of security of gas supply, the Commission should propose appropriate financial incentives in order to ensure that all Member States are physically connected to the EU gas network.
Amendment  21 Proposal for a regulation Recital 18
Text proposed by the Commission	Amendment
(18) It is important that gas supply is maintained, particularly as regards household customers, as well as other protected customers such as schools and hospitals, in cases in which the market cannot continue to supply them. It is essential that the measures to be taken during a crisis are defined in advance of any crisis.	(18) It is important that gas supply is maintained particularly as regards household customers, as well as a limited number of additional customers, especially customers delivering important public services, which can be defined by the Member States concerned, in cases in which the market cannot continue to supply them. It is essential that the measures to be taken during a crisis are defined in advance of any crisis.
Amendment  22 Proposal for a regulation Recital 20
Text proposed by the Commission	Amendment
(20) The security of supply aspects of long-term planning of investments in sufficient cross-border capacities and other infrastructures, ensuring the long-term ability of the system to guarantee security of supply and meet reasonable demands, are addressed by Directive .../…/EC of the European Parliament and of the Council [concerning common rules for the internal market in natural gas and repealing Directive 2003/55/EC]. Meeting the security of supply standards may require a transitional period to allow the necessary investments to be made. The 10-year network development plan drawn up by the ENTSO-G and supervised by ACER is a fundamental tool to identify the required investments needed at Community level.	(20) The security of supply aspects of long-term planning of investments in sufficient cross-border capacities and other infrastructures, ensuring the long-term ability of the system to guarantee security of supply and meet reasonable demands, are addressed by Directive 2009/73/EC. Meeting the security of supply standards may require a transitional period to allow the necessary investments to be made. The 10-year network development plan drawn up by the ENTSO-G and supervised by ACER is a fundamental tool to identify the required investments needed at Union level in order to implement the infrastructure requirements laid down in this Regulation and to undertake a risk assessment at Union level.
Amendment  23 Proposal for a regulation Recital 22
Text proposed by the Commission	Amendment
(22) In order to ensure the highest level of preparedness in case of supply disruption, Emergency Plans should be established by all natural gas undertakings together with the Competent Authorities. Such plans should be mutually consistent. Their content should follow best practices among existing plans and should define clear roles and responsibilities for all concerned natural gas undertakings and Competent Authorities. Joint emergency plans at regional level, should be established where possible and necessary.	(22) In order to ensure the highest level of preparedness in case of supply disruption, Emergency Plans should be established by the Competent Authorities, after consultation of the natural gas undertakings. Such plans should be mutually consistent at national, regional and Union level. Their content should follow best practices among existing plans and should define clear roles and responsibilities for all concerned natural gas undertakings and Competent Authorities. Joint emergency plans at regional level, should be established where possible and necessary.
Justification
The three-level-approach defined in the 2004 Directive to ensure security of supply (I: companies; II: Member States; III: the Commission), is no longer clearly reflected in the draft Regulation. This principle should be reinstated in the draft Regulation. Competent Authorities are responsible for establishing the plans but shall consult natural gas undertakings.
Amendment  24 Proposal for a regulation Recital 23
Text proposed by the Commission	Amendment
(23) To strengthen the solidarity between Member States in the case of a Community Emergency and in particular to support Member States which are exposed to less favourable geographical or geological conditions, Member States should devise specific measures to exercise solidarity, including measures such as commercial agreements between natural gas undertakings, compensation mechanisms, increased gas exports or increased releases from storages. Solidarity measures may be particularly appropriate between Member States for which the Commission recommends the establishment of joint preventive actions plans or emergency plans at regional level.	(23) To strengthen the solidarity between Member States in the case of a Union Emergency and in particular to support Member States which are exposed to less favourable geographical or geological conditions, Member States should devise measures to exercise solidarity. Natural gas undertakings should devise measures such as commercial agreements, which may comprise increased gas exports or increased releases from storages. It is important to encourage the conclusion of prior arrangements between natural gas undertakings. Natural gas undertakings should always be compensated in a fair and equitable manner for any measures they are asked to take in preparation for an emergency situation. Solidarity measures may be particularly appropriate between Member States for which the Commission recommends the establishment of joint preventive actions plans or emergency plans at regional level.
Justification
The three-level-approach defined in the 2004 Directive to ensure security of supply (I: companies; II: Member States; III: the Commission), is no longer clearly reflected in the draft Regulation. This principle should be reinstated in the draft Regulation.
Amendment  25 Proposal for a regulation Recital 30
Text proposed by the Commission	Amendment
(30) Since gas supplies from third countries are central to the security of gas supply of the Community, the Commission should coordinate the actions with regard to third countries, working with producer and transit countries on arrangements to handle crisis situations and to ensure a stable gas flow to the Community. The Commission should be entitled to deploy a task force to monitor gas flows in crisis situations within and, in consultation with the third countries involved, outside the Community and, where a crisis arises due to difficulties in a third country, to assume a mediation and facilitation role.	(30) Since gas supplies from third countries are central to the security of gas supply of the Union, the Commission should coordinate emergency actions with regard to third countries, working with producer and transit countries on arrangements to handle crisis situations and to ensure a stable gas flow to the Union. The Commission should be entitled to request the deployment of a task force to monitor gas flows in crisis situations within and, in consultation with the third countries involved, outside the Union and, where a crisis arises due to difficulties in a third country, to assume a mediation and facilitation role through the Energy Commissioner and the Vice-President of the Commission /High Representative of the Union for Foreign Affairs and Security Policy.
Justification
The High Representative/Vice-president and the Energy Commissioner should be associated at each stage of the implementation of the Regulation. S/he should in particular be responsible for mediation and negotiation with third countries and industry representatives on behalf of the Member States in crisis situation. The Energy Commissioner in particular should coordinate the activities of the Gas Coordination Group that should be consulted in case of crisis situation on an obligatory basis.
Amendment  26 Proposal for a regulation Recital 30 a (new)
Text proposed by the Commission	Amendment
	(30a) Under the terms of this Regulation, the Commission and the Member States should step up their monitoring of the security of gas supplies from third countries. The Commission should coordinate dispute settlement systems with third countries and intensify the energy dialogue, inter alia in the context of the Energy Charter Treaty and the Energy Community Treaty.
Justification
Amendment  27 Proposal for a regulation Recital 30 a (new)
Text proposed by the Commission	Amendment
	(30a) Contracts concerning gas supplies from third countries should not contain provisions violating EU internal market rules, notably restrictions to re-export or clauses that have the same effect as so-called "destination clauses".
Amendment  28 Proposal for a regulation Recital 31 a (new)
Text proposed by the Commission	Amendment
	(31a) The EU institutions should give particular priority to the Nabucco gas pipeline project.
Amendment  29 Proposal for a regulation Article 1
Text proposed by the Commission	Amendment
This Regulation establishes measures aimed at safeguarding the security of gas supply so as to ensure the proper and continuous functioning of the internal market for gas by providing for a clear definition and attribution of responsibilities and for a coordination of the response at the level of the Member States and the Community regarding both preventive action and the reaction to concrete disruptions of supply.	This Regulation establishes measures aimed at safeguarding the security of gas supply by ensuring the proper and continuous functioning of the internal market for gas and establishing exceptional measures to be implemented when the market can no longer deliver the required gas supplies by providing for a clear definition and attribution of responsibilities and for a coordination of the response with transparent procedures at the level of natural gas undertakings, the Member States, the regions concerned, and the Union regarding both preventive action and the reaction to concrete disruptions of supply or serious risks of such disruptions in the spirit of solidarity between the Member States.
Justification
Amendment  30 Proposal for a regulation Article 2 – point 1
Text proposed by the Commission	Amendment
(1) "protected customers" means all household customers already connected to a gas distribution network, and, if the Member State concerned so decides, can also include small and medium-sized enterprises, schools and hospitals provided that they are already connected to a gas distribution network;	(1) "protected customers" means all household customers connected to a gas distribution network;
Justification
Amendment  31 Proposal for a regulation Article 2 – point 2
Text proposed by the Commission	Amendment
(2) “Competent Authority” means the national regulatory authority or national governmental authority designated by the Member States to be responsible for security of gas supply. This is without prejudice to the choice of Member States to allocate certain tasks in this Regulation to other authorities than the Competent Authority. These tasks shall be performed under the supervision of the Competent Authority and shall be specified in the plans referred to in Article 4.	(2) "Competent Authority" means the regulatory authority or national governmental authority designated by each Member State to be responsible for security of gas supply and for enforcing and implementing the measures and Plans set out in this Regulation. This is without prejudice to the choice of Member States to allocate certain tasks in this Regulation to other authorities than the Competent Authority. These tasks shall be performed under the supervision of the Competent Authority and shall be specified in the plans referred to in Article 4.
Justification
Amendment  32 Proposal for a regulation Article 3 – paragraph 1
Text proposed by the Commission	Amendment
1. Security of gas supply is a task of the natural gas undertakings, Competent Authorities of the Member States, the industrial gas customers, and the Commission within their respective areas of responsibility. It requires a high degree of cooperation between them.	1. Security of gas supply and the proper functioning of the internal market are a shared task of the natural gas undertakings, Competent Authorities of the Member States and the Commission within their respective areas of responsibility. This requires a high degree of cooperation between them.
Amendment  33 Proposal for a regulation Article 3 – paragraph 2
Text proposed by the Commission	Amendment
2. Each Member State shall designate a Competent Authority responsible for the implementation of the security of gas supply measures provided in this Regulation. The measures shall include the biennial risk assessment, the establishment of the Preventive Action Plans, the establishment of the Emergency Plan, and the continuous monitoring of security of gas supply at national level. Competent Authorities shall cooperate with each other to prevent a supply disruption and to limit damages in case it occurs.	2. Each Member State shall designate in a transparent manner Competent Authority responsible for the implementation of the security of gas supply measures in line with the provisions of this Regulation. The measures shall include the biennial risk assessment, including geopolitical risks, the establishment of the Preventive Action Plans, the establishment of the Emergency Plan, and the continuous monitoring of security of gas supply at national level. Where the national regulatory authority is not the Competent Authority, the regulatory authority shall be formally involved in development and implementation of those measures. Competent Authorities shall cooperate with each other to prevent a supply disruption and to limit damages in case it occurs.
Amendment  34 Proposal for a regulation Article 3 – paragraph 5
Text proposed by the Commission	Amendment
5. The measures to ensure the security of supply shall be clearly defined, transparent, proportionate, non-discriminatory, verifiable, and shall not unduly distort competition and the effective functioning of the internal market.	5. The measures to ensure the security of supply shall be clearly defined, transparent, proportionate, non-discriminatory, verifiable, and shall not unduly distort competition and the effective functioning of the internal market. The Commission together with the Competent Authority shall ensure that no clauses having the effect of a destination clause exist in contracts for natural gas concluded between Member States or their natural gas undertakings and third countries. This is without prejudice to the competences of competition authorities.
Amendment  35 Proposal for a regulation Article 3 a (new)
Text proposed by the Commission	Amendment
	Article 3a
	Long-term security of supply measures
	1. No later than ...*, the Commission shall, as an element in the development of a long-term supply strategy, present a report on instruments and measures to increase the diversification of gas supply sources for the Union and the routes of supply into the Union. The report shall include proposals to the different Member States concerning activities and measures in order to enhance security of gas supply. In particular, it shall include an assessment of the role of LNG installations and an overview of storage capacities for gas in different Member States shall be added.
	In addition, the report shall make an assessment of existing regional cooperation (as established in Articles 4(3) and 4(4) and in Annex IIIa) and include recommendations for improvement in the joint preventive and emergency action plans. Any regional cooperation for the purpose of the implementation of this Regulation as referred to in Articles 4(3) and 4(4) shall be conducted by the Competent Authorities of the Member States, involving the natural gas undertakings, the regulatory authorities and the industrial consumers and in close cooperation with the Commission. Such regional cooperation shall promote, and must not conflict with, general principles of European solidarity.
	2. The Union shall work together with supply and transit third countries to share best practices in energy efficiency, for example in the framework of existing energy cooperation agreements such as the Energy Charter Treaty.
	_______________ * OJ: one year after the entry into force of this Regulation.
Amendment  36 Proposal for a regulation Article 4 – paragraph 1 – introductory part
Text proposed by the Commission	Amendment
1. By [31 March 2011; 12 months from entry into force] at the latest, the Competent Authority, after consultation of the natural gas undertakings, of the relevant organisations representing the interests of household and industrial customers and of the regulatory authority, where it is not the Competent Authority, shall establish:	1. By [XX month 2011; 12 months from entry into force] at the latest, the Competent Authority, after consultation of the natural gas undertakings, of the relevant organisations representing the interests of household and industrial customers, shall establish:
Amendment  37 Proposal for a regulation Article 4 – paragraph 1 a (new)
Text proposed by the Commission	Amendment
	1a. Where the regulatory authority is not the Competent Authority, it shall be formally involved in the processes of establishing the Preventive Action Plan and the Emergency Plan. The Competent Authority shall take utmost account of the assessments made by the regulatory authority insofar as they refer to network-related regulatory issues in particular concerning the development of the impact assessment regarding the fulfilment of infrastructure standards according to Article 6 with regard to future approval of tariffs and consistency with network development plans.
Amendment  38 Proposal for a regulation Article 4 – paragraph 2
Text proposed by the Commission	Amendment
2. Before adopting those Plans the Competent Authorities shall exchange information and consult each other and the Commission to ensure that their Plans and measures are mutually consistent at the appropriate regional level. These consultations shall cover, as a minimum, interconnections, cross-border supplies, storage across borders and the physical capacity to transport gas in both directions.	2. Before adopting those Plans the Competent Authorities shall exchange information and consult each other and the Commission to ensure that their Plans and measures are mutually consistent at the appropriate regional level. These consultations shall cover, as a minimum, existing and necessary future interconnections, in particular those providing access to the EU gas network, cross-border supplies, access to storage across borders and the physical capacity to transport gas in both directions. The Gas Coordination Group may be consulted by the Commission and shall be informed of their results.
Amendment  39 Proposal for a regulation Article 4 – paragraph 3
Text proposed by the Commission	Amendment
3. During the process mentioned in paragraph 2 the Commission may recommend at which regional level the exchange of information and consultations shall take place. The Commission, after consultation of the European Network of Transmission System Operators for Gas ("ENTSO-G") and the Agency for the Cooperation of Energy Regulators ("ACER"), may also recommend the establishment of a joint Plan at regional level.	3. During the process mentioned in paragraph 2 the Commission may recommend at which regional level the exchange of information and consultations shall take place. The Commission, after consultation of the European Network of Transmission System Operators for Gas ("ENTSO-G") and the Agency for the Cooperation of Energy Regulators ("ACER") and the Gas Coordination Group, may also recommend the establishment of a joint Plan at regional level, defining the regions in the light of the infrastructure relevant to the security of natural gas supply.
Amendment  40 Proposal for a regulation Article 4 – paragraph 4
Text proposed by the Commission	Amendment
4. Member States may also decide to establish joint Plans at regional level, instead of or in addition to separate national Plans.	4. Member States may also decide to establish joint Plans at regional level in addition to separate national Plans. In the case of joint Plans at regional level, the Member States concerned shall adopt and publish the Plans and shall endeavour to conclude intergovernmental agreements in order to formally endorse the regional cooperation.
Amendment  41 Proposal for a regulation Article 4 – paragraph 5
Text proposed by the Commission	Amendment
5. The Competent Authority shall publish its Plans, including amended versions according to paragraph 6, and notify them to the Commission without delay.	5. The Competent Authority, while respecting the confidentiality of sensitive data, shall publish its Plans, including amended versions according to paragraph 6, and shall notify them to the Commission and inform the Gas Coordination Group without delay.
Amendment  42 Proposal for a regulation Article 4 – paragraph 6 – subparagraph 1
Text proposed by the Commission	Amendment
6. Within six months after the notification of the Plans by the Competent Authorities, the Commission shall assess the Plans of all Member States. The Commission shall consult ENTSO-G, ACER, the Gas Coordination Group and other concerned stakeholders on those plans. Where the Commission considers that a Plan is not effective to mitigate the risks as identified in the risk assessment or inconsistent with the risk scenarios or the Plans of other Member States, or that it does not comply with the provisions of this Regulation or other provisions of Community law, it shall require the revision of the Plan.	6. Within six months after the notification of the Plans by the Competent Authorities, the Commission shall assess the Plans of all Member States. The Commission shall consult ENTSO-G, ACER, the Gas Coordination Group and other concerned stakeholders on those plans and duly take into account their opinion. Where the Commission considers that a Plan is not effective to mitigate the risks as identified in the risk assessment or inconsistent with the risk scenarios or the Plans of other Member States, or that it does not comply with the provisions of this Regulation or other provisions of Union law, it shall require the revision of the Plan.
Amendment  43 Proposal for a regulation Article 4 – paragraph 6 a (new)
Text proposed by the Commission	Amendment
	6a. Where Member States have existing public service obligations that relate to security of supply, the Competent Authorities shall publish them not later than 2 months after the entry into force of this Regulation and update as necessary, following adoption of their Preventative and Emergency Plans.
Amendment  44 Proposal for a regulation Article 4 – paragraph 6 b (new)
Text proposed by the Commission	Amendment
	6b. The Competent Authority shall review the Preventive Action Plan and the Emergency Plan every two years on the basis of altered assessments of the risks affecting the security of gas supply referred to in Article 8.
Amendment  45 Proposal for a regulation Article 5 – paragraph 1 – introductory part
Text proposed by the Commission	Amendment
1. The Preventive Action Plan shall contain:	1. The Preventive Action Plan at national and regional level shall contain:
Amendment  46 Proposal for a regulation Article 5 – paragraph 1 – point a
Text proposed by the Commission	Amendment
(a) the measures to fulfil the infrastructure and supply standards, as laid down in Articles 6 and 7; these measures shall include at least the planning to meet the N-1 standard, volumes and capacities needed to supply the protected customers in the defined high demand periods, the demand side measures and obligations imposed on natural gas undertakings and other relevant bodies;	(a) the measures to fulfil the infrastructure and supply standards, as laid down in Articles 6 and 7; these measures shall include at least the planning to meet the N-1 standard and information on the planning to meet volumes and capacities that according to the risk assessment are needed to supply the protected customers in the defined high demand periods, the demand side measures and diversification of sources of supply, obligations imposed on natural gas undertakings and other relevant bodies;
Amendment  47 Proposal for a regulation Article 5 – paragraph 1 – point b
Text proposed by the Commission	Amendment
(b) the risk assessment as laid down in Article 8;	(b) the results of the risk assessment as laid down in Article 8;
Amendment  48 Proposal for a regulation Article 5 – paragraph 1 – point d a (new)
Text proposed by the Commission	Amendment
	(da) where the Member State so decides on the basis of the risk assessment set out in Article 8, a description of obligations to supply customers, other than those defined in Article 2(1), that are connected to the gas distribution network and that deliver important public services such as schools and hospitals. Those obligations must not affect their ability to supply the protected customers in the event of a crisis as defined in Article 7. These additional obligations must not conflict with the principles of European or regional solidarity towards countries with supply problems;
Amendment  49 Proposal for a regulation Article 5 – paragraph 1 – point d b (new)
Text proposed by the Commission	Amendment
	(db) the mechanisms used for cooperation with other Member States for preparing regional preventive action plans.
Amendment  50 Proposal for a regulation Article 5 – paragraph 2
Text proposed by the Commission	Amendment
2. The Preventive Action Plan, in particular the actions to meet the infrastructure standard as laid down in Article 6, shall be based on and consistent with the ten year network development plan to be elaborated by the ENTSO-G.	2. The Preventive Action Plan shall be based on, and consistent with, the ten-year network development plan to be drawn up by the ENTSO-G. In particular, the actions to meet the infrastructure standard as laid down in Article 6 shall be binding on system operators.
Amendment  51 Proposal for a regulation Article 5 – paragraph 3
Text proposed by the Commission	Amendment
3. The Preventive Action Plan shall take into account economic effectiveness, effects on the functioning of the internal energy market and environmental impact.	3. The Preventive Action Plan shall be based primarily on market measures, and shall take into account the economic impact and effectiveness and efficiency of the measures adopted, their effects on the functioning of the internal energy market, the impact on consumers, the environmental impact and relevant international situations and developments, particularly in major supply and transit countries.
Amendment  52 Proposal for a regulation Article 5 – paragraph 4 a (new)
Text proposed by the Commission	Amendment
	4a. The Commission shall develop an EU preventive action plan building on all national and regional plans, identifying possible crisis scenarios and the most efficient measures to mitigate such crisis in order to guarantee efficient coordination of actions during a Union emergency.
Amendment  53 Proposal for a regulation Article 6 – paragraph 1
Text proposed by the Commission	Amendment
1. By [31 March 2014; 3 years after entry into force] at the latest, the Competent Authority shall ensure that in the event of a disruption of the largest gas supply infrastructure, the remaining infrastructure (N-1) has the capacity to deliver the necessary volume of gas to satisfy total gas demand of the calculated area during a period of sixty days of exceptionally high gas demand during the coldest period statistically occurring every twenty years.	1. By [31 March 2014; 3 years after entry into force] at the latest, the Competent Authority shall ensure that in the event of a disruption of the largest gas supply infrastructure, the remaining infrastructure (N-1) has the technical capacity to satisfy total daily gas demand of the calculated area during a day of exceptionally high gas demand statistically occurring once every twenty years.
Amendment  54 Proposal for a regulation Article 6 – paragraph 2
Text proposed by the Commission	Amendment
2. Following the recommendation of the Commission referred to in Article 4(3) or in situation referred to in Article 4(4), the obligation set out in paragraph 1 may be fulfilled at the regional level. The N-1 standard shall also be considered to be fulfilled where the Competent Authority demonstrates in the Preventive Action Plan referred to in Article 5 that a supply disruption may be sufficiently and timely compensated for by demand side measures.	2. Following the recommendation of the Commission referred to in Article 4(3) or in the situation referred to in Article 4(4), the obligation set out in paragraph 1 may be fulfilled at the regional level. The N-1 standard shall also be considered to be fulfilled where the Competent Authority demonstrates in the Preventive Action Plan referred to in Article 5 that a supply disruption may be sufficiently and timely compensated for by appropriate market-based demand side measures.
Amendment  55 Proposal for a regulation Article 6 – paragraph 3
Text proposed by the Commission	Amendment
3. The methodology for calculating the N-1 standard as provided in Annex I shall be used. It should take into consideration the network configuration and actual gas flows as well as the presence of production and storage capacities. The calculated area as referred to in Annex I shall be extended to the appropriate regional level, where necessary.	3. The methodology for calculating the N-1 standard as provided in Annex I shall be used. It should take into consideration the network configuration and actual gas flows as well as the presence of production and storage capacities. The calculated area as referred to in Annex I and defined by the Competent Authority after consultation with the relevant natural gas undertakings shall be extended to the appropriate regional level, where necessary.
Amendment  56 Proposal for a regulation Article 6 – paragraph 3 a (new)
Text proposed by the Commission	Amendment
	3a. The lack of access to the integrated EU gas network and the dependence on one single third country gas supplier shall be considered as non-compliance with the N-1 standard.
Amendment  57 Proposal for a regulation Article 6 – paragraph 4
Text proposed by the Commission	Amendment
4. Each Competent Authority shall report to the Commission without delay any non-compliance with the N-1 standard.	4. Each Competent Authority shall, after consulting the relevant natural gas undertakings, report to the Commission without delay any non-compliance with the N-1 standard.
Amendment  58 Proposal for a regulation Article 6 – paragraph 5
Text proposed by the Commission	Amendment
5. The transmission system operators shall enable permanent physical capacity to transport gas in both directions on all interconnections within two years from the entry into force of this Regulation, except in cases where at the request of a Competent Authority, the Commission decides that the addition of a bi-directional flow capacity would not enhance the security of supply of any Member State. Such decision may be reviewed if circumstances change. The level of the bi-directional flow capacity shall be reached in a cost efficient way and at least take into account the capacity required to meet the supply standard set in Article 7. Within that two year period, the gas transmission system operator shall adapt the functioning of the transmission system as a whole so as to enable bi-directional gas flows.	5. Without prejudice to paragraph 5a, within two years from the entry into force of this Regulation, the transmission system operators and owners shall enable permanent physical capacity to transport gas in both directions on all interconnections, other than for those connecting EU production facilities, to LNG facilities or interconnection points with distribution networks. The level of the bi-directional flow capacity shall be reached in a cost efficient way, with aspects that are not strictly economic, such as security of supply and contribution to the internal market, being taken into account as part of the assessment and at least take into account the capacity required to meet the supply standard set in Article 7. The Competent Authorities and the Commission shall ensure that the assessment of the interconnections is regularly reviewed if circumstances change, in particular through the updating of the national and regional preventive action plans. Where additional investments are required further down the transmission system, paragraph 7 shall also apply to those investments. Within that two year period, the gas transmission system operator shall adapt the functioning of the transmission system as a whole so as to enable bi-directional gas flows.
Amendment  59 Proposal for a regulation Article 6 – paragraph 5 a (new)
Text proposed by the Commission	Amendment
	5a. Competent Authorities may request the Commission to issue a decision to exempt a specific interconnection from the obligation of bi-directional flow under paragraph 5. The Commission may grant the exemption, if enabling bi-directional flow capacity would not significantly enhance the security of supply of any of the Member States concerned, or if the investment costs significantly outweigh the prospective benefits to security of supply in any of those Member States. The Commission shall take utmost account of the results of the risk assessment carried out by the Competent Authority according to Article 8(1). Such decisions may be reviewed if circumstances change.
Amendment  60 Proposal for a regulation Article 6 – paragraph 6
Text proposed by the Commission	Amendment
6. Member States shall ensure that any new transmission infrastructure provides for the security of supply by means of sufficient number of entry and exit points, and contributes to the development of a well connected infrastructure.	6. Member States shall ensure that any new transmission infrastructure provides for the security of supply by means of sufficient number of entry and exit points, and contributes to the development of a well connected infrastructure. They shall also ensure that national entry capacity and transmission networks are capable of adapting the national gas flows to the scenarios of disruptions of gas supply infrastructure identified in the risk assessment, by, inter alia, removing internal bottlenecks.
Amendment  61 Proposal for a regulation Article 6 – paragraph 7
Text proposed by the Commission	Amendment
7. National Regulatory Authorities shall take into account the costs of fulfilling the N-1 standard and the costs of enabling the permanent physical capacity to transport gas in both directions in their approval of tariffs in line with Article 41(8) of Directive […/…EC]. In the case of costs incurred in more than one Member State, the national regulatory authorities of all Member States concerned shall jointly decide on cost allocation. Article 8(1) of Regulation (EC) No …/… shall apply.	7. National Regulatory Authorities shall introduce appropriate incentives and take into account the efficiently incurred costs of fulfilling the N-1 standard and the costs of enabling the permanent physical capacity to transport gas in both directions in their approval of tariffs or their methodologies in a transparent and detailed manner, in line with Article 41(8) of Directive 2009/73/EC. In the case of costs incurred in more than one Member State or in one Member State for the benefit of other Member States, the national regulatory authorities of all Member States concerned shall jointly decide on cost allocation before any investment decision is taken. Any such investment decision shall be subject to approval by the national regulatory authority in relation to its costs and the allocation of such costs among all of the national regulatory authorities concerned. The proportion to which each Member State benefits from the investment with regard to security of supply shall be taken into consideration in relation to the allocation of costs among those Member States. Article 8(1) of Regulation (EC) No 715/2009 shall apply.
Amendment  62 Proposal for a regulation Article 6 – paragraph 7 a (new)
Text proposed by the Commission	Amendment
	7a. With regard to costs incurred in more than one Member State or in one Member State for the benefit of other Member States, the Commission may propose appropriate EU instruments for the financing of interconnections. Such decisions shall be taken on a case-by-case basis, taking into account notably the lack of financial viability of the interconnection and the clear added value in terms of the security of gas supply for one or more of the Member States concerned.
Amendment  63 Proposal for a regulation Article 7 – paragraph 1
Text proposed by the Commission	Amendment
1. The Competent Authority shall take the measures to ensure the gas supply to the protected customers of the Member State in the case of:	1. The Competent Authority shall require that gas supply undertakings take the measures to ensure the gas supply to the protected customers of the Member State in the case of::
a) extremely cold temperatures during a seven days peak period statistically occurring once every twenty years; and	a) extreme temperatures during a seven days peak period statistically occurring once every twenty years; and
b) any period of sixty days of exceptionally high gas demand during the coldest weather periods statistically occurring every twenty years.	b) any period of forty five days of exceptionally high gas demand during the coldest weather periods statistically occurring every twenty years.
Justification
The longest crisis experienced lasted approximately two weeks. In the absence of a sound economic assessment of the cost and benefits to the market, a shorter period of thirty days should be used in the regulation so as to avoid disproportionate costs for customers and hampering the competitiveness of gas as a low carbon fuel. In the last approximately 40 years since the large infrastructure for transmission of natural gas to Europe was built, the only major supply interruption lasted 13 days.
Amendment  64 Proposal for a regulation Article 7 – paragraph 2
Text proposed by the Commission	Amendment
2. The Competent Authority shall take the measures to ensure the gas supply to the protected customers for the period of sixty days also in the event of an Emergency as defined in Article 9(2). The Competent Authority shall endeavour to maintain the supply for the protected customers as long as necessary.	2. The Competent Authority shall require that gas supply undertakings take the appropriate measures to ensure the gas supply to the protected customers for the period of forty five days also in the event of an Emergency as defined in Article 9(2). After forty five days, or under more severe conditions than those defined in paragraph 1, the Competent Authority and gas supply undertakings shall endeavour to maintain as long as possible the supply for the protected customers.
Amendment  65 Proposal for a regulation Article 7 – paragraph 4
Text proposed by the Commission	Amendment
4. The Competent Authority shall allow the natural gas undertakings to meet these criteria on a regional or Community level and shall not require that these standards are met based on infrastructure located only within its territory.	4. The Competent Authorities shall allow the natural gas undertakings to meet these criteria on a regional or Union level and shall not require that these standards are met based on infrastructure located only within its territory.
Amendment  66 Proposal for a regulation Article 7 – paragraph 5 a (new)
Text proposed by the Commission	Amendment
	5a. The production facilities required to maintain supplies (such as power stations, refineries, gas storage facilities) shall be enabled to operate with as little hindrance as possible in order to guarantee supplies of natural gas, electricity and heat. The prescribed limit values may be exceeded to an extent to be determined. Modification of the conditions imposed by water legislation shall be permitted to an extent to be determined. In this context, dangers to the environment shall be avoided.
Amendment  67 Proposal for a regulation Article 8 – paragraph 1 – point b
Text proposed by the Commission	Amendment
b) taking into account all relevant national and regional circumstances;	b) taking into account all relevant national and regional circumstances, including the use of gas to secure supply of electricity and district heating to protected customers and the operations of industries which are particularly sensitive to fluctuations in supply, consumption patterns, interconnectivity to the internal market and safety concerns;
Amendment  68 Proposal for a regulation Article 8 – paragraph 1 a (new)
Text proposed by the Commission	Amendment
	1a. The Commission shall fully assess the risks to the security of gas supply at Union level and adopt and publish a report to be presented to the Competent Authorities, the Gas Coordination Group, ACER, ENTSO-G and to the European Parliament.
Amendment  69 Proposal for a regulation Article 8 – paragraph 1 b (new)
Text proposed by the Commission	Amendment
	1b. In the risk assessment, the Member States may lay down, on the basis of a technical and economic analysis, obligations to supply customers, other than those defined in Article 2(1), that are already connected to the gas distribution network and that deliver important public services such as schools and hospitals. Those obligations must not affect their ability to supply the protected customers in the event of a crisis as defined in Article 7. Those additional obligations must not conflict with the principles of European or regional solidarity towards countries with supply problems.
Amendment  70 Proposal for a regulation Article 8 – paragraph 1 c (new)
Text proposed by the Commission	Amendment
	1c. Following the recommendation of the Commission as referred to in Article 4(3) or in the situation referred to in Article 4(4), the risk assessment shall also be carried out at regional level.
Amendment  71 Proposal for a regulation Article 8 – paragraph 2
Text proposed by the Commission	Amendment
2. The natural gas undertakings, the relevant organisations representing the interests of household and industrial customers and the regulatory authority, where it is not the Competent Authority, shall cooperate and provide all necessary information for the risk assessment.	2. The natural gas undertakings, the relevant organisations representing the interests of household and industrial gas customers and the regulatory authority, where it is not the Competent Authority, shall cooperate with the Competent Authority and provide all necessary information for the risk assessment including geopolitical risks.
Amendment  72 Proposal for a regulation Article 8 – paragraph 3
Text proposed by the Commission	Amendment
3. The risk assessment shall be repeated every two years before 30 September of that year.	3. The risk assessments referred to in paragraphs 1 and 1a shall be repeated every two years before 30 September of that year.
Amendment  73 Proposal for a regulation Article 9 – paragraph 1 – introductory part
Text proposed by the Commission	Amendment
1.The Emergency Plan shall:	1.The national and regional Emergency Plans shall:
Amendment  74 Proposal for a regulation Article 9 – paragraph 1 – point 2
Text proposed by the Commission	Amendment
(2) Define the role and responsibilities of the natural gas undertakings and of the industrial customers, and their interaction with the Competent Authority and where appropriate with the regulatory authority;	(2) Define the role and responsibilities of all relevant market participants, taking account of the different extents to which they are affected in the event of gas supply disruptions, and define their interaction with the Competent Authority and where appropriate with the regulatory authority;
Amendment  75 Proposal for a regulation Article 9 – paragraph 1 – point 3
Text proposed by the Commission	Amendment
(3) Define the role and responsibilities of the Competent Authority;	(3) Define the role and responsibilities of the Competent Authority and of the other authorities to which tasks have been allocated as referred to in point (2) of the second paragraph of Article 2;
Amendment  76 Proposal for a regulation Article 9 – paragraph 1 – point 7
Text proposed by the Commission	Amendment
(7) Identify the contribution of the non-market based measures planned or to be implemented for the Emergency level listed in Annex III and assess the degree to which the use of non-market based measures is necessary to cope with the crisis, assess their effects and define the procedures to implement them;	(7) Identify the contribution and relative merit of the non-market based measures planned or to be implemented for the Emergency level listed in Annex III and assess the degree to which the use of non-market based measures is necessary to cope with the crisis, assess their effects and define the procedures to implement them. Non-market based measures shall be used only in so far as market-based mechanisms alone can no longer ensure supplies to protected customers;
Amendment  77 Proposal for a regulation Article 9 – paragraph 1 – point 8
Text proposed by the Commission	Amendment
(8) Describe the mechanisms used to cooperate with other Member States for each crisis level;	(8) Describe the mechanisms used and the roles of markets participants in relation to cooperation with other Member States for each crisis level;
Amendment  78 Proposal for a regulation Article 9 – paragraph 1 – point 10
Text proposed by the Commission	Amendment
(10) A list of predefined actions to make gas available in the case of an Emergency, including the compensation mechanisms and commercial agreements between the parties involved in such actions. Such actions may involve cross-border agreements between Member States and/or natural gas undertakings.	(10) Establish a list of predefined actions, defined in close cooperation with the market participants, to make gas available in the case of an Emergency, taking into account compensation mechanisms and commercial agreements between the parties involved in such actions. Such actions may involve cross-border agreements between Member States and/or natural gas undertakings.
Amendment  79 Proposal for a regulation Article 9 – paragraph 1 a (new)
Text proposed by the Commission	Amendment
	1a. The Commission shall develop a Union Emergency Plan identifying possible inconsistencies between national and regional plans as well as possible coordination measures to be taken by the Commission during a Union emergency. It shall also describe the mechanisms used to activate mediation with third countries.
Amendment  80 Proposal for a regulation Article 9 – paragraph 2 – point 1
Text proposed by the Commission	Amendment
(1) Early warning level (Early Warning): when there is concrete, serious and reliable information, possibly triggered by an Early Warning Mechanism, that an event may occur which will deteriorate the supply conditions;	(1) Early warning level (Early Warning): when concrete, serious and reliable information, possibly triggered by an Early Warning Mechanism, suggests that supply conditions could deteriorate in the short term. The market is expected to solve the problem without the intervention of the Competent Authority;
Amendment  81 Proposal for a regulation Article 9 – paragraph 2 – point 2
Text proposed by the Commission	Amendment
(2) Alert level (Alert): when a supply disruption or exceptionally high demand occurs but the market is still able to resolve the situation without the intervention of the Competent Authority;	(2) Alert level (Alert): a supply disruption or exceptionally high demand, the scale of which does not yet warrant the declaration of an Emergency under point (3). The market is expected to resolve the problem without the intervention of the Competent Authority;
Amendment  82 Proposal for a regulation Article 9 – paragraph 2 – point 3
Text proposed by the Commission	Amendment
(3) Emergency level (Emergency): when an exceptionally high demand occurs or when there is a disruption of the supply through or from the largest infrastructure or source and there is a credible risk that the supply standard to the protected customers can no longer be met with market based instruments alone.	(3) Emergency level (Emergency): a supply disruption or an exceptionally high demand where market-based mechanisms alone can no longer ensure supplies to protected customers. The Competent Authority is required to intervene within the framework of the Emergency Plan. Market-based mechanisms and non-market-based mechanisms may operate alongside each other in this phase.
Amendment  83 Proposal for a regulation Article 9 – paragraph 3
Text proposed by the Commission	Amendment
3. The Emergency Plan shall ensure that cross-border access to the storage facilities is maintained also in case of emergency. The Emergency Plan shall not introduce any measure unduly restricting the flow of gas across the borders.	3. The Competent Authorities in the Emergency Plan shall ensure that cross-border access to storage facilities is maintained also in case of emergency. The Member States and the Competent Authorities shall not introduce any measure unduly restricting the flow of gas across the borders.
Amendment  84 Proposal for a regulation Article 9 – paragraph 3 a (new)
Text proposed by the Commission	Amendment
	3a. The Emergency Plan shall also identify the necessary measures and actions to be taken to mitigate the impact of a gas supply disruption on the supply of electricity generated from gas and district heating to protected customers.
Amendment  85 Proposal for a regulation Article 9 – paragraph 4
Text proposed by the Commission	Amendment
4. The Competent Authority shall immediately inform the Commission and provide it with all the necessary information when it declares any of the crisis levels. In the event of an emergency which may result in a call for assistance from the EU and its Member States the Competent Authority of the Member State concerned shall without delay notify the Commission’s Civil Protection Monitoring and Information Centre.	4. The Competent Authority shall immediately inform the Commission and provide it with all the necessary information when it declares any of the crisis levels, in particular information on the actions it intends to take. The Competent Authority shall follow the pre-defined actions as defined in its Emergency Plan. In the event of an emergency which may result in a call for assistance from the EU and its Member States the Competent Authority of the Member State concerned shall without delay notify the Commission’s Civil Protection Monitoring and Information Centre. The Commission may convene the Gas Coordination Group.
Amendment  86 Proposal for a regulation Article 9 – paragraph 4 a (new)
Text proposed by the Commission	Amendment
	4a. Where the Commission is notified by the Competent Authority that an early warning level has been declared in a Member State or where a threat of disruption of gas supplies might have a clear geopolitical dimension, the Union, represented at the highest level, shall take appropriate diplomatic actions having regard to the special role given by the Lisbon Treaty to the Vice-President/ High Representative.
Amendment  87 Proposal for a regulation Article 9 – paragraph 5
Text proposed by the Commission	Amendment
5. When the Competent Authority declares an Emergency it shall follow the pre-defined actions as defined in its Emergency Plan and shall immediately inform the Commission in particular of the actions it intends to take according to Article 9(1). The Commission may convene the Gas Coordination Group.	deleted
Amendment  88 Proposal for a regulation Article 9 – paragraph 6
Text proposed by the Commission	Amendment
6. The Commission shall verify within one week whether the declaration of an Emergency is justified and whether it does not impose an undue burden on the natural gas undertakings and on the functioning of the internal market. The Commission may, in particular, ask the Competent Authority to modify measures imposing an undue burden on natural gas undertakings and to lift its declaration of Emergency if the Commission considers it not or no longer justified.	6. The Commission shall verify within three days whether the declaration of an Emergency fulfils the criteria indicated in paragraph 2 and whether it does not impose an undue burden on the natural gas undertakings and on the functioning of the internal market.
Amendment  89 Proposal for a regulation Article 9 – paragraph 6 a (new)
Text proposed by the Commission	Amendment
	6a. If the Competent Authority of the Member State in Emergency decides exceptionally to take measures not provided for in the Plans, the Commission shall verify whether it is justified. The Commission may seek the advice of the Gas Coordination Group on this matter.
Amendment  90 Proposal for a regulation Article 9 – paragraph 6 b (new)
Text proposed by the Commission	Amendment
	6b. The Commission may, in particular, ask the Competent Authority to modify measures imposing an undue burden on natural gas undertakings and to lift its declaration of Emergency if the Commission considers it not or no longer justified.
Amendment  91 Proposal for a regulation Article 9 – paragraph 6 c (new)
Text proposed by the Commission	Amendment
	6c. Non-market based measures imposed on natural gas undertakings in the event of an emergency, including at regional or Union levels, shall ensure fair and equitable compensation in favour of the natural gas undertakings affected by such measures.
Amendment  92 Proposal for a regulation Article 9 – paragraph 6 d (new)
Text proposed by the Commission	Amendment
	6d. The Emergency Plan shall be updated every two years on the basis of the results of the risk assessment referred to in Article 8.
Justification
Amendment  93 Proposal for a regulation Article 10 – paragraph 1
Text proposed by the Commission	Amendment
1. The Commission may declare a Community Emergency at the request of one Competent Authority or when the Community loses more than 10% of its daily gas import from third countries as calculated by ENTSO-G. It shall declare a Community Emergency where more than one Competent Authority has declared Emergency following the verification in accordance with Article 9(6). It may declare a Community Emergency for specifically affected geographical regions comprising more than one Member State.	1. The Commission may declare a Union Emergency at the request of one Competent Authority. It shall declare a Union Emergency where more than one Competent Authority has declared Emergency following the verification in accordance with Article 9(6) or where the Union loses more than 20% of its daily gas import from third countries as calculated by ENTSO-G. It shall declare a Union Emergency for specifically affected geographical regions, defined in accordance with Annex IIIa or Articles 4(3) and 4(4), comprising more than one Member State where one Competent Authority from the concerned region has declared an emergency or where the affected geographical region loses more than 10% of its daily gas import from third countries as calculated by ENTSO-G.
Amendment  94 Proposal for a regulation Article 10 – paragraph 3
Text proposed by the Commission	Amendment
3. In a Community Emergency, the Commission shall coordinate the actions of the Competent Authorities. In particular the Commission shall ensure the exchange of information, ensure the consistency and effectiveness of the actions at Member State and regional level in relation to the Community level, and shall coordinate the actions with regard to third countries. The Commission may convene a crisis management group composed in particular of representatives of the industry and the Member States concerned by the Emergency.	3. In a Union Emergency, the Commission shall coordinate the actions of the Competent Authorities. In particular the Commission shall ensure the exchange of information, ensure the consistency and effectiveness of the actions at Member State and regional level in relation to the Union level, and shall coordinate the actions with regard to third countries through the auspices of the Commission Vice-President/High Representative, and the Energy Commissioner. The Commission shall convene a crisis management group composed in particular of representatives of the industry and the Member States concerned by the Emergency. The Commission shall ensure that the Gas Coordination Group is regularly informed about the work undertaken by the crisis management group.
Amendment  95 Proposal for a regulation Article 10 – paragraph 4
Text proposed by the Commission	Amendment
4. When the Commission considers that in a Community Emergency, an action taken by a Competent Authority or natural gas undertakings is inappropriate to deal with the Emergency, or that it seriously endangers the situation in another Member State, the Commission shall require the Competent Authority or natural gas undertaking to change its action.	4. When the Commission considers that in a Union Emergency, an action taken by a Competent Authority or natural gas undertakings is inappropriate to deal with the Emergency, or that it seriously endangers the situation in another Member State, the Commission shall require the Competent Authority to change its action informing it of the reasons why it considers that the Competent Authority or the natural gas undertaking needs to do so.
Within three days from notification of the Commission's request, the Competent Authority concerned shall change its action and notify the Commission or shall set out to the Commission why it does not agree with the request. In that case, the Commission may amend or withdraw its request.	Within three days from that notification, the Competent Authority concerned shall change its action and notify the Commission or shall send a duly substantiated reply as to why the action in question is justified. In that case, the Commission may amend or withdraw its request.
If, within three days, the Commission decides not to amend or withdraw its request, the Competent Authority shall comply with the Commission's request without delay.	If, within three days, the Commission decides not to amend or withdraw its request, it shall inform the Competent Authority why it considers the justification to be unacceptable. Under such circumstances, the Competent Authority shall comply with the Commission's request without delay. The Commission’s request shall specify the recommended measures to be taken by the Competent Authority aiming at restoring the functioning of the internal gas market.
	The Commission shall keep the Gas Coordination Group informed throughout the process.
Amendment  96 Proposal for a regulation Article 10 – paragraph 5
Text proposed by the Commission	Amendment
5. The Competent Authority or natural gas undertakings shall not introduce any measure restricting the flow of gas within the internal market at any time.	5. The Member States, the Competent Authorities or natural gas undertakings shall not introduce any measure restricting the flow of gas within the internal market at any time.
Amendment  97 Proposal for a regulation Article 10 – paragraph 7
Text proposed by the Commission	Amendment
7. The Commission shall establish a permanent reserve list for a monitoring task force consisting of industry experts and representatives of the Commission. This monitoring task force may be deployed when necessary and shall monitor and report on the gas flows within and outside the Community, in cooperation with the supplying and transiting countries.	7. The Commission, after consulting the Gas Coordination Group, shall establish a permanent reserve list for a monitoring task force consisting of industry experts and representatives of the Commission. This monitoring task force may be deployed when necessary and shall monitor and report on the gas flows within and outside the Union, in cooperation with the supplying and transiting countries.
Amendment  98 Proposal for a regulation Article 11 – paragraph 1
Text proposed by the Commission	Amendment
1. A Gas Coordination Group is established to facilitate the coordination of measures concerning the security of supply. The Group shall be composed of representatives of the Competent Authorities, ACER, ENTSO-G and representative bodies of the industry concerned and relevant customers. The Commission shall decide on the composition of the Group ensuring its representativity and shall chair the Group. The Group shall establish its rules of procedure.	1. A Gas Coordination Group is established to facilitate the coordination of measures concerning the security of supply. The Group shall be composed of representatives of the Competent Authorities, the national regulatory authorities where they are not the Competent Authorities, ACER, ENTSO-G and representative bodies of the industry concerned and relevant customers. The Commission shall decide on the composition of the Group ensuring its representativity and shall chair the Group. The Group shall establish its rules of procedure.
Amendment  99 Proposal for a regulation Article 11 – paragraph 2 – introductory part
Text proposed by the Commission	Amendment
2. The Gas Coordination Group shall assist the Commission in particular on issues related to:	2. In accordance with the provisions of this Regulation, the Gas Coordination Group shall assist the Commission in particular on issues related to:
Amendment  100 Proposal for a regulation Article 11 – paragraph 2 – point g
Text proposed by the Commission	Amendment
(g) implementation of the Plans;	(g) implementation and review of the Preventive and Emergency Plans;
Amendment  101 Proposal for a regulation Article 11 – paragraph 3
Text proposed by the Commission	Amendment
3. The Commission shall convene the Gas Coordination Group on a regular basis.	3. The Commission shall convene the Gas Coordination Group on a regular basis and share the information received by the Competent Authorities whilst ensuring the confidentiality of commercially sensitive information.
	3a. The Gas Coordination Group shall contribute to the definition of the regions in accordance with Articles 4(3) and 4(4).
	In order to achieve solidarity at regional level, the Gas Coordination Group shall create specific sub-groups addressing security of supply issues at regional level.
Amendment  102 Proposal for a regulation Article 12 – paragraph 1 – introductory part
Text proposed by the Commission	Amendment
1. The Competent Authority during the Emergency shall have in particular the following information available on a daily basis:	1. From ...1, the Competent Authority during the Emergency shall have in particular the following information available on a daily basis:
	----------------------------------------------------1 OJ: please insert date: 6 months after entry into force of this Regulation.
Amendment  103 Proposal for a regulation Article 12 – paragraph 1 – point b
Text proposed by the Commission	Amendment
(b) hourly flow of gas at all cross-border entry and exit points as well as all points connecting a production facility to the network, storage, LNG in mcm/d;	(b) hourly flow of gas at all cross-border entry and exit points as well as all points connecting the network to a production facility, storage facility or LNG terminal in mcm/h;
Amendment  104 Proposal for a regulation Article 12 – paragraph 1 – point c
Text proposed by the Commission	Amendment
(c) period, expressed in days, during which it is possible to ensure gas supply to the protected customers.	(c) period, expressed in days, during which it is expected that gas supply to the protected customers can be ensured.
Amendment  105 Proposal for a regulation Article 12 – paragraph 5
Text proposed by the Commission	Amendment
5. After an Emergency, the Competent Authority shall without delay provide to the Commission a detailed assessment of the Emergency and the effectiveness of the implemented measures, including the assessment of economic impact of the Emergency, the impact of the fuel switching on the levels of the emissions, the impact on the electricity sector and the assistance provided to and/or received from the Community and its Member States.	5. After an Emergency, the Competent Authority shall without delay provide to the Commission a detailed assessment of the Emergency and the effectiveness of the implemented measures, including the assessment of economic impact of the Emergency, the impact of the fuel switching on the levels of the emissions, the impact on the electricity sector and the assistance provided to and/or received from the Union and its Member States.
	The Commission shall analyse the assessments of the Competent Authorities and inform the Member States, the European Parliament and the Gas Coordination Group of its results in aggregated form.
Amendment  106 Proposal for a regulation Article 12 – paragraph 6 – point b - introductory part
Text proposed by the Commission	Amendment
b) Natural gas undertakings shall notify the Commission of the following details of the contracts concluded with suppliers from third countries:	b) The Competent Authorities shall notify the Commission of the following details of the contracts concluded by the natural gas undertakings of their respective Member States with suppliers from third countries on an aggregated basis and in a form which delivers the necessary information for the Commission to act:
Amendment  107 Proposal for a regulation Article 12 – paragraph 6 – subparagraph 2 (new)
Text proposed by the Commission	Amendment
	In order to enable the Competent Authority to meet its obligations under this paragraph, the natural gas undertakings shall provide the data referred to in the first subparagraph to the Competent Authority for aggregation.
	The competent authority and the Commission shall ensure the confidentiality of this information.
Amendment  108 Proposal for a regulation Article 13 – paragraph 1
Text proposed by the Commission	Amendment
1. In addition to the monitoring and reporting obligations provided for in Article 5 of the Gas Directive the Competent Authority shall publish and forward to the Commission a report by 31 July each year containing the following data:	1. In addition to the monitoring and reporting obligations provided for in Article 5 of the Gas Directive the Competent Authority shall forward to the Commission a report by 31 July each year containing the following data:
(a) calculation of N-1 indicator and data necessary for such calculation, progress made in investments needed to cope with N-1, country specific difficulties encountered in the implementation new alternative solutions;	(a) calculation of N-1 indicator and data necessary for such calculation;
(b) annual amounts, durations and supply country covered by gas supply import contracts;	(b) on an aggregated basis, annual amounts, durations and supply country covered by gas supply import contracts;
(c) maximal interconnection capacity of each entry and exit points to and from the gas systems;	(c) maximal interconnection capacity of each entry and exit points to and from the gas systems;
(d) the main elements of the relevant intergovernmental agreements concluded with third countries.	(d) the main elements of the relevant intergovernmental agreements concluded with third countries.
Justification
The communication of confidential information may seriously harm the commercial interests of undertakings, undermine the implementation of contracts, lead to market distortions and even be prejudicial to security of supply (notably as regards the necessity to preserve the bargaining power of EU gas suppliers in their negotiations with external producers).
Amendment  109 Proposal for a regulation Article 13 – paragraph 2
Text proposed by the Commission	Amendment
2. The Competent Authorities and the Commission shall ensure the confidentiality of commercially sensitive information.	2. The Competent Authorities and the Commission shall at all times ensure the confidentiality of commercially sensitive information submitted to them in application of this Regulation.
Amendment  110 Proposal for a regulation Article 13 – paragraph 2 a (new)
Text proposed by the Commission	Amendment
	2a. The Commission shall establish a system of continuous monitoring of and reporting on security of gas supply, which shall include the following measures:
	(a) preparation of annual reports concerning observance of the rules governing the internal market in the energy sector, notably as regards transparency and compliance with EU competition law by third-country companies, especially main suppliers, together with all of their subsidiaries;
	(b) assessment of the impact of vertically integrated energy companies from third countries on the internal market and implementation of the principle of reciprocity;
	(c) application of appropriate measures designed to prevent uncontrolled investment by state-owned foreign companies in the Union's energy sector, in particular the gas and electricity transmission networks;
	(d) monitoring of contracts for natural gas concluded between Member States and third countries as regards their conformity with EU internal market rules. The Commission shall enforce the abolition of any clauses having the effect of a destination clause in so far as they are prohibited by EU law.
Amendment  111 Proposal for a regulation Article 14
Text proposed by the Commission	Amendment
Monitoring	Monitoring by the European Commission
	The Commission shall carry out continuous monitoring and reporting of security of gas supply measures, including monitoring of contracts for gas supply concluded between Member States and third countries, in order to ensure that comply with the rules of the EU internal market, security of supply and competition law.
By […] the Commission, having assessed the notified Plans and after consulting the Gas Coordination Group, shall draw conclusions as to possible means to enhance security of supply at Community level and shall report to the European Parliament and the Council on the implementation of this Regulation. The report shall include, where appropriate, recommendations for improvement of this Regulation.	By […] the Commission, having assessed the notified Plans and after consulting the Gas Coordination Group, shall draw conclusions as to possible means to enhance security of supply at Union level and shall report to the European Parliament and the Council on the implementation of this Regulation. In order to enable Member States lacking infrastructure to reach N-1 standard, the Commission shall monitor the achievements on market interconnectivity and, after consulting the Gas Coordination Group, propose possible instruments to improve the market. The report shall include, where appropriate, recommendations for improvement of this Regulation.
Amendment  112 Proposal for a regulation Article 14 a (new)
Text proposed by the Commission	Amendment
	Article 14a
	Nabucco gas pipeline project
	The EU institutions shall give particular priority to the Nabucco gas pipeline project as regards its political profile and financing.
Justification
In a regulation that concerns the security of gas supply, diversification of gas supply should play an important part. In this context, the Nabucco pipeline could offer an alternative to the current sources of gas to the European Union.
Amendment  113 Proposal for a regulation Annex I
Text proposed by the Commission ANNEX I: CALCULATION OF THE N-1 INDICATOR   1. Calculation of the N-1 indicator   The N-1 indicator describes the ability of the gas infrastructure's capacity[1] to supply the gas for maximal demand in the calculated area in case of disruption of the largest infrastructure.   "Calculated area" means a geographical area for which the application of the N-1 indicator is calculated.   Technical capacity[2] of all remaining available gas supply infrastructure in the event of disruption of the largest infrastructure should be at least equal to the total gas demand of the calculated area during a period of sixty days of exceptionally high gas demand during the coldest period statistically occurring every twenty years.   The N-1 indicator, calculated as below, should be at least equal to 100%.   .IPm+Pm+Sm+LNGm – Im -Tout N-1[%] = --------------------------------------------- * 100, N-1 ≥ 100% .Dmax   Definitions required for the calculation of the N-1 indicator:   Supply-side definitions   IPm – Maximal technical capacity of import pipelines (mcm/d) means a sum of maximal technical capacity of gas pipelines supplying gas to the calculated area.   Pm – Maximal production capacity (mcm/d) means the sum of maximal possible rates of production in the calculated area from all gas production facilities taking into account critical elements like field recovery;   Sm – Crisis deliverability (mcm/d) means the maximal rate of withdrawal of all storages in the calculated area which is possible to maintain during each of the sixty days of the disruption period. This rate could be established by a combination of the withdrawal rates of various types of all storages of the calculated area used during the sixty days period.   LNGm – Maximal LNG facility capacity (mcm/d) means the sum of maximal possible capacities at all LNG terminals for the liquefaction of natural gas or the importation, offloading, ancillary services, temporary storage and re-gasification of LNG, taking into account critical elements like maximal ships and storage capacities availability and technical send-out capacity to the system, providing gas in a 60 days period to the calculated area.   Im – Capacity of the largest gas infrastructure (mcm/d), which supplies the calculated area with the highest share of gas.   Where the calculated area provides a transmission capacity from more than one pipeline or entry point and it is not the largest infrastructure (Ipm ≠ Im), the remaining transmission capacity of the calculated area also needs to be subtracted in the numerator.   Tout – Transmission outflow capacity (mcm/d) is the sum of remaining technical capacity for transmission of gas via the calculated area in the event of disruption of the largest infrastructure.   Demand calculation   Dmax – means a capacity to supply the relevant daily gas demand of the calculated area which is related to the coldest day with exceptionally high gas demand statistically occurring every twenty years. Amendment ANNEX I: CALCULATION OF THE N-1 FORMULA   1. Definition of the N-1 formula   The N-1 formula describes the ability of the gas infrastructure's technical capacity[3] to satisfy total gas demand in the calculated area in case of disruption of the single largest gas infrastructure during a day of exceptionally high gas demand statistically occurring once every twenty years.   Gas infrastructure includes the natural gas transmission network as well as production, LNG and storage facilities connected to the calculated area.   The technical capacity[4] of all remaining available gas infrastructure in the event of disruption of the single largest gas infrastructure should be at least equal to the sum of the total daily gas demand of the calculated area during a day of exceptionally high demand statistically occurring once every twenty years.   The results of the N‑1 formula, as calculated below, should at least equal 100%.     2. Calculation method of the N-1 formula       3. Definitions of the parameters of the N-1 formula:   "Calculated area" means a geographical area for which the N-1 formula is calculated. The calculated area can refer to the national or regional level.     Demand-side definitions   Dmax – means the total daily gas demand (in mcm/d) of the calculated area during a day of exceptionally high demand statistically occurring once every twenty years.     Supply-side definitions EPm – Technical capacity of entry points (in mcm/d) means the sum of the technical capacity, including reversible capacity, of all entry points capable of supplying gas to the calculated area;   Pm – Maximal production capability (in mcm/d) means the sum of the maximal daily production capability of all gas production facilities to the entry points in the calculated area;   Sm – Crisis deliverability (in mcm/d) means the sum of the maximum daily withdrawal capacity of all storage facilities in the calculated area, taking into account their respective physical characteristics;   LNGm – Maximal LNG facility capacity (in mcm/d) means the sum of the maximal technical daily send-out capacities at all LNG facilities in the calculated area, taking into account critical elements like offloading, ancillary services, temporary storage and re-gasification of LNG as well as technical send-out capacity to the system;   Im – Technical capacity of the largest gas infrastructure (in mcm/d) with the single highest capacity to supply the calculated area.
Amendment  114 Proposal for a regulation Annex II – introductory part
Text proposed by the Commission	Amendment
In developing the Preventive and Emergency Plans the Competent Authority shall take into account the following indicative and non-exhaustive list of measures:	In developing the Preventive and Emergency Plans the Competent Authority shall take into account the indicative and non-exhaustive list of measures set out in this Annex. The Competent Authority shall take into due account the environmental impact of the proposed measures when developing the Preventive and Emergency Plans and shall give preference, to the greatest possible extent, to those measures which have the least impact on the environment.
Amendment  115 Proposal for a regulation Annex II – title 'Supply side' – bullet 2 a (new)
Text proposed by the Commission	Amendment
	· Facilitating the integration of gas from renewable energy sources into the gas network infrastructure
Amendment  116 Proposal for a regulation Annex II – list 2 "Supply side" – bullet 10 a (new)
Text proposed by the Commission	Amendment
	• UGS (commercial and strategic)
Justification
The current draft regulation focuses the security of supply through two different ways: Infrastructure Standard (N-1) and Supply Standard. Infrastructures, Supply and Demand measures are adequate tools to face security of supply.
Amendment  117 Proposal for a regulation Annex III a (new)
Text proposed by the Commission	Amendment
	ANNEX IIIa
	REGIONAL COOPERATION
	In accordance with Article 194 TFEU and as underlined in Article 6 of Directive 2009/73/EC and Article 12 of Regulation (EC) No 715/2009, regional cooperation is a major expression of the principle of solidarity and is also an underlying concept of this Regulation. Regional cooperation is required in particular for the establishment of the risk assessment (Article 8), the Preventive and Emergency Action Plans (Articles 4, 5 and 9), the infrastructure and supply standards (Articles 6 and 7) and the provisions for the Union and regional emergency responses (Article 10).
	The regional cooperation under this Regulation builds on existing regional cooperation involving natural gas undertakings, Member States and national regulatory authorities to enhance, among other objectives, the security of supply and the integration of the internal energy market, such as the three Regional gas markets under the Gas Regional Initiative, the Gas Platform of the Pentalateral Forum, the High Level Group of the Baltic Energy Market and Interconnection Plan, the Security of Supply Coordination Group of the Energy Community. However, the specific security of supply requirements are likely to foster new cooperation frameworks, and existing areas of cooperation will have to be adapted in order to guarantee the best efficiency.
	In the light of the increasingly interconnected and interdependent markets and the completion of the internal gas market, cooperation of the following countries, among others, can enhance their individual and collective security of gas supply:
	- Poland and the three Baltic States,
	- the Iberian Peninsula (Spain, Portugal) and France,
	- Ireland and United Kingdom,
	- Bulgaria, Greece, Romania,
	- Denmark and Sweden,
	- Slovenia, Italy, Austria, Hungary, Romania,
	- Poland and Germany,
	- France, Germany, Belgium, Netherlands and Luxembourg already organised under the Pentalateral Forum,
	- others.
	The regional cooperation among them shall be extended to strengthen cooperation with neighbouring countries, [.] in particular in the case of energy islands, notably with a view to enhancing interconnections. Member States may also be part of different cooperation clusters
	The various actors referred to in Article 3 shall cooperate at regional level within their respective areas of activities and competence. For the purpose of this Regulation, the regional cooperation is initiated and formally established by the Competent Authorities of the Member States, having consulted the Commission which shall inform the Gas Coordination Group. The operational results of this regional cooperation, such as a joint Preventive Action Plan and/or a joint Emergency Plan, will be subject to formal adoption and publication and continuous monitoring by the Competent Authorities concerned. The Commission shall be consulted and shall inform the Gas Coordination Group.

• [1]  Draft Regulation (EC) No …/… of the European Parliament and of the Council on conditions for access to the natural gas transmission networks and repealing Regulation (EC) No 1775/2005 Article 2(18) "technical capacity" means the maximum firm capacity that the transmission system operator can offer to the network users, taking account of system integrity and the operational requirements of the transmission network
• [2]  
• [3]  ^{Regulation (EC) No 715/2009 of the European Parliament and of the Council on conditions for access to the natural gas transmission networks and repealing Regulation (EC) No 1775/2005 Article 2(18) "technical capacity" means the maximum firm capacity that the transmission system operator can offer to the network users, taking account of system integrity and the operational requirements of the transmission network.}
• [4]  

EXPLANATORY STATEMENT

I. Introduction

A complete set of European policy measures, mainly stemming from the Communication on an "Energy Policy for Europe" in January 2007[1], constitutes a response to the challenge of security of energy supply. In the gas sector, in addition to the Directive 2004/67/EC, a whole regulatory framework concerning infrastructures and interconnections indirectly contributes to this aim through (i) guidelines on Trans-European energy networks ('TEN-E projects')[2], (ii) the so-called '3rd energy package on internal electricity and gas market' adopted in June 2009. The legislative measures adopted for the integration of the gas market, by laying down rules concerning third party access to gas storages and liquefied natural gas facilities and transparency about gas reserves[3], will contribute to foster energy security. In the same way, the Parliament considered that promotion of regional solidarity, development of gas interconnections through a 10 years network development plan as well as a strong process of harmonisation of network access conditions through the cooperation of transport system operators were key points in the legislative package[4].

The international aspects of security of energy supply were also tackled through resolutions[5] emphasising the need to further develop a common energy strategy for Europe that incorporates producers, distributors and consumers, to speak with "one single voice" and to create a transparent and sustainable energy system that enhances the regional diversity of energy supplies. The development of an 'EU Energy security and solidarity action plan', including revision of crisis responses mechanisms, was also highly encouraged by the Parliament.

In this context, the rapporteur welcomes the proposal for a regulation on security of gas supply repealing Directive 2004/67/EC as it is a piece of legislation that gives a true answer to a real problem that the Union is facing. This became obvious during the gas crisis between Russia and Ukraine in the last winter when millions of European citizens and our economy suffered greatly. In this sense, the European Parliament, through the above-mentioned resolutions has asked for such an initiative and the rapporteur is convinced that Members will make a significant contribution in the coming months.

He firmly believes that a full and speedy implementation of such a regulation, along with the legislation on the internal energy market, will reduce significantly the EU's vulnerability to external supply disruptions but it will also strengthen the leading role of European gas companies in the world and the Union's geo-political position as a strategic global player.

II. Main points identified by the rapporteur

1. Issues addressed in the draft report

The rapporteur considers that several points in the proposal for a regulation should be improved and has therefore proposed some amendments in the following areas:

a. The Role of companies

While the recitals and impact assessment make very clear that there are three steps for addressing a crisis (1. market, 2. Member States, 3 Community) the role of the undertakings seems to vanish into the legal text therefore it should be reinforced in the text in several areas, in particular, with regards to the role of the Gas Coordination Group and in the three levels of alert article.

b. Reverse flows

The current text proposes that all interconnectors should be equipped with reverse flow capacity. The rapporteur believes that this provision goes too far both economically or in terms of security of supply. There is no point, for example, in having reverse flows in the interconnectors with supplying countries. The Competent Authorities at national level and the Gas Coordination Group, at EU level, should determine those interconnectors where reverse flow capacity would be cost-efficient and represent an added value for security of supply in times of crisis.

c. Preventive and emergency plans

The rapporteur believes that, like Member States, the Commission should also develop preventive and emergency plans at EU level in order to best manage the situations where a Community emergency is declared.

d. Community Emergency

The current text establishes a 10% decrease in supply of imports as the threshold to declare automatically a Community Emergency. However, the Rapporteur believes that this threshold does not cover many scenarios where a Member State might have a crisis of 100% gas disruption yet not reach the 10% at EU level. For this reason, he has reinforced the provisions in the article concerning the possibility of declaring a community emergency for a defined geographical area. This should entail some Community solidarity mechanism, although to be implemented at regional level.

e. Cost-sharing for new transnational investments in infrastructures

Most of the Members have raised their concern regarding the costs of building or upgrading new infrastructures. This is particularly important as the implementation of this regulation will in many situations involve the construction in one Member States for the benefit of other Member States. The third internal energy market package already foresees mechanisms for the specific subject of cross-border interconnections. In this regard, the Rapporteur believes that these mechanisms could also be used for other type of infrastructures such as reverse flows. He explicitly includes a reference to the principle of proportionality in cost-sharing in relation to the benefits of security of supply.

f. Non-market measures

The Rapporteur has expressed on several occasions his desire to make more explicit the limits for Member States to intervene in the market. While he acknowledges that it is only under extreme circumstances that these measures can take place, there can be short or medium term consequences in the proper functioning of the market if they were enforced by the competent authorities. He has therefore underlined in the relevant parts of the text that non-market mechanisms should only be used as a last resort.

g. Exchange of information

The Rapporteur is a firm believer that in order to take the adequate measures in a time of emergency all relevant authorities, whether national or at Community level, should have the necessary data. However, commercially sensitive information has to be handled with extreme caution since any leak could create serious problems for gas undertakings both inside and outside the Union. For this reason, he proposes that these data should be centralised at national level and transmitted to the Commission by the competent authorities in an aggregated form.

h. Role of the electricity sector

The rapporteur acknowledges that in countries where households are mainly supplied by electricity generated through gas, concrete actions should be taken to ensure that during a crisis the protected customers do not suffer a blackout. In this sense, he includes this element for the elaboration of the risk assessments and the emergency plans.

i. Other issues

The rapporteur proposes a new Article on long term security of gas supply measures where the Commission should bring forward a report on possible ways to diversify, at Community level, the geographical sources and the routes into the EU as well as assessing fully the role of LNG installations. He also reinforces parts of the text with references to the importance of achieving increased interconnection capacity between Member States.

He also believes that the current text only provides for preventive actions for a limited scope of scenarios and that it should allow for more flexibility in the case the form of the crisis varies in length or intensity.

2. Issues not addressed in the draft report at this stage of the procedure

The Rapporteur has purposely decided not to address two particular issues in the draft report as he believes an in depth debate with Members should still take place due to their complexity. However, he wishes to explain what he intends to achieve in the final text on these matters.

a. Definition of "protected customers"

The current definition in the text is at the same time too vague and too narrow. Too vague because the possibility to include any SME connected to the gas network opens the door to the inclusion in this category of sectors that should not be considered essential during a crisis. And it is too narrow as it only lists "schools and hospitals" as possible exceptions but not other essential services such as fire stations, for example. The rapporteur believes that since this definition is crucial in determining the levels of supply standard as established in Art. 7 the text should allow for some flexibility for Member States to adjust to their national circumstances with clearly defined criteria. In this sense, he thinks it is imperative that the final text agreed in Parliament delimits the possible inclusions in this category to specific sectors or actors that are essential to ensure, for example, national security and public health. If we were to introduce a limited list of sectors we might run the risk of leaving out important ones, so a clearly defined list of criteria would be much more appropriate.

b. The infrastructure standard (N-1)

The rapporteur thinks that this is a highly technical issue that is not yet clear. Many stakeholders from very different backgrounds have raised serious doubts about the effectiveness of the N-1 standard as it stands in the Commission's text. As this is one of the main mechanisms in the regulation, he wishes to study this with more time in order to make a solid proposal through amendments that would make the N-1 standard as reliable as possible.

The rapporteur is of the opinion that the N-1 standard should be the main element of subsidiarity in the regulation in order to allow for all national circumstances to be reflected. Indeed, one country might not have a good "N-1 score" but at the same time a supply disruption of gas would have little impact in its energy market or mix since it is not very dependent on gas. Member States should be given flexibility when deciding how to face a gas supply crisis, whether by increasing the gas infrastructure or by developing further their indigenous production of energy. These are just two examples of how they could do it. He is fully supportive of the idea of the standard but believes that Members will need more time to examine the details of this important aspect of the regulation.

• [1]  COM(2007)001
• [2]  Decision 1364/2006, OJ L 262, 22.09.2006, p. 1-23
• [3]  Directive 2009/73/EC of 13 July 2009 concerning common rules for the internal market in natural gas and repealing Directive 2003/55/EC, OJ L 211, 14.08.2009, p.94 OJ L 211, 14.08.2009, p.36
• [4]  Regulation (EC) No 715/2009 on conditions for access to the natural gas transmission networks and repealing Regulation (EC) No 1775/2005, OJ L 211, 14.08.2009, p.36
• [5]  EP resolution of 3 February 2009 on the Second Strategic Energy Review (2008/2239(INI)), T6-038/2009
  EP resolution of 17 September 2009 on External aspects of energy security, T7-0021/2009

OPINION of the Committee on Foreign Affairs (2.2.2010)

for the Committee on Industry, Research and Energy

on the proposal for a regulation of the European Parliament and of the Council concerning measures to safeguard security of gas supply and repealing Directive 2004/67/EC
(COM(2009)0363 – C7‑0097/2009 – 2009/0108(COD))

Rapporteur: Jacek Saryusz-Wolski

SHORT JUSTIFICATION

In recent years, EU Member States have experienced repeated gas supply disruptions. The Russia-Ukraine gas dispute of January 2009 demonstrated once again that the EU's growing dependence on external energy supplies, largely from undemocratic and unstable countries, may harm the long-term economic and political interests of the Member States. The EU's energy vulnerability requires the application of a comprehensive policy on energy that combines internal aspects and external dimensions.

Energy security must be regarded as an essential component of the overall security of the European Union. Therefore, ensuring the safeguarding of the gas supply into the Community in particular during crisis situations is a strategic objective. In this regard, establishing national plans in advance, containing preventative and urgency measures is to be welcomed as long as these plans are coordinated at Community level. In the medium-term, the presence of a large internal competitive market equipped with highly developed interconnections and infrastructures shall be considered as the most effective protection against supply disruption.

However, EU energy security policy should enable the Union not only to react to crisis situations but also to anticipate them. Therefore, all measures ensuring a proper functioning of the internal energy market should be complemented with proactive energy diplomacy aimed at strengthening cooperation with major producer, transit and consumer countries in the spirit of reciprocity.

The Rapporteur for the opinion of the Committee on Foreign Affairs welcomes the Proposal for a Regulation repealing Directive 2004/67/EC. The Rapporteur however, considers that improvements should be made in order to meet the need for a comprehensive approach on EU energy security. He proposes amendments along the following lines:

-    The Proposal shall be considered in light of the new legal environment provided by the Lisbon Treaty which in its article 176 A stipulates "Union policy on energy shall aim, in the spirit of solidarity between Member States, to ensure security of energy supply in the Union". The Rapporteur considers this solidarity to be vital for the building of a common EU policy on energy and believes that it should be developed both internally and externally at political level in dialogue with third countries during and outside supply crisis situations.

-    The responsibility for security of gas supplies should also be ensured at Community level. Preventative and Emergency Community Plans should therefore be prepared by the European Commission on the basis of national plans. Furthermore, the Commission has a special responsibility to monitor the application of the rules governing the internal market in the energy sector by third-country companies.

-    The High Representative/Vice-president should be associated at each stage of the implementation of the Regulation. S/he should in particular be responsible for mediation and negotiation with third countries on behalf of the Member States in crisis situations.

-    To prevent unexpected supply disruptions, the European Union should establish, together with its supply and transit countries, an early warning mechanism backed by clear political guarantees. Any future trade, association and partnership and cooperation agreements between the EU and supply or transit countries should include an "energy security clause" laying down a code of conduct and outlining measures to be taken in an emergency situation.

-    The Commission should consider extending the European Energy Community based on the provisions of the Energy Charter to third countries and creating new regional energy markets, as well as actively pursuing its support for the setting-up of an integrated Euro-Mediterranean energy market.

-    Any strategy on the security of energy supply in the medium and long term will require a greater diversification of suppliers, supply sources and supply routes. This strategy should involve third countries concerned, in particular those covered by the European Neighbourhood Policy. Community investments should be focused, as a priority, on critical infrastructures which could contribute to safeguarding the security of supply.

AMENDMENTS

The Committee on Foreign Affairs calls on the Committee on Industry, Research and Energy, as the Committee responsible, to incorporate the following amendments in its report:

Amendment  1 Proposal for a regulation Recital 2
Text proposed by the Commission	Amendment
(2) Gas consumption in Europe has increased rapidly during the last ten years. With decreasing domestic production, gas imports have increased even more rapidly, thus creating a higher import dependence and the need to address security of supply aspects.	(2) Gas consumption in Europe has increased rapidly during the last ten years. With decreasing domestic production, gas imports have increased even more rapidly, thus creating a higher import dependence and the need to address security of supply aspects. Some Member States, owing to the domination of natural gas in the energy mix, find themselves in an 'energy island' when it comes to high dependency on gas imports from third countries and an absence of infrastructure connections with the rest of the EU.
Amendment  2 Proposal for a regulation Recital 4 a (new)
Text proposed by the Commission	Amendment
	(4a) Recognising the central role played by international cooperation in ensuring security of gas supply for the citizens of the EU Member States, all relevant EU policies and Action Plans must be based on the principle of mutual respect with the third countries involved; a resolution of any problems that may arise should be sought through political dialogue and negotiations.
Amendment  3 Proposal for a regulation Recital 11
Text proposed by the Commission	Amendment
(11) Different sources of Community funding are available to support Member States to finance the necessary investment in indigenous production and infrastructure, notably loans and guarantees from the European Investment Bank or funding from regional, structural or cohesion funds. The European Investment Bank as well as the Community external instruments such as ENPI, IPA and DCI can also finance actions in third countries in order to improve security of energy supply.	(11) Different sources of Community funding are available to support Member States to finance the necessary investment in indigenous production and infrastructure, notably loans and guarantees from the European Investment Bank ("EIB") and the European Bank for Reconstruction and Development ("EBRD") or funding from regional, structural or cohesion funds. The EIB, the EBRD and the Community external instruments such as ENPI, IPA and DCI can also finance actions in third countries (particularly the countries covered by the European Neighbourhood Policy) in order to improve security of energy supply.
Amendment   4 Proposal for a regulation Recital 12 a (new)
Text proposed by the Commission	Amendment
	(12a) EU investment in infrastructure and renewable production should be backed by efforts on the part of the Member States and the Commission to promote within the EU neighbourhood, in cooperation with third countries, the extension of the principles and norms of the internal market as stipulated in the Energy Charter Treaty. The Commission should consider extending the European Energy Community, comprising the EU and the countries of south-eastern Europe, to other third countries, as appropriate, and creating new regional energy markets modelled thereon, such as a Euro-Mediterranean energy community, so as to ensure security of supply.
Amendment  5 Proposal for a regulation Recital 23
Text proposed by the Commission	Amendment
(23) To strengthen the solidarity between Member States in the case of a Community Emergency and in particular to support Member States which are exposed to less favourable geographical or geological conditions, Member States should devise specific measures to exercise solidarity, including measures such as commercial agreements between natural gas undertakings, compensation mechanisms, increased gas exports or increased releases from storages. Solidarity measures may be particularly appropriate between Member States for which the Commission recommends the establishment of joint preventive actions plans or emergency plans at regional level.	(23) To strengthen the solidarity between Member States in the case of a Community Emergency and in particular to support Member States which are exposed to less favourable geographical, geopolitical or geological conditions, Member States should devise specific measures to exercise solidarity as stipulated in the Lisbon Treaty, including measures such as commercial agreements between natural gas undertakings, compensation mechanisms, the building of technical junctions, increased gas exports or increased releases from storages. Solidarity measures may be particularly appropriate between Member States for which the Commission recommends the establishment of joint preventive action plans or emergency plans at regional level.
Amendment  6 Proposal for a regulation Recital 30
Text proposed by the Commission	Amendment
(30) Since gas supplies from third countries are central to the security of gas supply of the Community, the Commission should coordinate the actions with regard to third countries, working with producer and transit countries on arrangements to handle crisis situations and to ensure a stable gas flow to the Community. The Commission should be entitled to deploy a task force to monitor gas flows in crisis situations within and, in consultation with the third countries involved, outside the Community and, where a crisis arises due to difficulties in a third country, to assume a mediation and facilitation role.	(30) Since gas supplies from third countries are central to the security of gas supply of the Community, the Commission should include an "energy security clause" in trade, association, and partnership and cooperation agreements with producer and transit countries. This "energy security clause" should stipulate measures to prevent supply crises or to help to overcome them. The Commission shall coordinate the actions with regard to third countries, working with producer and transit countries on arrangements to handle crisis situations and to ensure a stable gas flow to the Community as a whole and to each Member State affected by a crisis situation. The Commission should be entitled to deploy a task force to monitor gas flows in crisis situations within and, in consultation with the third countries involved, outside the Community and, where a crisis arises due to difficulties in a third country, to assume a mediation and facilitation role through the Vice-President of the Commission/High Representative of the Union for Foreign Affairs and Security Policy, in close cooperation with the holders of the relevant portfolios within the college of Commissioners.
Amendment  7 Proposal for a regulation Article 1
Text proposed by the Commission	Amendment
This Regulation establishes measures aimed at safeguarding the security of gas supply so as to ensure the proper and continuous functioning of the internal market for gas by providing for a clear definition and attribution of responsibilities and for a coordination of the response at the level of the Member States and the Community regarding both preventive action and the reaction to concrete disruptions of supply.	This Regulation establishes measures aimed at safeguarding the security of gas supply so as to ensure the proper and continuous functioning of the internal market for gas, and at establishing exceptional measures to be implemented when the market can no longer deliver the required gas supply, by providing for a clear definition and attribution of responsibilities and for a coordination of the response at the level of the Member States and the Community regarding both preventive action and the reaction to concrete disruptions of supply or to serious threats to the gas supply, having regard to the principle of solidarity between Member States.
Amendment  8 Proposal for a regulation Article 3 – paragraph 2
Text proposed by the Commission	Amendment
2. Each Member State shall designate a Competent Authority responsible for the implementation of the security of gas supply measures provided in this Regulation. The measures shall include the biennial risk assessment, the establishment of the Preventive Action Plans, the establishment of the Emergency Plan, and the continuous monitoring of security of gas supply at national level. Competent Authorities shall cooperate with each other to prevent a supply disruption and to limit damages in case it occurs.	2. Each Member State shall designate a Competent Authority responsible for the implementation of the security of gas supply measures provided in this Regulation. The measures shall include the biennial risk assessment, including the assessment of geopolitical risks, the establishment of the Preventive Action Plans, the establishment of the Emergency Plan, and the continuous monitoring of security of gas supply at national level. Competent Authorities shall cooperate with each other to prevent a supply disruption and to limit damage in case it occurs.
Amendment  9 Proposal for a regulation Article 3 – paragraph 4 a (new)
Text proposed by the Commission	Amendment
	4a. The Commission shall implement the measures provided for in this Regulation. The measures shall include the biennial risk assessment, the continuous monitoring of security of gas supply and the establishment of Preventive and Emergency Action Plans at Community level.
Amendment  10 Proposal for a regulation Article 3 a (new)
Text proposed by the Commission	Amendment
	Article 3a
	Long-term security of supply measures
	1. Under the terms of this Regulation and having regard to Article 194 of the Treaty on the Functioning of the European Union, the Commission and the Member States shall step up their monitoring of the security of gas supplies from third countries and shall propose specific emergency measures in the event of any disruption of supply. The Commission shall coordinate dispute settlement systems with third countries and intensify the energy dialogue, inter alia in the context of the Energy Charter and the Energy Community.
	2. The Commission shall prepare the basis for an Early Warning Mechanism in the gas sector to be established by bilateral agreements between the EU and third countries. This mechanism shall provide for an early evaluation of potential risks related to the supply and demand of natural gas as well as the prevention of, and rapid reaction to, an emergency situation or to any threat of such a situation.
	3. At the latest one year after the entry into force of this Regulation, the Commission shall present a report containing proposed regulatory measures that could be implemented in order to diversify, at Community level, the geographical sources of gas and the routes of supply into the EU. The report shall include an assessment of the role of LNG installations which could help in the diversification of energy supply. An overview of the gas storage capacities of the different Member States should also be given.
Amendment  11 Proposal for a regulation Article 4 –heading
Text proposed by the Commission	Amendment
Establishment of Preventive Action Plan and Emergency Plan	Establishment of Preventive Action Plan and Emergency Plan at national, Community and regional level
Amendment  12 Proposal for a regulation Article 4 – paragraph 2
Text proposed by the Commission	Amendment
2. Before adopting those Plans the Competent Authorities shall exchange information and consult each other and the Commission to ensure that their Plans and measures are mutually consistent at the appropriate regional level. These consultations shall cover, as a minimum, interconnections, cross-border supplies, storage across borders and the physical capacity to transport gas in both directions.	2. Before adopting those Plans the Competent Authorities shall exchange information and consult each other and the Commission to ensure that their Plans and measures are mutually consistent at the appropriate regional and Community level. These consultations shall cover, as a minimum, interconnections, cross-border supplies, storage across borders and the physical capacity to transport gas in both directions, as well as trans-regional, trans-border gas supply systems and their designated storage facilities, platforms and equipment.
Amendment  13 Proposal for a regulation Article 4 – paragraph 6 a (new)
Text proposed by the Commission	Amendment
	6a. By ...* at the latest, the Commission shall establish a Community Preventive Action Plan and a Community Emergency Plan containing the measures to be taken at the Community level.
	___________ *30 September 2011 or 18 months from entry into force
Amendment  14 Proposal for a regulation Article 5 – paragraph 3
Text proposed by the Commission	Amendment
3. The Preventive Action Plan shall take into account economic effectiveness, effects on the functioning of the internal energy market and environmental impact.	3. The Preventive Action Plan shall take into account cost efficiency, economic effectiveness, effects on the functioning of the internal energy market, environmental impact and all relevant international developments, particularly in major supply and transit countries.
Amendment  15 Proposal for a regulation Article 6 – paragraph 7
Text proposed by the Commission	Amendment
7. National Regulatory Authorities shall take into account the costs of fulfilling the N-1 standard and the costs of enabling the permanent physical capacity to transport gas in both directions in their approval of tariffs in line with Article 41(8) of Directive […/…EC]. In the case of costs incurred in more than one Member State, the national regulatory authorities of all Member States concerned shall jointly decide on cost allocation. Article 8(1) of Regulation (EC) No …/… shall apply.	7. National Regulatory Authorities shall duly take into account the costs of fulfilling the N-1 standard and the costs of enabling the permanent physical capacity to transport gas in both directions in their approval of tariffs, in a transparent and detailed manner, reflecting costs incurred in a clear and identifiable way and in line with Article 41(8) of Directive […/…EC]. In the case of costs incurred in more than one Member State, the national regulatory authorities of all Member States concerned and ACER shall jointly decide on cost allocation. Article 8(1) of Regulation (EC) No …/… shall apply.
Justification
Costs incurred to implement security of supply and infrastructure standards shall be fed into national and crossborder tariffs in the most transparent and clear manner. Cost should be fairly allocated between the systems implementing those measures and the ones benefiting from them.
Amendment  16 Proposal for a regulation Article 8 – paragraph 1 – point b
Text proposed by the Commission	Amendment
b) taking into account all relevant national and regional circumstances;	b) taking into account all relevant national, regional and international circumstances;
Amendment  17 Proposal for a regulation Article 8 – paragraph 2
Text proposed by the Commission	Amendment
2. The natural gas undertakings, the relevant organisations representing the interests of household and industrial customers and the regulatory authority, where it is not the Competent Authority, shall cooperate and provide all necessary information for the risk assessment.	2. The natural gas undertakings, the relevant organisations representing the interests of household and industrial customers and the regulatory authority, where it is not the Competent Authority, shall cooperate and provide all necessary information for the risk assessment, including geopolitical risks.
Amendment  18 Proposal for a regulation Article 8 – paragraph 3
Text proposed by the Commission	Amendment
3. The risk assessment shall be repeated every two years before 30 September of that year.	3. The risk assessment shall be repeated every two years before 30 September of that year. The Community assessment shall be revised in the event of a significant and unexpected risk.
Amendment  19 Proposal for a regulation Article 9 – paragraph 1 – point 8 a (new)
Text proposed by the Commission	Amendment
	(8a) Describe the mechanisms used to activate the mediation with the third countries concerned;
Amendment  20 Proposal for a regulation Article 9 – paragraph 2 – point 3
Text proposed by the Commission	Amendment
(3) Emergency level (Emergency): when an exceptionally high demand occurs or when there is a disruption of the supply through or from the largest infrastructure or source and there is a credible risk that the supply standard to the protected customers can no longer be met with market based instruments alone.	(3) Emergency level (Emergency): when an exceptionally high demand occurs or when there is a disruption of the supply through or from the largest infrastructure or source or there is a credible risk that the supply standard to the protected customers can no longer be met with market based instruments alone.
Amendment  21 Proposal for a regulation Article 9 – paragraph 4 a (new)
Text proposed by the Commission	Amendment
	4a. Where the Commission is notified by the Competent Authority that an early warning level has been declared in a Member State for geopolitical reasons, or where a threat of disruption of gas supplies due to geopolitical reasons is signalled, possibly by the Early Warning Mechanism, the Community, represented by the Vice-President of the Commission/High Representative of the Union for Foreign Affairs and Security Policy, shall take appropriate diplomatic actions. Actions taken by the Vice-President/High Representative must not affect the functioning of the internal market.
Justification
It is necessary that a relevant diplomatic action vis a vis third countries that are suppliers of gas or transit countries is taken at the earliest possible stage, when there is a threat of disruption of gas supplies because of geopolitical reasons. These actions must not affect the functioning of the internal market.
Amendment  22 Proposal for a regulation Article 9 – paragraph 6
Text proposed by the Commission	Amendment
6. The Commission shall verify within one week whether the declaration of an Emergency is justified and whether it does not impose an undue burden on the natural gas undertakings and on the functioning of the internal market. The Commission may, in particular, ask the Competent Authority to modify measures imposing an undue burden on natural gas undertakings and to lift its declaration of Emergency if the Commission considers it not or no longer justified.	6. The Commission shall verify within three days whether the declaration of an Emergency fulfils the criteria indicated in paragraph 2 and whether it does not impose an undue burden on the natural gas undertakings and on the functioning of the internal market. The Commission may, in particular, ask the Competent Authority to modify measures imposing an undue burden on natural gas undertakings and to lift its declaration of Emergency if the Commission considers it not or no longer justified.
Amendment  23 Proposal for a regulation Article 10 – paragraph 1
Text proposed by the Commission	Amendment
1. The Commission may declare a Community Emergency at the request of one Competent Authority or when the Community loses more than 10% of its daily gas import from third countries as calculated by ENTSO-G. It shall declare a Community Emergency where more than one Competent Authority has declared Emergency following the verification in accordance with Article 9(6). It may declare a Community Emergency for specifically affected geographical regions comprising more than one Member State.	1. The Commission shall declare a Community Emergency at the request of one Competent Authority or when the Community loses a substantial amount of its daily gas import from third countries as calculated by ENTSO-G. It shall declare a Community Emergency where more than one Competent Authority has declared Emergency following the verification in accordance with Article 9(6). It shall declare a Community Emergency for specifically affected geographical regions comprising more than one Member State.
Amendment  24 Proposal for a regulation Article 10 – paragraph 3
Text proposed by the Commission	Amendment
3. In a Community Emergency, the Commission shall coordinate the actions of the Competent Authorities. In particular the Commission shall ensure the exchange of information, ensure the consistency and effectiveness of the actions at Member State and regional level in relation to the Community level, and shall coordinate the actions with regard to third countries. The Commission may convene a crisis management group composed in particular of representatives of the industry and the Member States concerned by the Emergency.	3. In a Community Emergency, the Commission shall coordinate the actions of the Competent Authorities. In particular the Commission shall ensure the exchange of information, ensure the consistency and effectiveness of the actions at Member State and regional level in relation to the Community level, and shall coordinate the actions with regard to third countries through the Vice-President of the Commission/High Representative. The Commission may convene a crisis management group composed in particular of representatives of the industry and the Member States concerned by the Emergency.
Amendment  25 Proposal for a regulation Article 10 – paragraph 7
Text proposed by the Commission	Amendment
7. The Commission shall establish a permanent reserve list for a monitoring task force consisting of industry experts and representatives of the Commission. This monitoring task force may be deployed when necessary and shall monitor and report on the gas flows within and outside the Community, in cooperation with the supplying and transiting countries.	7. The Commission shall establish a permanent reserve list for a monitoring task force consisting of industry experts, representatives of the Commission and members of the staff of the Vice-President of the Commission/High Representative. This monitoring task force may be deployed when necessary and shall monitor and report on the gas flows within and outside the Community, in cooperation with the supplying and transiting countries.
Amendment  26 Proposal for a regulation Article 12 – paragraph 6 – point a
Text proposed by the Commission	Amendment
a) Member States shall submit to the Commission the existing inter-governmental agreements concluded with third countries which have an impact on the development of gas infrastructures and supplies; before concluding new inter-governmental agreements, the Member States shall inform the Commission to assess their compliance with the internal market legislation;	a) Member States shall submit to the Commission the existing inter-governmental agreements concluded with third countries which have an impact on the development of gas infrastructures and supplies; before concluding new inter-governmental agreements, the Member States shall inform and consult the Commission to assess their compliance with the internal market legislation as well as their national and Community energy security implications, including the protection of critical energy infrastructure and geopolitical risks;
Amendment  27 Proposal for a regulation Article 13 – paragraph 2 a (new)
Text proposed by the Commission	Amendment
	2a. The Commission shall establish a system of continuous monitoring and reporting of security of gas supply including the following measures:   (a) preparation of annual reports concerning the observance of the rules governing the internal market in the energy sector, notably as regards transparency and compliance with EU competition law by third-country companies, especially main suppliers, together with all of their subsidiaries;   (b) assessment of the impact on the internal market of vertically integrated energy companies from third countries and implementation of the principle of reciprocity;   (c) application of appropriate measures designed to prevent uncontrolled investment by state-owned foreign companies in the EU's energy sector, in particular the gas and electricity transmission networks;   (d) monitoring of contracts for natural gas concluded between Member States and third countries as regards their conformity with the rules of the EU internal market. The Commission shall enforce the abolition of any clauses having the effect of a destination clause in so far as they are prohibited by EU law.

PROCEDURE

Title	Security of gas supply
References	COM(2009)0363 – C7-0097/2009 – 2009/0108(COD)
Committee responsible	ITRE
Opinion by        Date announced in plenary	AFET 11.11.2009
Rapporteur        Date appointed	Jacek Saryusz-Wolski 21.10.2009
Discussed in committee	26.1.2010
Date adopted	27.1.2010
Result of final vote	+: –: 0:	47 4 1
Members present for the final vote	Gabriele Albertini, Sir Robert Atkins, Frieda Brepoels, Elmar Brok, Arnaud Danjean, Michael Gahler, Marietta Giannakou, Takis Hadjigeorgiou, Heidi Hautala, Richard Howitt, Anna Ibrisagic, Jelko Kacin, Ioannis Kasoulides, Tunne Kelam, Maria Eleni Koppa, Eduard Kukan, Ryszard Antoni Legutko, Krzysztof Lisek, Sabine Lösing, Willy Meyer, Francisco José Millán Mon, Alexander Mirsky, Annemie Neyts-Uyttebroeck, Norica Nicolai, Kristiina Ojuland, Ria Oomen-Ruijten, Alojz Peterle, Mirosław Piotrowski, Bernd Posselt, Cristian Dan Preda, Libor Rouček, José Ignacio Salafranca Sánchez-Neyra, Nikolaos Salavrakos, Jacek Saryusz-Wolski, Werner Schulz, Ernst Strasser, Hannes Swoboda, Zoran Thaler, Johannes Cornelis van Baalen, Geoffrey Van Orden, Kristian Vigenin, Graham Watson
Substitute(s) present for the final vote	Marije Cornelissen, Lorenzo Fontana, Jaromír Kohlíček, Georgios Koumoutsakos, Godelieve Quisthoudt-Rowohl, Marietje Schaake, György Schöpflin, Alf Svensson, Konrad Szymański, Ivo Vajgl

OPINION of the Committee on Economic and Monetary Affairs (29.1.2010)

to the Committee on Industry, Research and Energy

on the proposal for a Regulation of the European Parliament and of the Council concerning measures to safeguard security of gas supply and repealing Directive 2004/67/ΕC
(COM(2009)0363 – C7‑0097/2009 – 2009/0108(COD))

Rapporteur: Nikolaos Chountis

SHORT JUSTIFICATION

The Commission proposes a regulation concerning measures to safeguard natural gas supplies, repealing Directive 2004/67/EC, which is no longer considered adequate to the task of dealing with the issue of natural gas within the European Union, given the growing dependence of Member States on gas imports, the increased supply risk arising from transit through third countries and increasing gas flows, coupled with the development of the internal market.

In its proposal for a regulation the Commission is seeking to define clearly the roles of the gas industry, the Member States and the Community institutions in dealing with short-term and long-term disruptions of gas supplies. The Commission considered a regulation preferable to a directive, since the provisions thereof can be applied directly and promptly by the Member State authorities and natural gas undertakings and it ensures clarity and coherence across the Community of the standards and obligations contained therein.

The main objective of the proposal is to ‘increase the security of gas supply by creating the incentives to invest in necessary interconnections to meet the N-1 indicator, as well as the reverse flows’. The Commission defines the N-1 indicator as the ‘technical capacity of all remaining available gas supply infrastructure in the event of disruption of the largest infrastructure (which) should be at least equal to total gas demand of the calculated area during a period of sixty days of exceptionally high gas demand during the coldest period statistically occurring every twenty years.’

The proposal for a regulation places emphasis on (a) a need to ensure that gas undertakings are able to supply their customers across the entire Community for as long as possible and without restrictions at national level, (b) the possibility of recourse to non-market based measures decided by the competent authority in emergency situations when all market based measures are exhausted and (c) the stronger role given to the Commission in ensuring smooth functioning of the internal market.

The rapporteur welcomes the Commission’s initiative in seeking a regulation to safeguard the security of gas supply in the European Union, particularly following the recent dispute between Russia and Ukraine which created serious problems in ensuring adequate gas supplies for the Member States. He also considers that concerted action at Community level to safeguard gas supplies is a step in the right direction.

The rapporteur also takes the view that the Competent Authority should be given responsibility for the security of natural gas supplies while questioning the major role to be played by private, natural gas suppliers in periods of crisis, particularly with regard to their pricing policies.

He accordingly expresses concern regarding the extent to which the proposal for a regulation embodies the measures necessary to prevent speculative pricing by natural gas suppliers in periods of crisis.

AMENDMENTS

The Committee on Economic and Monetary Affairs calls on the Committee on Industry, Research and Energy, as the committee responsible, to incorporate the following amendments in its report:

Amendment  1 Proposal for a regulation Recital 7 a (new)
Text proposed by the Commission	Amendment
	(7a) For the long-term sustainability of the EU gas market it is essential that measures taken to safeguard the security of gas supply do not unduly distort competition or the effective functioning of the internal market.
Amendment  2 Proposal for a regulation Recital 23
Text proposed by the Commission	Amendment
(23) To strengthen the solidarity between Member States in the case of a Community Emergency and in particular to support Member States which are exposed to less favourable geographical or geological conditions, Member States should devise specific measures to exercise solidarity, including measures such as commercial agreements between natural gas undertakings, compensation mechanisms, increased gas exports or increased releases from storages. Solidarity measures may be particularly appropriate between Member States for which the Commission recommends the establishment of joint preventive actions plans or emergency plans at regional level.	(23) To strengthen the solidarity between Member States in the case of a Union Emergency and in particular to support Member States which are exposed to less favourable geographical or geological conditions, Member States should devise specific measures to exercise solidarity, as provided for in the Treaty on the Functioning of the European Union, including measures such as commercial agreements between natural gas undertakings, compensation mechanisms, increased gas exports or increased releases from storages. Solidarity measures may be particularly appropriate between Member States for which the Commission recommends the establishment of joint preventive actions plans or emergency plans at regional level.
Justification
On December 1st the Lisbon Treaty has entered into force and the EU is now operating on a new legal basis. Therefore it is necessary to recall that the article 176 A of the Lisbon Treaty states: "Union policy on energy shall aim, in the spirit of solidarity between Member States, to ensure security of energy supply in the Union".
Amendment  3 Proposal for a regulation Recital 31 a (new)
Text proposed by the Commission	Amendment
	(31a) The institutions of the European Union should give particular priority to the Nabucco gas pipeline project.
Amendment  4 Proposal for a regulation Article 1
Text proposed by the Commission	Amendment
This Regulation establishes measures aimed at safeguarding the security of gas supply so as to ensure the proper and continuous functioning of the internal market for gas by providing for a clear definition and attribution of responsibilities and for a coordination of the response at the level of the Member States and the Community regarding both preventive action and the reaction to concrete disruptions of supply.	This Regulation establishes measures aimed at safeguarding the security of gas supply so as to ensure the proper and continuous functioning of the internal market for gas, and exceptional measures to be implemented where the market cannot deliver the required gas supply, by providing for a clear definition and attribution of responsibilities and for a coordination of the response at the level of the Member States and the Union regarding both preventive action and the reaction to concrete disruptions of supply in a spirit of solidarity between the Member States.
Justification
On December 1st the Lisbon Treaty has entered into force and the EU is now operating on a new legal basis. Therefore it is necessary to recall that the article 176 A of the Lisbon Treaty states: "Union policy on energy shall aim, in the spirit of solidarity between member States, to ensure security of energy supply in the Union".
Amendment  5 Proposal for a regulation Article 2 – paragraph 1 – point 1
Text proposed by the Commission	Amendment
(1) "protected customers" means all household customers already connected to a gas distribution network, and, if the Member State concerned so decides, can also include small and medium-sized enterprises, schools and hospitals provided that they are already connected to a gas distribution network;	(1) "protected customers" means all household customers already connected to a gas distribution network, and, if the Member State concerned so decides, after a risk and impact assessment has been carried out by the Member State in accordance with Article 8, taking into account technical feasibility and a cost-benefit analysis, may also include small and medium-sized enterprises, schools and hospitals provided that they are already connected to a gas distribution network;
Justification
Household consumers,” as protected customers, should continue to be supplied during a gas crisis. If a Member States decides to go beyond the household consumers as protected customers, such a decision should, however, be based on a sound impact assessment also evaluating costs and benefits to the market, as such an extended definition may create significant costs to be borne by final customers.
Amendment  6 Proposal for a regulation Article 3 – paragraph 1
Text proposed by the Commission	Amendment
1. Security of gas supply is a task of the natural gas undertakings, Competent Authorities of the Member States, the industrial gas customers, and the Commission within their respective areas of responsibility. It requires a high degree of cooperation between them.	1. Security of gas supply is a task of the natural gas undertakings, Competent Authorities of the Member States, the industrial gas customers, and the Commission within their respective areas of responsibility. A high degree of cooperation between them is required, and transparency and efficient exchange of information is essential.
Justification
As the gas supply issue is a politicised issue, we need a unified approach to this within the EU.
Amendment  7 Proposal for a regulation Article 4 – paragraph 1 – introductory part
Text proposed by the Commission	Amendment
1. By [31 March 2011; 12 months from entry into force] at the latest, the Competent Authority, after consultation of the natural gas undertakings, of the relevant organisations representing the interests of household and industrial customers and of the regulatory authority, where it is not the Competent Authority, shall establish:	1. By ...*, on the basis of the risk and impact assessment carried out in accordance with Article 8, the Competent Authority, after consultation of the natural gas undertakings, of the relevant organisations representing the interests of household and industrial customers and of the regulatory authority, where it is not the Competent Authority, shall establish:
	* OJ please insert date: 12 months from the entry into force of this Regulation.
Justification
A risk and impact assessment shall be carried out by each Member State when preparing preventive action and emergency plans based on a common EU methodology, allowing the Member State to take into account particular national circumstances where appropriate.
Amendment  8 Proposal for a regulation Article 4 – paragraph 3
Text proposed by the Commission	Amendment
3. During the process mentioned in paragraph 2 the Commission may recommend at which regional level the exchange of information and consultations shall take place. The Commission, after consultation of the European Network of Transmission System Operators for Gas ("ENTSO-G") and the Agency for the Cooperation of Energy Regulators ("ACER"), may also recommend the establishment of a joint Plan at regional level.	3. During the process mentioned in paragraph 2 the Commission may recommend at which regional level the exchange of information and consultations shall take place. The Commission, after consulting the European Network of Transmission System Operators for Gas ("ENTSO-G"), the Agency for the Cooperation of Energy Regulators ("ACER") and the Gas Coordination Group, may also recommend the establishment of a joint plan at regional level.
Amendment  9 Proposal for a regulation Article 4 – paragraph 6 – subparagraph 1
Text proposed by the Commission	Amendment
6. Within six months after the notification of the Plans by the Competent Authorities, the Commission shall assess the Plans of all Member States. The Commission shall consult ENTSO-G, ACER, the Gas Coordination Group and other concerned stakeholders on those plans. Where the Commission considers that a Plan is not effective to mitigate the risks as identified in the risk assessment or inconsistent with the risk scenarios or the Plans of other Member States, or that it does not comply with the provisions of this Regulation or other provisions of Community law, it shall require the revision of the Plan.	6. Within six months after the notification of the plans by the Competent Authorities, the Commission shall assess the plans of all Member States and all joint regional plans. The Commission shall consult ENTSO-G, ACER, the Gas Coordination Group and other concerned stakeholders on those plans. Where the Commission considers that a plan is not effective to mitigate the risks as identified in the risk assessment or inconsistent with the risk scenarios or the plans of other Member States or other regional plans, or that it does not comply with the provisions of this Regulation or other provisions of European Union law, it shall require the revision of the plan.
Amendment  10 Proposal for a regulation Article 5 – paragraph 3
Text proposed by the Commission	Amendment
3. The Preventive Action Plan shall take into account economic effectiveness, effects on the functioning of the internal energy market and environmental impact.	3. The Preventive Action Plan shall take into account cost efficiency, economic effectiveness, fair competition, effects on the functioning of the internal energy market and environmental impact.
Justification
Cost efficiency notion better defines that Preventive Action Plan should take into account reaching the target at the lowest cost.
Amendment   11 Proposal for a regulation Article 6 – paragraph 1
Text proposed by the Commission	Amendment
1. By [31 March 2014; 3 years after entry into force] at the latest, the Competent Authority shall ensure that in the event of a disruption of the largest gas supply infrastructure, the remaining infrastructure (N-1) has the capacity to deliver the necessary volume of gas to satisfy total gas demand of the calculated area during a period of sixty days of exceptionally high gas demand during the coldest period statistically occurring every twenty years.	1. By ...*, the Competent Authority shall ensure that in the event of a disruption of flows at the largest gas transmission entry point the available infrastructure (N-1) has the capacity to deliver the necessary volume of gas to satisfy gas demand of the protected customers in the calculated area during a day of exceptionally high gas demand during the coldest period statistically occurring every twenty years.
	* OJ please insert date: 6 years after the entry into force of this Regulation.
Justification
The deadline of 3 years proposed in the draft regulation is unrealistic. Significant investments in new infrastructure to meet N-1, as will have to be carried out in particular in Central and South-Eastern European countries, require at least 5 to 6 years, depending on their scope. Article 6 paragraph 1 will generate huge investment needs in new capacities and as a result increasing prices for final customers, if not restricted to the absolutely necessary. In order to be consistent with the supply standard in Article 7, the N-1 rule should reflect the gas demand of the protected customers only.
Amendment  12 Proposal for a regulation Article 6 – paragraph 5
Text proposed by the Commission	Amendment
5. The transmission system operators shall enable permanent physical capacity to transport gas in both directions on all interconnections within two years from the entry into force of this Regulation, except in cases where at the request of a Competent Authority, the Commission decides that the addition of a bi-directional flow capacity would not enhance the security of supply of any Member State. Such decision may be reviewed if circumstances change. The level of the bi-directional flow capacity shall be reached in a cost efficient way and at least take into account the capacity required to meet the supply standard set in Article 7. Within that two year period, the gas transmission system operator shall adapt the functioning of the transmission system as a whole so as to enable bi-directional gas flows.	5. If necessary in the light of the risk and impact assessment carried out in accordance with Article 8, taking into account technical feasibility and a cost-benefit analysis, the transmission system operators shall, by ...*, enable permanent physical capacity to transport gas in both directions on those interconnections where the addition of a bi-directional flow capacity would enhance the security of supply, in particular during an emergency. The assessment may be reviewed if circumstances change. Within that three-year period, the gas transmission system operator shall, in accordance with the risk and impact assessment carried out in accordance with Article 8, taking into account technical feasibility and a cost-benefit analysis, adapt the functioning of the transmission system as a whole so as to enable bi-directional gas flows.
	* OJ please insert date: three years from the date of entry into force of this Regulation.
Justification
Imposing permanent physical capacity to transport gas in both directions on all interconnections should not be required without first assessing whether it is technically and/or economically possible or appropriate in individual circumstances. A prior risk and impact assessment is required in order to avoid unnecessary costs to be borne by the final customers.
The two year period to enable permanent physical capacity can only be met if small modifications of infrastructure are required. Larger modifications, e.g. the installation of a new compression unit, will take longer.
Amendment  13 Proposal for a regulation Article 7 – paragraph 1 – introductory part
Text proposed by the Commission	Amendment
1. The Competent Authority shall take the measures to ensure the gas supply to the protected customers of the Member State in the case of:	1. The Competent Authority shall require supply undertakings to ensure the gas supply to the protected customers of the Member State in the case of:
Justification
It should be a primary obligation of the supply undertakings to ensure supply standards. The supply standard causes additional costs to be borne by the protected customers. The period to be covered by the supply standard should not be longer than absolutely necessary to avoid disproportionate costs and hampering of the competitiveness of gas as a low carbon fuel. In the last approx. 40 years since the large infrastructure for transmission of natural gas to Europe was built, the only major supply interruption lasted 13 days. A period of thirty days for the supply standard would therefore be more than sufficient to cover all eventualities and would decrease costs significantly. A thirty day period also seems long enough to restore gas supplies or implement additional measures, such as supplies via reverse flows.
Amendment  14 Proposal for a regulation Article 7 – paragraph 1 – point b
Text proposed by the Commission	Amendment
b) any period of sixty days of exceptionally high gas demand during the coldest weather periods statistically occurring every twenty years.	b) any period of thirty days of exceptionally high gas demand during the coldest weather periods statistically occurring every twenty years.
Justification
It should be a primary obligation of the supply undertakings to ensure supply standards. The supply standard causes additional costs to be borne by the protected customers. The period to be covered by the supply standard should not be longer than absolutely necessary to avoid disproportionate costs and hampering of the competitiveness of gas as a low carbon fuel. In the last approx. 40 years since the large infrastructure for transmission of natural gas to Europe was built, the only major supply interruption lasted 13 days. A period of thirty days for the supply standard would therefore be more than sufficient to cover all eventualities and would decrease costs significantly. A thirty day period also seems long enough to restore gas supplies or implement additional measures, such as supplies via reverse flows.
Amendment  15 Proposal for a regulation Article 7 – paragraph 2
Text proposed by the Commission	Amendment
2. The Competent Authority shall take the measures to ensure the gas supply to the protected customers for the period of sixty days also in the event of an Emergency as defined in Article 9(2). The Competent Authority shall endeavour to maintain the supply for the protected customers as long as necessary.	2. The Competent Authority shall require supply undertakings to ensure the gas supply to the protected customers for the period of thirty days also in the event of an Emergency as defined in Article 9(2). The supply undertakings, in cooperation with the Competent Authority, shall endeavour to maintain the supply for the protected customers as long as possible on market-based security of gas supply.
Justification
It should be a primary obligation of the supply undertakings to ensure supply standards. A period of thirty days would decrease consumers’ costs, see Article 7 paragraph 1.
The market should operate as long as possible and market-based mechanisms should develop the physical and contractual tools to maintain supplies for the protected customers.
Amendment  16 Proposal for a regulation Article 7 – paragraph 3
Text proposed by the Commission	Amendment
3. The obligations imposed on natural gas undertakings for the fulfilment of the supply standard as laid down in paragraph 1 and 2 , shall be non-discriminatory and shall not impose an undue burden on market entrants and small undertakings.	3. The obligations imposed on natural gas undertakings for the fulfilment of the supply standard as laid down in paragraph 1 and 2 , shall be non-discriminatory and shall not impose an undue burden on those undertakings.
Justification
The objectives of the draft Regulation can only be achieved if the role and responsibilities of each actor is clearly defined based on standards applying to all market participants on an equal footing, including market entrants and small undertakings.
Amendment  17 Proposal for a regulation Article 8 – paragraph 1
Text proposed by the Commission	Amendment
1. By [30 September 2010; 6 months after entry into force] each Competent Authority shall fully assess the risks affecting the security of gas supply in its Member State by:	1. By ...* each Competent Authority shall undertake a risk and impact assessment that shall be the basis for:
a) using the standards specified in Articles 6 and 7;	a) the establishment of the risk profile of the Member State concerned, taking into account all relevant national and regional circumstances;
b) taking into account all relevant national and regional circumstances;	b) the establishment of the Preventive Action Plan of the Member State concerned;
c) running various scenarios of exceptionally high demand and supply disruption, such as failure of main transmission infrastructures, storages, LNG terminals, and disruption of supplies from third country suppliers;	c) the establishment of the Emergency Plan of the Member State concerned;
d) identifying the interaction and correlation of risks with other Member States.	The risk and impact assessment shall be based on the standards specified in Articles 6 and 7 and shall include running various scenarios of exceptionally high demand and/or supply disruption, such as failure of main transmission infrastructures, storages, LNG terminals, and disruption of supplies from third-country producers. Account shall be taken of the interaction and correlation of risks with other Member States.
	* OJ please insert date: 12 months after entry into force of this Regulation.
Justification
The deadline for the risk and impact assessment according to Article 8 paragraph 1 should be the same as in Article 4 paragraph 1. The proposed Regulation sets up strong structural obligations for Member States, as for instance the N-1 rule for infrastructure standard or binding provisions relating to reverse flows. It is necessary to carefully assess the measures proposed in order to avoid that new capacities would remain unused, generating sunk costs and leading to price increases for final customers and impeding the competitiveness of the gas industry as a whole. A risk and impact assessment should therefore be carried out by each Member State in accordance with a common methodology, whilst allowing the Member State to take into account particular national circumstances and specificities where appropriate. The results shall be reflected in preventive action and emergency plans. Similar plans could also be prepared at the regional level.
Amendment  18 Proposal for a regulation Article 8 – paragraph 1 a (new)
Text proposed by the Commission	Amendment
	The risk and impact assessment shall take into account technical feasibility and a cost-benefit analysis. This should, in particular, be the case prior to any potential extension at national level of the scope of protected consumers beyond household customers.
Justification
The deadline for the risk and impact assessment according to Article 8 paragraph 1 should be the same as in Article 4 paragraph 1. The proposed Regulation sets up strong structural obligations for Member States, as for instance the N-1 rule for infrastructure standard or binding provisions relating to reverse flows. It is necessary to carefully assess the measures proposed in order to avoid that new capacities would remain unused, generating sunk costs and leading to price increases for final customers and impeding the competitiveness of the gas industry as a whole. A risk and impact assessment should therefore be carried out by each Member State in accordance with a common methodology, whilst allowing the Member State to take into account particular national circumstances and specificities where appropriate. The results shall be reflected in preventive action and emergency plans. Similar plans could also be prepared at the regional level.
Amendment  19 Proposal for a regulation Article 8 – paragraph 1 b (new)
Text proposed by the Commission	Amendment
	1b. Following a Commission recommendation in accordance with Article 4(3), or where a joint regional plan is established under Article 4(4), the obligations set out in this Article may be fulfilled at regional level.
Justification
The deadline for the risk and impact assessment according to Article 8 paragraph 1 should be the same as in Article 4 paragraph 1. The proposed Regulation sets up strong structural obligations for Member States, as for instance the N-1 rule for infrastructure standard or binding provisions relating to reverse flows. It is necessary to carefully assess the measures proposed in order to avoid that new capacities would remain unused, generating sunk costs and leading to price increases for final customers and impeding the competitiveness of the gas industry as a whole. A risk and impact assessment should therefore be carried out by each Member State in accordance with a common methodology, whilst allowing the Member State to take into account particular national circumstances and specificities where appropriate. The results shall be reflected in preventive action and emergency plans. Similar plans could also be prepared at the regional level.
Amendment  20 Proposal for a regulation Article 8 – paragraph 3 a (new)
Text proposed by the Commission	Amendment
	3a. By ...* each joint regional plan under Article 4(4) shall include a comprehensive assessment of the risks to security of gas supply in its region, taking account of the risk assessments previously drawn up by the participating Member States.
	* OJ please insert date: nine months after entry into force of this Regulation.
Amendment  21 Proposal for a regulation Article 8 – paragraph 3 b (new)
Text proposed by the Commission	Amendment
	3b. By ...* the Commission shall carry out a comprehensive assessment of the risks to security of gas supply in the European Union, taking account of the risk assessments previously drawn up by the Member States and any joint regional plans.
	* OJ please insert date: 12 months after the entry into force of this Regulation.
Amendment  22 Proposal for a regulation Article 9 – paragraph 1 – point 7
Text proposed by the Commission	Amendment
(7) Identify the contribution of the non-market based measures planned or to be implemented for the Emergency level listed in Annex III and assess the degree to which the use of non-market based measures is necessary to cope with the crisis, assess their effects and define the procedures to implement them;	(7) Identify the contribution of the non-market based measures planned or to be implemented for the Emergency level listed in Annex III, on the basis of a cost-benefit analysis assess the degree to which the use of non-market based measures is necessary to cope with the crisis, and only as a last resort in order to safeguard continuity of gas supply, assess their effects and define the procedures to implement them;
Amendment  23 Proposal for a regulation Article 9 – paragraph 2 – point 1
Text proposed by the Commission	Amendment
(1)Early warning level (Early Warning): when there is concrete, serious and reliable information, possibly triggered by an Early Warning Mechanism, that an event may occur which will deteriorate the supply conditions;	(1)Early warning level (Early Warning): concrete, serious and reliable suggests that supply conditions could deteriorate in the short term. The market is expected to solve the problem without the intervention of the Competent Authority;
Justification
Each crisis level should be explained in detail and clearly distinguished one from the other to avoid any confusion in the event of an emergency. The three-level-approach defined in Directive 2004/67/EC to ensure security of supply (I: companies; II: Member States; III: the Commission), is no longer clearly reflected in the draft Regulation. This principle should be reinstated in the draft Regulation. During the first two crisis stages, the market is fully expected to solve the problem, but during a real crisis/emergency, when market mechanisms alone are insufficient to cope with the crisis, the Member States should be involved.
Amendment  24 Proposal for a regulation Article 9 – paragraph 6
Text proposed by the Commission	Amendment
6. The Commission shall verify within one week whether the declaration of an Emergency is justified and whether it does not impose an undue burden on the natural gas undertakings and on the functioning of the internal market. The Commission may, in particular, ask the Competent Authority to modify measures imposing an undue burden on natural gas undertakings and to lift its declaration of Emergency if the Commission considers it not or no longer justified.	6. The Commission shall verify within three days whether the declaration of an Emergency fulfils the criteria set out in paragraph 2(3) and whether it does not impose an undue burden on the natural gas undertakings and on the functioning of the internal market. The Commission may, in particular, ask the Competent Authority to modify measures imposing an undue burden on natural gas undertakings and to lift its declaration of Emergency if the Commission considers it not or no longer justified.
Justification
It is necessary to shorten the timeframe as the consequences of an energy crisis are often visible already after few days and may already have a negative effect on the economy.
Amendment  25 Proposal for a regulation Article 9 – paragraph 6 a (new)
Text proposed by the Commission	Amendment
	6a. Emergency Plans shall be updated every two years.
Amendment  26 Proposal for a regulation Article 10 – paragraph 1
Text proposed by the Commission	Amendment
1. The Commission may declare a Community Emergency at the request of one Competent Authority or when the Community loses more than 10% of its daily gas import from third countries as calculated by ENTSO-G. It shall declare a Community Emergency where more than one Competent Authority has declared Emergency following the verification in accordance with Article 9(6). It may declare a Community Emergency for specifically affected geographical regions comprising more than one Member State.	1. The Commission may declare a Union Emergency at the request of one Competent Authority or where the Union is losing more than 10% of its daily gas import from third countries – which amounts to the daily consumption of certain Member States – as calculated by ENTSO-G. It shall declare a Union Emergency where more than one Competent Authority has declared Emergency following the verification in accordance with Article 9(6). It may declare a Union Emergency for specifically affected geographical regions comprising more than one Member State.
Justification
It is necessary to recall that a 10% fall-out of the daily gas import is already in the magnitude of the daily gas consumption of a smaller Member State, therefore adherence to the 10% limit is of importance.
Amendment  27 Proposal for a regulation Article 11 – paragraph 2 – point g
Text proposed by the Commission	Amendment
(g) implementation of the Plans;	(g) Preventive Action Plans and Emergency Plans and the implementation of the measures provided for therein;
Amendment  28 Proposal for a regulation Article 12 – paragraph 3
Text proposed by the Commission	Amendment
3. The Competent Authorities and the Commission shall ensure the confidentiality of commercially sensitive information.	3. The Competent Authorities and the Commission shall establish a structure to ensure the confidentiality and protection of commercially sensitive information.
Amendment  29 Proposal for a regulation Article 14
Text proposed by the Commission	Amendment
Monitoring	Monitoring by the Commission
By […] the Commission, having assessed the notified Plans and after consulting the Gas Coordination Group, shall draw conclusions as to possible means to enhance security of supply at Community level and shall report to the European Parliament and the Council on the implementation of this Regulation. The report shall include, where appropriate, recommendations for improvement of this Regulation.	By […] the Commission, having assessed the notified plans and after consulting the Gas Coordination Group, shall draw conclusions as to possible means to enhance security of supply at Union level and the need to carry out a risk assessment and establish a Preventive Action Plan and an Emergency Plan at Union level and shall report to the European Parliament and the Council on the implementation of this Regulation. The report shall include, where appropriate, recommendations for improvement of this Regulation.
Amendment  30 Proposal for a regulation Article 14 – paragraph 1a (new)
Text proposed by the Commission	Amendment
	The report shall also include a SWOT analysis dealing with responsibility for implementing the measures to safeguard security of gas supply laid down in this Regulation. The Commission shall consider whether that responsibility should be conferred on the European Energy Regulators Group (ERGEG) rather than on the Competent Authorities of the Member States.
Amendment  31 Proposal for a regulation Article 14 a (new)
Text proposed by the Commission	Amendment
	Article 14a
	Nabucco gas pipeline project
	The European Union institutions shall give particular priority to the Nabucco gas pipeline project as regards its political profile and financing.
Justification
In a regulation that concerns the security of gas supply, diversification of gas supply should play an important part. In this context, the Nabucco pipeline could offer an alternative to the current sources of gas to the European Union.

PROCEDURE

Title	Security of gas supply
References	COM(2009)0363 – C7-0097/2009 – 2009/0108(COD)
Committee responsible	ITRE
Opinion by        Date announced in plenary	ECON 14.9.2009
Rapporteur        Date appointed	Nikolaos Chountis 20.10.2009
Discussed in committee	2.12.2009		21.1.2010
Date adopted	27.1.2010
Result of final vote	+: –: 0:	39 0 2
Members present for the final vote	Burkhard Balz, Sharon Bowles, Udo Bullmann, Pascal Canfin, Nikolaos Chountis, George Sabin Cutaş, Rachida Dati, Leonardo Domenici, Derk Jan Eppink, Markus Ferber, Elisa Ferreira, Vicky Ford, José Manuel García-Margallo y Marfil, Jean-Paul Gauzès, Sven Giegold, Sylvie Goulard, Enikő Győri, Liem Hoang Ngoc, Othmar Karas, Wolf Klinz, Jürgen Klute, Werner Langen, Astrid Lulling, Arlene McCarthy, Íñigo Méndez de Vigo, Ivari Padar, Alfredo Pallone, Anni Podimata, Antolín Sánchez Presedo, Olle Schmidt, Edward Scicluna, Peter Simon, Peter Skinner, Theodor Dumitru Stolojan, Ivo Strejček, Marianne Thyssen, Ramon Tremosa i Balcells
Substitute(s) present for the final vote	Sophie Briard Auconie, Danuta Jazłowiecka, Arturs Krišjānis Kariņš, Philippe Lamberts

OPINION of the Committee on the Environment, Public Health and Food Safety (29.1.2010)

for the Committee on Industry, Research and Energy

on the proposal for a regulation of the European Parliament and of the Council concerning measures to safeguard security of gas supply and repealing Directive 2004/67/EC
(COM(2009)0363 – C7‑0097/2009 – 2009/0108(COD))

Rapporteur: Bogusław Sonik

SHORT JUSTIFICATION

Among all fossil fuels gas is the lowest CO₂-emitteur, and as such, it plays a key role in Europe's transition towards a low-carbon energy system. Today one quarter of Europe's primary energy consumption is gas, and almost 60% of the gas is imported.[1] Though the EU's 2020 targets for renewables, energy efficiency and greenhouse gas emissions reduction would contribute to stabilisation of the increase of the demand for gas, falling domestic production would still lead to a situation where EU's dependence on gas import would stagnate or even further increase. The Russian-Ukrainian gas crises in January 2009, where 30% of Europe's import was cut off for two weeks, made it clear that under the present circumstances of increasing import dependence and growing supply and transit risk, the current Directive on the security of gas supply[2] is no longer sufficient and its review is necessary. Moreover it has to be stressed that for some of the Member States the supply disruption in January 2009 put on hold 100% of their gas import from Russia and there is still a Member State which situation after the gas disruption has not been settled down yet.

Those circumstances reveal to the maximum extend that process of building fully liberalized internal energy market is unfinished and there is a pressing need for establishing measures enhancing security of gas supply within the EU.

With regard to environmental issues, the rapporteur for opinion is of the view that security of supply must be reconciled with environmental protection in order to provide Europe with energy on a sustainable basis:

§ The environmental impact of the proposed supply and demand side measures should be taken into due account. Even in an emergency situation preference should be given to measures with the least impact on the environment.

§ It should be noted that switching from gas to fuels would result in greater greenhouse gas emission when gas is replaced by e.g. coal and fuel oil,

§ Energy saving and energy efficiency has a pivotal role in preventing and mitigating the crises, therefore such measures should be further emphasised. In this respect particular attention should be paid to the ongoing negotiations on the so-called energy efficiency package, i.e. the proposal for a Directive of the European Parliament and of the Council on the energy performance of buildings[3] and the proposal for a Directive of the European Parliament and of the Council on labelling of tyres with respect to fuel efficiency and other essential parameters[4].

§ The role of sustainable indigenous energy sources should be better emphasised. The integration of gas from renewable energy sources into the gas network infrastructure should be facilitated.

§ The rolling out of new energy infrastructure should be done after appropriate environmental impact assessment when required by specific legislation particularly by Directive 2001/42/EC and Council Directive 85/337/EEC, and with due respect to the environment and in particular to the nature protection areas under Natura 2000.

AMENDMENTS

The Committee on the Environment, Public Health and Food Safety calls on the Committee on Industry, Research and Energy, as the committee responsible, to incorporate the following amendments in its report:

Amendment   1 Proposal for a regulation Recital 8
Text proposed by the Commission	Amendment
(8) The failure of the largest single gas infrastructure or gas supply source, the so-called N-1 principle, is a realistic scenario. Using the failure of such infrastructure or supply source as a benchmark of what Member States should be able to compensate is a valid starting point for ensuring their security of gas supply.	(8) The failure of the largest single gas infrastructure, the so-called N-1 principle, is a realistic scenario. Using the failure of such infrastructure as a benchmark of what Member States should be able to compensate is a valid starting point for ensuring their security of gas supply.
Justification
The gas crisis at the beginning of 2009 showed that undertakings can guarantee supplies even if a gas supply source fails.
Amendment  2 Proposal for a regulation Recital 9
Text proposed by the Commission	Amendment
(9) Sufficient gas infrastructure within a Member State and across the Community is essential for tackling supply interruptions. Common minimum criteria on security of gas supply should ensure a level playing field for security of gas supply and should create significant incentives to build the necessary infrastructure and to improve the level of preparedness in case of crisis. Demand side measures such as fuel switching may have a valuable role to play in ensuring energy security where they can be applied quickly and reduce demand appreciably to react to a supply disruption.	(9) Sufficient gas infrastructure within a Member State and across the Community is essential for tackling supply interruptions. Common minimum criteria on security of gas supply should ensure a level playing field for security of gas supply and should create significant incentives to build the necessary infrastructure and to improve the level of preparedness in case of crisis. Demand side measures such as fuel switching may have a valuable role to play in ensuring energy security where they can be applied quickly and reduce demand appreciably to react to a supply disruption. It should be noted, however, that switching to fossil fuel would result in higher greenhouse gas emissions. The efficient use of energy as a demand-side measure should be further promoted. The environmental impact of the proposed demand and supply-side measures should be taken into due account and preference should be given to measures with the least impact on the environment. Any investment in the infrastructure should be made with due respect for the environment and the related acquis communautaire.
Amendment  3 Proposal for a regulation Recital 10
Text proposed by the Commission	Amendment
(10) Investments in new gas infrastructure should be strongly promoted. They should enhance the security of gas supply while ensuring the proper functioning of the internal market in natural gas. Where an infrastructure investment is of cross-border nature the Agency for the Cooperation of Energy Regulators established by Regulation (EC) No .../… of the European Parliament and of the Council ("ACER") and the European Network of Transmission System Operators for Gas ("ENTSO-G") should be closely involved in order to take better account of the cross‑border implications.	(10) Investments in new gas infrastructure should be strongly promoted and should be effected only after an appropriate environmental impact assessment. Such new infrastructure should enhance the security of gas supply while ensuring the proper functioning of the internal market in natural gas. Investments should as a matter of fundamental principle be made by undertakings and be based on economic incentives. The integration of gas from renewable energy sources into the gas network infrastructure should be facilitated. Where an infrastructure investment is of cross-border nature the Agency for the Cooperation of Energy Regulators established by Regulation (EC) No .../… of the European Parliament and of the Council ("ACER") and the European Network of Transmission System Operators for Gas ("ENTSO-G") should be closely involved in order to take better account of the cross‑border implications.
Amendment  4 Proposal for regulation Recital 11
Text proposed by the Commission	Amendment
(11) Different sources of Community funding are available to support Member States to finance the necessary investment in indigenous production and infrastructure, notably loans and guarantees from the European Investment Bank or funding from regional, structural or cohesion funds. The European Investment Bank as well as the Community external instruments such as ENPI, IPA and DCI can also finance actions in third countries in order to improve security of energy supply.	(11) Different sources of Community funding are available to support Member States to finance the necessary investment in indigenous production, infrastructure and energy efficiency measures, notably loans and guarantees from the European Investment Bank or funding from regional, structural or cohesion funds. The European Investment Bank as well as the Community external instruments such as ENPI, IPA and DCI can also finance actions in third countries in order to improve security of energy supply. Community funding is especially important to improve interconnectivity of regions and Member States which are considered to be "energy islands".
Amendment  5 Proposal for regulation Recital 15
Text proposed by the Commission	Amendment
(15) The precise definition of the roles and responsibilities of all natural gas undertakings and Competent Authorities is therefore crucial in maintaining the well-functioning of the internal market, particularly in supply disruptions and crisis situations.	(15) The precise definition of the roles and responsibilities of all natural gas undertakings, Competent Authorities and the Commission is therefore crucial in maintaining the well-functioning of the internal market, particularly in supply disruptions and crisis situations.
Amendment   6 Proposal for regulation Recital 22
Text proposed by the Commission	Amendment
(22) In order to ensure the highest level of preparedness in case of supply disruption, Emergency Plans should be established by all natural gas undertakings together with the Competent Authorities. Such plans should be mutually consistent. Their content should follow best practices among existing plans and should define clear roles and responsibilities for all concerned natural gas undertakings and Competent Authorities. Joint emergency plans at regional level, should be established where possible and necessary.	(22) In order to ensure the highest level of preparedness in case of supply disruption, Emergency Plans should be established by all natural gas undertakings together with the Competent Authorities. Such plans should be mutually consistent at national, regional and Community level. Their content should follow best practices among existing plans and should define clear roles and responsibilities for all concerned natural gas undertakings and Competent Authorities. Joint emergency plans at regional level, should be established where possible and necessary.
Amendment   7 Proposal for a regulation Recital 23
Text proposed by the Commission	Amendment
(23) To strengthen the solidarity between Member States in the case of a Community Emergency and in particular to support Member States which are exposed to less favourable geographical or geological conditions, Member States should devise specific measures to exercise solidarity, including measures such as commercial agreements between natural gas undertakings, compensation mechanisms, increased gas exports or increased releases from storages. Solidarity measures may be particularly appropriate between Member States for which the Commission recommends the establishment of joint preventive actions plans or emergency plans at regional level.	23) To strengthen the solidarity between Member States in the case of a Community Emergency and in particular to support Member States which are exposed to less favourable geographical or geological conditions, for instance Member States which are "energy islands", Member States should devise specific measures to exercise solidarity, as referred to in Article 194 of the Treaty on the Functioning of the European Union, including measures such as commercial agreements between natural gas undertakings, compensation mechanisms, increased gas exports or increased releases from storages. Solidarity measures may be particularly appropriate between Member States for which the Commission recommends the establishment of joint preventive actions plans or emergency plans at regional level. Commercial agreements between undertakings based on the establishment of joint preventive action plans and emergency plans should be promoted.
Justification
No binding rules should be laid down concerning possible solidarity measures or compensation arrangements.
Amendment  8 Proposal for a regulation Article 1
Text proposed by the Commission	Amendment
This Regulation establishes measures aimed at safeguarding the security of gas supply so as to ensure the proper and continuous functioning of the internal market for gas by providing for a clear definition and attribution of responsibilities and for a coordination of the response at the level of the Member States and the Community regarding both preventive action and the reaction to concrete disruptions of supply.	This Regulation establishes measures aimed at safeguarding the security of gas supply by ensuring the proper and continuous functioning of the internal market for gas and by establishing exceptional measures to be implemented when the market can no longer deliver the required gas supplies by providing for a clear definition and attribution of responsibilities and for a coordination of the response at the level of the Member States and the Community regarding both preventive action and the reaction to concrete disruptions of supply or serious and reliable threats of such disruptions, in the spirit of solidarity between the Member States.
Justification
Actual disruptions of supply should not be the only grounds for reaction; serious and reliable threats of disruptions should also be a trigger. The spirit of solidarity should be emphasised in the Regulation, in accordance with the European Council conclusions of March 2009.
Amendment  9 Proposal for a regulation Article 2 – paragraph 2 – point 1
Text proposed by the Commission	Amendment
(1) "protected customers" means all household customers already connected to a gas distribution network, and, if the Member State concerned so decides, can also include small and medium-sized enterprises, schools and hospitals provided that they are already connected to a gas distribution network;	(1) "protected customers" means all household customers already connected to a gas distribution network, and, if the Member State concerned so decides, can also include other customers, such as small and medium-sized enterprises, schools and hospitals and other institutions providing medical, social and educational public services provided that they are already connected to a gas distribution network;
Justification
Member States should be entitled to define the list of protect customers at national legislation level according to their needs and further extend the scope of protected consumers if they consider it necessary.
Amendment  10 Proposal for a regulation Article 3 – paragraph 4 a (new)
Text proposed by the Commission	Amendment
	4a. The Commission shall implement the measures within its competence that are provided for in this Regulation. Those measures shall include, in particular, the annual risk assessment referred to in Article 8(1a) and the continuous monitoring of security of gas supply at Community level.
Justification
Given the cross-border nature of gas crises, prevention and preparation should also be organised at Commission/Community level.
Amendment  11 Proposal for a regulation Article 4 – paragraph 1 – introductory part
Text proposed by the Commission	Amendment
1. By [31 March 2011; 12 months from entry into force] at the latest, the Competent Authority, after consultation of the natural gas undertakings, of the relevant organisations representing the interests of household and industrial customers and of the regulatory authority, where it is not the Competent Authority, shall establish:	1. By [31 March 2011; 12 months from entry into force], the Competent Authority, after consultation of the natural gas undertakings, of the relevant organisations representing the interests of household customers, industrial customers and other stakeholders and of the regulatory authority, where it is not the Competent Authority, and in accordance with paragraph 2, shall establish:
Justification
Given the cross-border nature of gas crises, crisis prevention and preparation should be better coordinated at Community level. The obligation to consult the competent authorities of other Member States and the Commission should be further emphasised.
Amendment  12 Proposal for a regulation Article 4 – paragraph 2
Text proposed by the Commission	Amendment
2. Before adopting those Plans the Competent Authorities shall exchange information and consult each other and the Commission to ensure that their Plans and measures are mutually consistent at the appropriate regional level. These consultations shall cover, as a minimum, interconnections, cross-border supplies, storage across borders and the physical capacity to transport gas in both directions.	2. Before adopting those Plans the Competent Authorities shall exchange information and consult each other and the Commission to ensure that their Plans and measures are mutually consistent at the appropriate regional and Community level. These consultations shall cover, as a minimum, interconnections, cross-border supplies, storage across borders and the physical capacity to transport gas in both directions as well as contractual restrictions to provision of cross-border supplies. In the course of the consultation, the confidentiality of commercially sensitive information shall be safeguarded.
Justification
Given the cross-border nature of gas crises, crisis prevention and preparation should also be organised at Community level. The competent authority in this matter should be the European Commission.
Amendment  13 Proposal for regulation Article 4 – paragraph 3
Text proposed by the Commission	Amendment
3. During the process mentioned in paragraph 2 the Commission may recommend at which regional level the exchange of information and consultations shall take place. The Commission, after consultation of the European Network of Transmission System Operators for Gas ("ENTSO-G") and the Agency for the Cooperation of Energy Regulators ("ACER"), may also recommend the establishment of a joint Plan at regional level.	3. During the process mentioned in paragraph 2 the Commission may recommend at which regional level the exchange of information and consultations shall take place. The Commission, if necessary after consultation of the European Network of Transmission System Operators for Gas ("ENTSO-G") and the Agency for the Cooperation of Energy Regulators ("ACER"), may also recommend or request the establishment of a joint Plan at regional level.
Amendment  14 Proposal for a regulation Article 5 – paragraph 1 – point a
Text proposed by the Commission	Amendment
(a) the measures to fulfil the infrastructure and supply standards, as laid down in Articles 6 and 7; these measures shall include at least the planning to meet the N-1 standard, volumes and capacities needed to supply the protected customers in the defined high demand periods, the demand side measures and obligations imposed on natural gas undertakings and other relevant bodies;	(a) the measures to fulfil the infrastructure and supply standards, as laid down in Articles 6 and 7; these measures shall include at least the planning to meet the N-1 standard, volumes and capacities needed to supply the protected customers in the defined high-demand periods while complying with Directive 2001/42/EC of the European Parliament and of the Council of 27 June 2001 on the assessment of the effects of certain plans and programmes on the environment1 and Council Directive 85/337/EEC of 27 June 1985 on the assessment of the effects of certain public and private projects on the environment2, the demand side measures and obligations imposed on natural gas undertakings and other relevant bodies;
	1. OJ L 197, 21.7.2001, p. 30.
	2. OJ L 175, 5.7.1985, p. 40.
Amendment  15 Proposal for a regulation Article 6 – paragraph 1
Text proposed by the Commission	Amendment
1. By [31 March 2014; 3 years after entry into force] at the latest, the Competent Authority shall ensure that in the event of a disruption of the largest gas supply infrastructure, the remaining infrastructure (N-1) has the capacity to deliver the necessary volume of gas to satisfy total gas demand of the calculated area during a period of sixty days of exceptionally high gas demand during the coldest period statistically occurring every twenty years.	1. By [31 March 2016; 5 years after entry into force], the Competent Authority shall ensure that in the event of a disruption of the largest gas supply infrastructure, the remaining infrastructure (N-1) has the capacity to deliver the necessary volume of gas to satisfy total gas demand of the calculated area during a period of sixty days of exceptionally high gas demand during the coldest period statistically occurring every twenty years.
Justification
From a technical point of view, it is impossible to roll out the necessary infrastructure and to adapt whole transmission systems in three years.
Amendment  16 Proposal for a regulation Article 6 – paragraph 5
Text proposed by the Commission	Amendment
5. The transmission system operators shall enable permanent physical capacity to transport gas in both directions on all interconnections within two years from the entry into force of this Regulation, except in cases where at the request of a Competent Authority, the Commission decides that the addition of a bi-directional flow capacity would not enhance the security of supply of any Member State. Such decision may be reviewed if circumstances change. The level of the bi-directional flow capacity shall be reached in a cost efficient way and at least take into account the capacity required to meet the supply standard set in Article 7. Within that two year period, the gas transmission system operator shall adapt the functioning of the transmission system as a whole so as to enable bi-directional gas flows.	5. The transmission system operators shall enable permanent physical capacity to transport gas in both directions on all interconnections within four years from the entry into force of this Regulation, except in cases where at the request of a Competent Authority, the Commission decides that the addition of a bi-directional flow capacity would not enhance the security of supply of any Member State. Such decision may be reviewed if circumstances change. The level of the bi-directional flow capacity shall be reached in a cost efficient way and at least take into account the capacity required to meet the supply standard set in Article 7. Within that four-year period, the gas transmission system operator shall adapt the functioning of the transmission system to enable bi-directional gas flows. The gas transmission operator shall upgrade the infrastructure to ensure that methane leaks from pipelines and from compressor stations are minimised.
Justification
From a technical point of view, it is impossible to adapt whole transmission systems in order to enable bi-directional flows.
Amendment  17 Proposal for regulation Article 6 – paragraph 7
Text proposed by the Commission	Amendment
7. National Regulatory Authorities shall take into account the costs of fulfilling the N-1 standard and the costs of enabling the permanent physical capacity to transport gas in both directions in their approval of tariffs in line with Article 41(8) of Directive […/…EC]. In the case of costs incurred in more than one Member State, the national regulatory authorities of all Member States concerned shall jointly decide on cost allocation. Article 8(1) of Regulation (EC) No …/… shall apply.	7. National Regulatory Authorities shall take into account the costs of fulfilling the N-1 standard and the costs of enabling the permanent physical capacity to transport gas in both directions in their approval of tariffs in line with Article 41(8) of Directive […/…EC]. In the case of costs incurred in more than one Member State, the national regulatory authorities of all Member States concerned shall jointly decide on cost allocation. Article 8(1) of Regulation (EC) No …/… shall apply. The possibility of co-financing the improvement of the interconnectivity from Community funds, especially for the regions which are considered to be "energy islands", shall be explored.
Amendment   18 Proposal for a regulation Article 8 – paragraph 1 – introductory part
Text proposed by the Commission	Amendment
1. By [30 September 2010; 6 months after entry into force] each Competent Authority shall fully assess the risks affecting the security of gas supply in its Member State by:	1. By [30 September 2010; 6 months after entry into force] each Competent Authority shall assess the risks affecting the security of gas supply in its Member State by:
Justification
This requirement to assess the risks fully would entail bureaucracy and administrative work, the amount of which should not be underestimated, for the competent authorities, yet it is not clear whether the information could actually improve the situation in the event of a Community Emergency.
Amendment  19 Proposal for a regulation Article 8 – paragraph 1 a (new)
Text proposed by the Commission	Amendment
	1a. By [30 March 2011; 12 months after entry into force] the Commission shall fully assess the risks affecting the security of gas supply in the Community (Community Assessment) by taking into account, in particular, risk assessments made by each Member State and all the relevant international circumstances.
Justification
Added value of risk assessment at Community level. Both “national” and community risk assessment shall be revised when a significant or unexpected risk occurs.
Amendment  20 Proposal for regulation Article 8 – paragraph 2
Text proposed by the Commission	Amendment
2. The natural gas undertakings, the relevant organisations representing the interests of household and industrial customers and the regulatory authority, where it is not the Competent Authority, shall cooperate and provide all necessary information for the risk assessment.	2. The natural gas undertakings, the relevant organisations representing the interests of household, industrial customers and other stakeholders and the regulatory authority, where it is not the Competent Authority, shall cooperate and provide all necessary information for the risk assessment.
Amendment  21 Proposal for a regulation Article 8 – paragraph 3
Text proposed by the Commission	Amendment
3. The risk assessment shall be repeated every two years before 30 September of that year.	3. The risk assessment shall be repeated annually before 30 September.
Justification
The risk assessment must be repeated more regularly in order to foresee better and be better prepared for a crisis.
Amendment  22 Proposal for a regulation Article 9 – paragraph 2 – point 3
Text proposed by the Commission	Amendment
(3) Emergency level (Emergency): when an exceptionally high demand occurs or when there is a disruption of the supply through or from the largest infrastructure or source and there is a credible risk that the supply standard to the protected customers can no longer be met with market based instruments alone.	(3) Emergency level (Emergency): when an exceptionally high demand occurs or when there is a disruption of the supply through or from the largest infrastructure or source or there is a credible risk that the supply standard to the protected customers can no longer be met with market based instruments alone.
Justification
The trigger for the implementation of emergency responses should be more flexible.
Amendment   23 Proposal for a regulation Article 9 - paragraph 4
Text proposed by the Commission	Amendment
4. The Competent Authority shall immediately inform the Commission and provide it with all the necessary information when it declares any of the crisis levels. In the event of an emergency which may result in a call for assistance from the EU and its Member States the Competent Authority of the Member State concerned shall without delay notify the Commission’s Civil Protection Monitoring and Information Centre.	4. The Competent Authority shall immediately inform the Commission and provide it with all the necessary information when it declares the alert or emergency level. In the event of an emergency which may result in a call for assistance from the EU and its Member States the Competent Authority of the Member State concerned shall without delay notify the Commission’s Civil Protection Monitoring and Information Centre.
Justification
It is only at the alert and emergency levels that the Member States and the EU have the task of restoring security of supply. At the early warning level, undertakings are responsible for remedying the supply disruption.
Amendment  24 Proposal for a regulation Article 9 – paragraph 5
Text proposed by the Commission	Amendment
5. When the Competent Authority declares an Emergency it shall follow the pre-defined actions as defined in its Emergency Plan and shall immediately inform the Commission in particular of the actions it intends to take according to Article 9(1). The Commission may convene the Gas Coordination Group.	5. When the Competent Authority declares an Emergency it shall follow the pre-defined actions as defined in its Emergency Plan and shall immediately inform the Commission in particular of the actions it intends to take according to Article 9(1). The Commission shall convene the Gas Coordination Group.
Justification
There is a need to make the competences of the European Commission in terms of crisis management at the Community emergency level more precise.
Amendment  25 Proposal for regulation Article 9 - paragraph 6
Text proposed by the Commission	Amendment
6. The Commission shall verify within one week whether the declaration of an Emergency is justified and whether it does not impose an undue burden on the natural gas undertakings and on the functioning of the internal market. The Commission may, in particular, ask the Competent Authority to modify measures imposing an undue burden on natural gas undertakings and to lift its declaration of Emergency if the Commission considers it not or no longer justified.	6. The Commission shall verify within three calendar days whether the declaration of an Emergency is justified and whether it does not impose an undue burden on the natural gas undertakings and on the functioning of the internal market. The Commission may, in particular, ask the Competent Authority to modify measures imposing an undue burden on natural gas undertakings and to lift its declaration of Emergency if the Commission considers it not or no longer justified.
Amendment  26 Proposal for a regulation Article 10 – paragraph 1
Text proposed by the Commission	Amendment
1. The Commission may declare a Community Emergency at the request of one Competent Authority or when the Community loses more than 10% of its daily gas import from third countries as calculated by ENTSO-G. It shall declare a Community Emergency where more than one Competent Authority has declared Emergency following the verification in accordance with Article 9(6). It may declare a Community Emergency for specifically affected geographical regions comprising more than one Member State.	1. The Commission shall declare a Community Alert at the request of one Competent Authority. The Commission shall declare a Community Emergency at the request of one Competent Authority or when the Community loses more than 10% of its daily gas import from third countries other than members of the European Economic Area as calculated by ENTSO-G. It shall also declare a Community Emergency where more than one Competent Authority has declared an Emergency following verification in accordance with Article 9(6). It may declare a Community Emergency for specifically affected geographical regions comprising more than one Member State.
Amendment  27 Proposal for a regulation Article 10 – paragraph 2
Text proposed by the Commission	Amendment
2. The Commission shall convene the Gas Coordination Group as soon as it declares Community Emergency.	2. The Commission shall convene the Gas Coordination Group as soon as it declares a Community Alert or a Community Emergency.
Amendment  28 Proposal for a regulation Article 10 – paragraph 2 b (new)
Text proposed by the Commission	Amendment
	2b. In a Community Alert the Commission shall request the Competent Authorities to coordinate their actions in order to overcome a supply disruption or exceptionally high demand.
Amendment  29 Proposal for a regulation Article 10 – paragraph 6
Text proposed by the Commission	Amendment
6. In a Community Emergency, the Member States shall ensure that cross-border access to the storage facilities is maintained and shall not introduce any legal provisions which unduly restrict the flows of gas to the affected markets.	6. In a Community Emergency the Member States shall ensure that cross-border access to the storage facilities is maintained and shall not introduce any legal provisions which unduly restrict the flows of gas to the affected markets. The Commission shall facilitate the application of those measures in order to maintain the good functioning of the internal market, particularly in supply disruptions and in crisis situations.
Amendment  30 Proposal for regulation Article 12 – paragraph 6 – point b – indent 4 a (new)
Text proposed by the Commission	Amendment
	- Contractual restrictions on re-exporting.
Amendment  31 Proposal for a regulation Annex II – introductory part
Text proposed by the Commission	Amendment
In developing the Preventive and Emergency Plans the Competent Authority shall take into account the following indicative and non-exhaustive list of measures:	In developing the Preventive and Emergency Plans the Competent Authority shall take into account the indicative and non-exhaustive list of measures set out in this Annex. The Competent Authority shall take into due account the environmental impact of the proposed measures when developing the Preventive and Emergency Plans and shall give preference, to the greatest possible extent, to those measures which have the least impact on the environment.
Amendment  32 Proposal for a regulation Annex II – title 'Supply side' – bullet 2 a (new)
Text proposed by the Commission	Amendment
	· Facilitating the integration of gas from renewable energy sources into the gas network infrastructure
Amendment   33 Proposal for a regulation Annex III – paragraph 1 – introductory part
Text proposed by the Commission	Amendment
In developing the Preventive and Emergency Plans the Competent Authority shall consider the contribution of the following measures only in the case of an Emergency:	In developing the Preventive and Emergency Plans the Competent Authority shall consider the contribution of the following non-exhaustive list of measures only in the case of an Emergency:
Justification
In establishing Preventive and Emergency Plans, no compulsory measures must be prescribed.

PROCEDURE

Title	Security of gas supply
References	COM(2009)0363 – C7-0097/2009 – 2009/0108(COD)
Committee responsible	ITRE
Opinion by        Date announced in plenary	ENVI 14.9.2009
Rapporteur        Date appointed	Bogusław Sonik 15.9.2009
Discussed in committee	1.12.2009
Date adopted	27.1.2010
Result of final vote	+: –: 0:	52 0 4
Members present for the final vote	János Áder, Elena Oana Antonescu, Kriton Arsenis, Pilar Ayuso, Paolo Bartolozzi, Sandrine Bélier, Milan Cabrnoch, Martin Callanan, Nessa Childers, Chris Davies, Bairbre de Brún, Esther de Lange, Bas Eickhout, Edite Estrela, Elisabetta Gardini, Gerben-Jan Gerbrandy, Françoise Grossetête, Cristina Gutiérrez-Cortines, Satu Hassi, Jolanta Emilia Hibner, Karin Kadenbach, Christa Klaß, Jo Leinen, Corinne Lepage, Peter Liese, Kartika Tamara Liotard, Linda McAvan, Radvilė Morkūnaitė-Mikulėnienė, Miroslav Ouzký, Vladko Todorov Panayotov, Antonyia Parvanova, Andres Perello Rodriguez, Sirpa Pietikäinen, Mario Pirillo, Pavel Poc, Vittorio Prodi, Oreste Rossi, Dagmar Roth-Behrendt, Carl Schlyter, Horst Schnellhardt, Richard Seeber, Theodoros Skylakakis, Bogusław Sonik, Catherine Soullie, Salvatore Tatarella, Åsa Westlund, Glenis Willmott, Sabine Wils, Marina Yannakoudakis
Substitute(s) present for the final vote	Cristian Silviu Buşoi, Bill Newton Dunn, Crescenzio Rivellini, Renate Sommer, Struan Stevenson, Michail Tremopoulos, Anna Záborská

• [1]  EU-27 average, 2007 figure
• [2]  Council Directive 2004/67/EC of 26 April 2004 concerning measures to safeguard security of natural gas supply; OJ L 127, 29.4.2004, p. 92
• [3]  2008/0223 (COD)
• [4]  2008/0221 (COD)

OPINION of the Committee on the Internal Market and Consumer Protection (2.12.2009)

for the Committee on Industry, Research and Energy

on the proposal for a regulation of the European Parliament and of the Council concerning measures to safeguard security of gas supply and repealing Directive 2004/67/EC
(COM(2009)0363– C7‑0097/2009 – 2009/0108(COD))

Rapporteur: Sandra Kalniete

SHORT JUSTIFICATION

In recent years much has changed in Europe's security of gas supply, with dependence on imports increasing and supply and transit risks growing. The January 2009 Russian-Ukrainian gas crisis demonstrated that investments in infrastructures across Europe are still needed and that further market integration would improve the security of supply.

The security of supply aspects of long-term planning of investments in sufficient cross-border capacities and other infrastructures, ensuring the long-term ability of the system to guarantee security of supply and meet reasonable demands are addressed by Directive 2009/73/EC concerning common rules for the internal market in natural gas.

This proposal wishes to ensure that there is sufficient infrastructure and preparedness to prevent and cope with immediate gas supply disruptions. It aims to ensure that the internal gas market continues to function effectively as long as possible during such events and that there are clear mechanisms for a coordinated response to concrete disruptions of supply.

To allow for a more effective response, Directive 2004/67/EC, which establishes a number measures to ensure the security of gas supply, should be replaced by a Regulation (which in itself is more effective due to its direct applicability) containing more precise security of supply standards and planning for emergencies.

Though the rapporteur for opinion welcomes the proposal, she is of the view that there is room for further improvement, mainly with regard to consumer protection issues and the application of market based instruments during a gas crisis. She therefore proposes amendments along the following lines:

· Affordable and easy access to energy for all European consumers has a high priority for the rapporteur for opinion. This has to be guaranteed also during crisis situations, particularly to the protected customers whose scope has to be clearly and pragmatically defined. Customers have to be informed properly about their right to uninterrupted supply during a crisis;

· Any disruption of supply has to be met with a graduated and coordinated response at the level of gas undertakings, Members States, and the Community. While security of gas supply is a shared task among these actors, their respective roles and responsibilities have to be clearly defined;

· Market based instruments to respond to supply disruptions have to take clear precedence over any non-market based measures which should only be resorted to as a last resort.

AMENDMENTS

The Committee on the Internal Market and Consumer Protection calls on the Committee on Industry, Research and Energy, as the committee responsible, to incorporate the following amendments in its report:

Amendment  1 Proposal for a regulation Recital 4
Text proposed by the Commission	Amendment
(4) However, under the current measures regarding the security of gas supply that have been taken at Community level, Member States still enjoy a large margin of discretion as to the choice of measures. Where the security of supply of a Member State is threatened, there is a clear risk that measures developed unilaterally by that Member State may jeopardise the proper functioning of the internal gas market. Recent experience has demonstrated the reality of that risk. To allow the internal gas market to function even in the face of a shortage of supply, it is therefore necessary to provide for a more coordinated response to supply crises, both concerning preventive action and the reaction to concrete disruptions of supply.	(4) However, under the current measures regarding the security of gas supply that have been taken at Community level, Member States still enjoy a large margin of discretion as to the choice of measures. Where the security of supply of a Member State is threatened, there is a clear risk that measures developed unilaterally by that Member State may jeopardise the proper functioning of the internal gas market and the security of protected, including vulnerable, customers. Recent experience has demonstrated the reality of that risk. To allow the internal gas market to function even in the face of a shortage of supply, it is therefore necessary to provide for solidarity and coordination in the response to supply crisis, both concerning preventive action and the reaction to concrete disruptions of supply.
Justification
It is considered that the concept of costumer protection and solidarity is not fully integrated in this proposal. As this regulation concerns security of gas supply, taking into consideration customer protection and solidarity between Member States is essential for the preparation of the response to disruptions of supply.
Amendment  2 Proposal for a regulation Recital 6
Text proposed by the Commission	Amendment
(6) A major disruption of gas supply to the Community can affect all Member States and Contracting Parties of the Energy Community Treaty and lead to severe economic damages across the Community economy. Likewise, the disruption of gas supply can have severe social impacts in particular on vulnerable groups of customers.	(6) A major disruption of gas supply to the Community is liable to impact on the EU's strategic interests and can affect all Member States and Contracting Parties of the Energy Community Treaty and lead to severe economic damage across the Community economy, as well as indirectly affecting subsidiary sectors. Likewise, the disruption of gas supply can have severe social impacts in particular on vulnerable groups of customers.
Amendment  3 Proposal for a regulation Recital 12
Text proposed by the Commission	Amendment
(12) This Regulation should enable natural gas undertakings and customers to rely on market mechanisms for as long as possible when coping with disruptions. It should also provide for emergency mechanisms to be used when markets are no longer able to deal adequately with a gas supply disruption. Even in an Emergency, market based instruments should be given priority to mitigate the effects of the supply disruption.	(12) This Regulation should enable natural gas undertakings and customers to rely on market mechanisms for as long as possible when coping with disruptions. It should also provide for emergency mechanisms to be used when markets are no longer able to deal adequately with a gas supply disruption. Even in an Emergency, market based instruments should be given priority to mitigate the effects of the supply disruption, provided the general interest of consumers in the Member States concerned is not affected.
Amendment  4 Proposal for a regulation Recital 13
Text proposed by the Commission	Amendment
(13) Following the adoption of the third internal energy market package, new provisions will apply to the gas sector, creating clear roles and responsibilities for Member States, regulators, transmission system operators and ACER, as well as improving the transparency of the market for the benefit of its well-functioning and the security of supply.	(13) Following the adoption of the third internal energy market package, new provisions will apply to the gas sector, creating clear roles and responsibilities for Member States, regulators, transmission system operators and ACER, as well as improving the transparency of the market to the benefit of its well-functioning, the security of supply and the protection of customers.
Justification
It is considered that the concept of costumer protection and solidarity is not fully integrated in this proposal. As this regulation concerns security of gas supply, taking into consideration customer protection and solidarity between Member States is essential for the preparation of the response to disruptions of supply
Amendment  5 Proposal for a regulation Recital 14
Text proposed by the Commission	Amendment
(14) The completion of the internal gas market and effective competition within that market offer the Community the highest level of security of supply for all Member States, provided that the market is allowed to work fully in case of disruption of supply affecting a part of the Community, whatever the cause of the disruption. To this end, a comprehensive and effective common approach to security of supply is required, particularly through transparent and non-discriminatory policies compatible with the requirements of the market, avoiding market distortions and undermining of market responses to disruptions.	(14) The completion of the internal gas market and effective competition within that market offer the Community the highest level of security of supply for all Member States, provided that the market is allowed to work fully in case of disruption of supply affecting a part of the Community, whatever the cause of the disruption. To this end, a comprehensive and effective common approach to security of supply is required, particularly through transparency, solidarity and non-discriminatory policies compatible with the requirements of the market, avoiding market distortions and undermining of market responses to disruptions.
Justification
It is considered that the concept of costumer protection and solidarity is not fully integrated in this proposal. As this regulation concerns security of gas supply, taking into consideration customer protection and solidarity between Member States is essential for the preparation of the response to disruptions of supply
Amendment  6 Proposal for a regulation Recital 16
Text proposed by the Commission	Amendment
(16) Sufficiently harmonised security of supply standards covering at least the situation that occurred in January 2009, taking into account the difference between Member States, should be defined, without imposing unreasonable and disproportionate burdens on natural gas undertakings including new entrants and small undertakings.	(16) Sufficiently harmonised security of supply standards covering at least the situation that occurred in January 2009, taking into account the difference between Member States, should be defined, taking into account Public Service Obligations and customer protection measures as referred to in Article 3 of Directive 2009/73/EC of the European Parliament and of the Council of 13 July 2009 concerning common rules for the internal market in natural gas1 without imposing unreasonable and disproportionate burdens on natural gas undertakings including new entrants and small undertakings.
	_____ 1 OJ L 211, 14.8.2009, p. 94.
Justification
It is crucial to assure that Member States take measures to protect all different categories of customers. Public service obligations, protection of vulnerable customer, fighting with energy poverty, well-being and health of citizens need to be considered while preparing strategic plans for the security of supply.
Amendment  7 Proposal for a regulation Recital 18
Text proposed by the Commission	Amendment
(18) It is important that gas supply is maintained, particularly as regards household customers, as well as other protected customers such as schools and hospitals, in cases in which the market cannot continue to supply them. It is essential that the measures to be taken during a crisis are defined in advance of any crisis.	(18) It is important that gas supply is maintained and provided by the Member States, particularly as regards household customers, including vulnerable customers, as well as other protected customers such as schools and hospitals, in cases in which the market cannot continue to supply them. It is essential that the measures to be taken during a crisis are defined in advance of any crisis, especially as concerns Public Service Obligations and customer protection measures as referred to in Directive 2009/73/EC, prevention of excessive pricing and compensation to vulnerable customers.
Amendment  8 Proposal for a regulation Recital 20
Text proposed by the Commission	Amendment
(20) The security of supply aspects of long-term planning of investments in sufficient cross-border capacities and other infrastructures, ensuring the long-term ability of the system to guarantee security of supply and meet reasonable demands, are addressed by Directive .../…/EC of the European Parliament and of the Council [concerning common rules for the internal market in natural gas and repealing Directive 2003/55/EC]. Meeting the security of supply standards may require a transitional period to allow the necessary investments to be made. The 10-year network development plan drawn up by the ENTSO-G and supervised by ACER is a fundamental tool to identify the required investments needed at Community level.	(20) The security of supply aspects of long-term planning of investments in sufficient cross-border capacities and other infrastructures, ensuring the long-term ability of the system to guarantee security of supply and meet reasonable demands, are addressed by Directive 2009/73/EC of the European Parliament and of the Council [concerning common rules for the internal market in natural gas and repealing Directive 2003/55/EC]. The 10-year network development plan drawn up by the ENTSO-G and supervised by ACER is a fundamental tool to identify the required investments needed at Community level. Member States should ensure that all measures for the implementation of Directive 2009/73/EC necessary to ensure the effective application of this Regulation are adopted by the date of the entry into force of this Regulation.
Justification
There should be an incentive for Member States to implement the earlier adopted Gas Directive as soon as possible for the well-functioning of the internal market for gas. Therefore, the proposed Regulation should only enter into force when all Member States have implemented the Gas Directive. Otherwise two legal instruments will exist next to each other at the same time, with the immediate enforceability of the Regulation on the one hand, and on the other hand the Gas Directive that still has to be implemented. Implementing the Gas Directive before the entry into force of the Regulation will have the advantage that there can be no legal uncertainty left for any of the stakeholders, thus optimising the internal market.
Amendment  9 Proposal for a regulation Recital 23
Text proposed by the Commission	Amendment
(23) To strengthen the solidarity between Member States in the case of a Community Emergency and in particular to support Member States which are exposed to less favourable geographical or geological conditions, Member States should devise specific measures to exercise solidarity, including measures such as commercial agreements between natural gas undertakings, compensation mechanisms, increased gas exports or increased releases from storages. Solidarity measures may be particularly appropriate between Member States for which the Commission recommends the establishment of joint preventive actions plans or emergency plans at regional level.	(23) To strengthen the solidarity between Member States in the case of a Community Emergency and in particular to support Member States which are exposed to less favourable geographical or geological conditions, Member States should devise specific measures to exercise solidarity as stipulated in the Treaty on the Functioning of the European Union, including measures such as commercial agreements between natural gas undertakings, compensation mechanisms, increased gas exports or increased releases from storages. Solidarity measures may be particularly appropriate between Member States for which the Commission recommends the establishment of joint preventive actions plans or emergency plans at regional level.
Justification
It is worth recalling that the Treaty of Lisbon calls for the Union's energy policy to be conducted in the spirit of solidarity.
Amendment  10 Proposal for a regulation Article 1
Text proposed by the Commission	Amendment
This Regulation establishes measures aimed at safeguarding the security of gas supply so as to ensure the proper and continuous functioning of the internal market for gas by providing for a clear definition and attribution of responsibilities and for a coordination of the response at the level of the Member States and the Community regarding both preventive action and the reaction to concrete disruptions of supply.	This Regulation establishes measures aimed at safeguarding the security of gas supply so as to ensure the proper and continuous functioning of the internal market for gas by providing for a clear definition and attribution of responsibilities and for a coordination of the response at the level of natural gas undertakings, the Member States and the Community regarding both preventive action and the reaction to concrete disruptions of supply, and to constitute a practical expression of the spirit of solidarity contained in the Treaty on the Functioning of the European Union.
Justification
Reflects the spirit of solidarity between Member States which should accompany any action in case of difficulties of supply of certain products in field of energy as stipulated in the Treaty of Lisbon.
Amendment  11 Proposal for a regulation Article 2 – paragraph 2 – point 1
Text proposed by the Commission	Amendment
(1) "protected customers" means all household customers already connected to a gas distribution network, and, if the Member State concerned so decides, can also include small and medium-sized enterprises, schools and hospitals provided that they are already connected to a gas distribution network;	(1) "protected customers" means all household customers, including vulnerable customers, the definition of which is left to the Member States in accordance with Directive 2009/73/EC, schools and hospitals provided that they are already connected to a gas distribution network, and small and medium-sized enterprises provided that they are already connected to a gas distribution network to the extent that additional supply is available;
Amendment  12 Proposal for a regulation Article 3 – paragraph 1
Text proposed by the Commission	Amendment
Security of gas supply is a task of the natural gas undertakings, Competent Authorities of the Member States, the industrial gas customers, and the Commission within their respective areas of responsibility. It requires a high degree of cooperation between them.	Security of gas supply is a task of the natural gas undertakings, Competent Authorities of the Member States, the industrial gas customers, and the Commission within their respective areas of responsibility. It requires a high degree of cooperation and solidarity between them.
Justification
It is considered that the concept of costumer protection and solidarity is not fully integrated in this proposal. As this regulation concerns security of gas supply, taking into consideration customer protection and solidarity between Member States is essential for the preparation of the response to disruptions of supply.
Amendment  13 Proposal for a regulation Article 3 – paragraph 1 a (new)
Text proposed by the Commission	Amendment
	1a. Natural gas undertakings shall contribute toward the achievement of the aims of this Regulation, in particular the infrastructure standard set out in Article 6 thereof and the supply standard set out in Article 7 thereof.
Amendment  14 Proposal for a regulation Article 3 – paragraph 5 a (new)
Text proposed by the Commission	Amendment
	5a. Member States shall seek maximum diversification of delivery routes and sources of gas supply in order to optimise the physical availability of gas during supply interruptions.
Justification
For reaching a safe gas supply in Europe and a true internal market in gas, it is important that Member States not only focus on gas but also on other energy resources
Amendment  15 Proposal for a regulation Article 5 – paragraph 1 – point d
Text proposed by the Commission	Amendment
(d) information on the relevant Public Service Obligations.	(d) information on the relevant Public Service Obligations and customer protection measures as referred to in Article 3 of Directive 2009/73/EC, including national measures protecting customers from excessive price increases.
Justification
It is required that the Member States define measures that will allow them to protect customers from excessive price increases. Public Service Obligations and customer protection have a detailed definition in the directive 2009/73/EC that can be referenced here
Amendment  16 Proposal for a regulation Article 7 – paragraph 1 – introductory wording
Text proposed by the Commission	Amendment
1. The Competent Authority shall take the measures to ensure the gas supply to the protected customers of the Member State in the case of:	1. The Competent Authority shall take measures to ensure gas supply to protected customers including vulnerable customers of the Member State in the case of:
Amendment  17 Proposal for a regulation Article 7 – paragraph 2
Text proposed by the Commission	Amendment
2. The Competent Authority shall take the measures to ensure the gas supply to the protected customers for the period of sixty days also in the event of an Emergency as defined in Article 9(2). The Competent Authority shall endeavour to maintain the supply for the protected customers as long as necessary.	2. The Competent Authority shall take measures to ensure gas supply to protected customers including vulnerable customers for a period of sixty days also in the event of an Emergency as defined in Article 9(2). The Competent Authority shall endeavour to maintain supply for protected customers including vulnerable customers for as long as necessary.
Amendment  18 Proposal for a regulation Article 7 – paragraph 5
Text proposed by the Commission	Amendment
5. The Competent Authority shall ensure that conditions for supplies to protected customers are established without prejudice to the proper functioning of the internal gas market and at a price respecting the market value of the commodity.	5. The Competent Authority shall ensure that conditions for supplies to protected, including vulnerable, customers are established without prejudice to the proper functioning of the internal gas market and at a price respecting the market value of the commodity, taking into consideration the exercise of solidarity between Member States and relevant Public Service Obligations. In the event of a crisis, the Member States shall take all measures necessary to prevent excessive increases of gas prices for protected, including vulnerable, customers.
Justification
Amendment  19 Proposal for a regulation Article 7 – paragraph 5 a (new)
Text proposed by the Commission	Amendment
	5a. Member States shall ensure that all customers are informed about the supply standard set out in paragraphs 1 and 2 and customer protection measures as referred to in Directive 2009/73/EC. Member States shall cover the additional costs for necessary deliveries to vulnerable customers in the case of an Emergency as defined in Article 9(2).
Amendment  20 Proposal for a regulation Article 9 – paragraph 1 - point 7
Text proposed by the Commission	Amendment
(7) Identify the contribution of the non-market based measures planned or to be implemented for the Emergency level listed in Annex III and assess the degree to which the use of non-market based measures is necessary to cope with the crisis, assess their effects and define the procedures to implement them;	(7) Identify the contribution of the non-market based measures planned or to be implemented for the Emergency level listed in Annex III and assess the degree to which the use of non-market based measures is necessary to cope with the crisis, assess their effects and define the procedures to implement them; non-market based measures shall be used to ensure the security of gas supply only as a last resort;
Amendment  21 Proposal for a regulation Article 10 – paragraph 1
Text proposed by the Commission	Amendment
1. The Commission may declare a Community Emergency at the request of one Competent Authority or when the Community loses more than 10% of its daily gas import from third countries as calculated by ENTSO-G. It shall declare a Community Emergency where more than one Competent Authority has declared Emergency following the verification in accordance with Article 9(6). It may declare a Community Emergency for specifically affected geographical regions comprising more than one Member State.	1. The Commission shall declare a Community Emergency when the Community loses more than 10% of its daily gas import from third countries as calculated by ENTSO-G or, following verification in accordance with Article 9(6), at the request of one Competent Authority or where more than one Competent Authority has declared an Emergency. It may declare a Community Emergency for specifically affected geographical regions comprising one or more Member States.
Amendment  22 Proposal for a regulation Article 10 – paragraph 6 a (new)
Text proposed by the Commission	Amendment
	6a. When the Commission considers that, in the case of a Community Emergency, the actions taken by the Competent Authorities or natural gas undertakings are insufficient, it may directly implement the measures listed in Annexes II and III in order to restore gas supply to the affected markets.
Justification
In case of disruption of gas supply if the actions undertaken at national level turn out to be insufficient, the involvement of the European Commission is desired to ensure the security of supply to the EU as a whole. The Commission should coordinate the actions of the natural gas undertakings and national competent authorities until the normal functioning of the market is restored. However, if the voluntary actions undertaken by the national competent authorities and the natural gas undertakings in a coordinated by the EC way turn out to be ineffective, the Commission should be entitled – as a last resort - to introduce the predefined measures on its own responsibility. Those measures should be precisely limited to those which are indispensible to restore the functioning of internal market.
Amendment  23 Proposal for a regulation Article 12 – paragraph 6 – point a
Text proposed by the Commission	Amendment
a) Member States shall submit to the Commission the existing inter-governmental agreements concluded with third countries which have an impact on the development of gas infrastructures and supplies; before concluding new inter-governmental agreements, the Member States shall inform the Commission to assess their compliance with the internal market legislation;	a) Member States shall submit to the Commission the existing inter-governmental agreements concluded with third countries which have an impact on the development of gas infrastructures and supplies; before concluding new inter-governmental agreements, the Member States shall consult the Commission to assess their compliance with the internal market legislation;

PROCEDURE

Title	Security of gas supply
References	COM(2009)0363 – C7-0097/2009 – 2009/0108(COD)
Committee responsible	ITRE
Opinion by        Date announced in plenary	IMCO 14.9.2009
Rapporteur        Date appointed	Sandra Kalniete 28.9.2009
Discussed in committee	6.10.2009		5.11.2009		1.12.2009
Date adopted	2.12.2009
Result of final vote	+: –: 0:	35 2 0
Members present for the final vote	Cristian Silviu Buşoi, Lara Comi, Anna Maria Corazza Bildt, Jürgen Creutzmann, Christian Engström, Evelyne Gebhardt, Louis Grech, Małgorzata Handzlik, Iliana Ivanova, Philippe Juvin, Sandra Kalniete, Edvard Kožušník, Kurt Lechner, Toine Manders, Tiziano Motti, Gianni Pittella, Mitro Repo, Heide Rühle, Matteo Salvini, Christel Schaldemose, Andreas Schwab, Catherine Stihler, Eva-Britt Svensson, Róża, Gräfin von Thun Und Hohenstein, Kyriacos Triantaphyllides, Emilie Turunen, Bernadette Vergnaud, Barbara Weiler
Substitute(s) present for the final vote	Damien Abad, Liem Hoang Ngoc, Jacek Olgierd Kurski, Emma Mcclarkin, Antonyia Parvanova, Konstantinos Poupakis, Wim van de Camp, Anja Weisgerber, Kerstin Westphal

PROCEDURE

Title	Security of gas supply
References	COM(2009)0363 – C7-0097/2009 – 2009/0108(COD)
Date submitted to Parliament	16.7.2009
Committee responsible        Date announced in plenary	ITRE 14.9.2009
Committee(s) asked for opinion(s)        Date announced in plenary	AFET 11.11.2009		ECON 14.9.2009		ENVI 14.9.2009		IMCO 14.9.2009
Rapporteur(s)        Date appointed	Alejo Vidal-Quadras 16.9.2009
Discussed in committee	29.9.2009		2.12.2009		4.2.2010
Date adopted	18.3.2010
Result of final vote	+: –: 0:	52 0 0
Members present for the final vote	Jean-Pierre Audy, Zoltán Balczó, Bendt Bendtsen, Jan Březina, Reinhard Bütikofer, Giles Chichester, Pilar del Castillo Vera, Lena Ek, Ioan Enciu, Adam Gierek, Norbert Glante, Fiona Hall, Jacky Hénin, Romana Jordan Cizelj, Sajjad Karim, Arturs Krišjānis Kariņš, Lena Kolarska-Bobińska, Bogdan Kazimierz Marcinkiewicz, Judith A. Merkies, Angelika Niebler, Jaroslav Paška, Herbert Reul, Teresa Riera Madurell, Michèle Rivasi, Paul Rübig, Amalia Sartori, Francisco Sosa Wagner, Konrad Szymański, Patrizia Toia, Evžen Tošenovský, Ioannis A. Tsoukalas, Claude Turmes, Marita Ulvskog, Vladimir Urutchev, Adina-Ioana Vălean, Kathleen Van Brempt, Alejo Vidal-Quadras, Henri Weber
Substitute(s) present for the final vote	Lara Comi, António Fernando Correia De Campos, Rachida Dati, Ilda Figueiredo, Andrzej Grzyb, Jolanta Emilia Hibner, Oriol Junqueras Vies, Ivailo Kalfin, Marian-Jean Marinescu, Vladko Todorov Panayotov, Frédérique Ries, Silvia-Adriana Ţicău, Hermann Winkler
Substitute(s) under Rule 187(2) present for the final vote	Britta Reimers