EXPLANATORY MEMORANDUM

1.CONTEXT OF THE PROPOSAL

On 16 October 2015 the Ministerial Council of the Energy Community adopted a Decision on the implementation of the Regulation (EU) No 347/2013 of the European Parliament and of the Council on guidelines for trans-European energy infrastructure. The purpose of this measure was to create a legal framework for prioritising key energy infrastructure projects among Contracting Parties and between Contracting Parties and EU Member States.

Regulation (EU) No 347/2013 as adopted in the Energy Community sets a comprehensive framework for streamlining the permitting, regulatory and cost-allocation procedures in Contracting Parties. It also requires, subject to a number of criteria, a Ministerial Council Decision to establish under Title III of the Energy Community Treaty a list of priority infrastructure projects called projects of Energy Community interest (PECI). The final transposition deadline for main provisions of the Regulation and deadline for establishment of the list of PECI is 31 December 2016.

The list of projects in annex 2 to this decision has been submitted by the project promotors and submitted for the public consultation by the Secretariat of the Energy Community. It is under scrutiny by the Energy Community institutions as foreseen by the Regulation. The Commission is informing the Council about any developments regarding this process. The Commission will propose final position of the European Union on the Decision of the Ministerial Council adopting the list of projects of Energy Community interest in the course of preparations for the Ministerial Council in Sarajevo on 14 October 2016.

The Regulation (EU) No 347/2013 also gives a possibility to apply the provisions of the Regulation to projects of mutual interest (PMI). These projects are projects that benefit two neighbouring states (Contracting Party on one and Member State on another side) but do not have the legal status of a project of Energy Community interest. At the same time these projects are supported by Contracting Parties and a Member States concerned. Regarding such projects and in addition to the proposal for a legally binding decision on PECIs, the Commission proposes that the EU proposes to the Ministerial Council of the Energy Community to issue a Recommendation to give a political impetus and undertake all necessary regulatory measures in order to progress with the realisation of PMIs.

2.LEGAL BASIS, SUBSIDIARITY AND PROPORTIONALITY

Under Article 7 paragraph 5 (a) of the Decision of the Ministerial Council on the implementation of the Regulation (EU) No 347/2013 the Ministerial Council shall establish the list of projects of the Energy Community interest by way of a Decision under Title III of the Energy Community Treaty.

Under Article 82 of the Energy Community Treaty the Ministerial Council shall take measures under Title III on a proposal from a Party or the Secretariat. The Commission proposes to submit on behalf of the European Union such a proposal to the Ministerial Council of the Energy Community.

The position of the European Union on the decision of the Ministerial Council needs to be established pursuant to Article 218(9) of the Treaty on the Functioning of the European Union and in accordance with the provisions of Council Decision 2006/500/EC of 29 May 2006 on the conclusion by the European Community of the Energy Community Treaty.

In line with Article 76 of the Energy Community Treaty the Recommendation of the Ministerial Council is legally non-binding and therefore falls outside of the scope of Article 218(9) TFEU. The text of the Recommendation is attached to this decision for information.

The Procedural Act governing the proceedings in the Ministerial Council requires submitting documents two months before the Ministerial Council meeting i.e. by 13 of August 2016.