WRITTEN QUESTION E-2259/01 by Piia-Noora Kauppi (PPE-DE) to the Commission. Diversity in the energy sector and security of supply.
Date: 2001-07-31
Institutions: European Parliament, Provisional data
Subjects: European Union, Northern Europe, energy policy, fuel oil, security of supply, tax harmonisation, tax system

18.4.2002

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Official Journal of the European Communities

C 93 E/89

Answer given by Mrs Wallström on behalf of the Commission

(24 October 2001)

According to the Commission’s information, the Ministry of Development is, within the context of the
liberalisation of the energy market, supporting private energy production initiatives. This support is being
given through the Competitiveness operational programme: a call for expressions of interest has been
launched, and selected projects will be co-financed under the programme via the national aid scheme. The
project in question is one of those being proposed.

On the face of it, the dam does not conflict with Community legislation. Nonetheless, a full environmental
impact assessment will have to be carried out and environmental conditions approved before the project
goes ahead. This study will have to take account of existing tourist development in the region. Should it
transpire that construction of the dam would be detrimental to the ‘development of alternative forms of
tourism’ mentioned by the Honourable Member, account would have to be taken of
this in the
environmental conditions, and compensatory/remedial measures imposed.

(2002/C 93 E/108)

WRITTEN QUESTION E-2259/01

by Piia-Noora Kauppi (PPE-DE) to the Commission

Subject: Diversity in the energy sector and security of supply

(31 July 2001)

to be an essential

in competition terms,

the Commission considers harmonisation of

In its Green Paper on energy supply strategy (1)
the
Community’s energy taxation,
for preventing
distortions in the energy sector. Energy consumption already varies between the Member States both
because of the structure of industry and because of everyday energy requirements. The Scandinavian
countries, for example, have developed efficient and environmentally friendly energy production thanks to
their northerly geographical situation, with a view to achieving diversity in the energy sector and thus
security of energy supply. The work which has been done in terms of development is already visible as a
significant improvement in the environment, greater efficiency of energy consumption and the continual
renewal of the infrastructure of production installations. Excessively high taxation would have a negative
effect on the development of industry and energy production and thus also on the environment.

instrument

That energy taxation thus has an effect in regulating behaviour can be seen for example in the energy
taxation decisions made in Finland in 1997, when tax on domestic biofuel was increased. This very recent
information unfortunately does not appear in this Green Paper. As a result of past taxation decisions the
use of local fuel dropped by as much as a third from 1997 to 2000. At the same time the use of imported
fuel and imported energy increased. This cannot surely be the objective of harmonising fuel taxation. On
the contrary, as I understand it the objective of the Green Paper was to increase the EU’s self-sufficiency in
energy. One threat being conjured up is that the share of imported energy may grow to as much as 70 %
by 2030. However, in Finland, for example, imported energy accounts for 72 % of the total, even higher
than the EU’s own ‘horror’ scenario. So energy taxation is an important matter, and in harmonising it the
Member States must be allowed some freedom of movement.

1.
How can the purchase of imported energy within the Community be treated equitably and in such a
way that industry in the northern Member States and in locations involving long-distance transport is not
forced into an unfavourable position?

2.

How can the development and special position of local energy production be secured?

How can the northern dimension and security of supply in the Baltic region be coordinated with

3.
security of energy supply for the whole EU?

(1) COM(2000) 769.

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Official Journal of the European Communities

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18.4.2002

Answer given by Mme de Palacio on behalf of the Commission

(22 October 2001)

The analysis of energy imports in the Commission’s Green Paper on the security of energy supply assesses
the situation for the Community as a whole. In fact, almost half of the Member States have a level of
import dependence of 70 % or over. However, this is counterbalanced by the use of indigenous reserves,
mainly of fossil fuel, in some Member States. Reducing the exposure to risks arising from high levels of
energy imports, including from more distant destinations, is one of the themes of the Commission’s Green
Paper. Among the most promising policy instruments are improved energy efficiency, energy saving and
exploitation of indigenous renewable resources.

In terms of pricing, the production, transport and distribution of energy, whether imported or domestic, is
a matter of commercial arrangements between privately or publicly owned companies. This means that the
price of imported energy is determined by taking into account the costs involved and the specific features
of the respective energy market and energy sector. The fiscal regime covering production, import and use
of energy is broadly left to the discretionary powers of Member States; except in the case of mineral oil
products, where Council Directives 92/81/EEC of 19 October 1992 on the harmonization of the structures
of excise duties on mineral oils (1) and 92/82/EEC of 19 October 1992 on the approximation of the rates
of excise duties on mineral oils (1) establish a set of rules, including minimum tax rates. Actual gross tax
rates in the Scandinavian countries significantly exceed these minimum rates.

As the Commission points out in its Green Paper, taxes on energy products vary from product to product
and from Member State to Member State. This situation is not always consistent with the aims of the
internal market and often runs counter to the objectives of environmental policy. To address this problem,
the Commission in 1997 made a proposal (2) to restructure the Community framework for the taxation of
energy products which would increase minimum rates for mineral oil products and widen coverage to
include more products, such as electricity, natural gas or coal, thus reducing distortions. This proposal is
stalled in the Council.

The development of local energy resources is an important instrument in securing reliable energy supplies
and can make a positive impact on the local economy. However, its environmental impact also needs to be
considered. It is important that local energy production can develop within a secure environment and
economic framework, while being flexible enough to adapt to local circumstances and needs. Member
States have set up specific regimes, adapted to national requirements, for the exploration and production
of domestic energy sources, in particular renewables. The efficient exploitation of renewable sources plays
a significant role in increasing local energy production and in enhancing the energy supply security of
more remote areas. The Commission’s proposal (3) for a more proactive approach to renewable electricity
production adopted last July 2001 should help to contribute to the speedier adoption of renewable energy
technologies across the Community. Likewise, the Gas (4) and Electricity (5) directives designed to liberalise
the European gas and electricity market with a view to establishing a single energy market aim to prevent
discrimination against smaller, local suppliers.

Most of the states in the Baltic region are Member States or intend to join the Union in the foreseeable
future. In its report on the progress achieved in the framework of the ‘Action Plan on the Northern
Dimension’, adopted by the European Council of Feira (19 and 20 June 2000), the Commission underlined
the importance of energy for the Northern Dimension. Increasing emphasis will be put on security of
supply. Regular meetings and close co-operation between Commission and relevant organisations/
institutions representing the Northern Dimension countries ensure that the requirements of security of
supply and other relevant topics of the energy sphere are appropriately dealt with and integrated into the
overall security of supply policy of the Union.

With regard to security of energy supply, the Commission’s Green Paper analyses the energy supply
situation for the current 15 Member States as well as for an enlarged Union with 30 Member States, which
It marks the first stage in establishing a strategic framework for
includes most Baltic region states.

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sustainable and secure energy supplies for the whole of an enlarged Union. Security of supply in more
remote areas will be an important aspect of such a strategy. The Green Paper confirms the essential
importance of the Northern Dimension in regard to the Union’s energy supplies and invites all interested
partners to contribute to the debate; the outcome of this process will undoubtedly influence future
activities in the Northern Dimension energy area.

(1) OJ L 316, 31.10.1992.
(2) OJ C 139, 6.5.1997.
(3) COM(2001) 445 final.
(4) http://europa.eu.int/comm/energy/en/gas_single_market/index_en.html.
(5) http://europa.eu.int/comm/energy/en/elec_single_market/index_en.html.

(2002/C 93 E/109)

WRITTEN QUESTION E-2260/01

by Piia-Noora Kauppi (PPE-DE) to the Commission

(31 July 2001)

Subject: Local authorities on the Union’s external borders not consulted by the Commission in preparing

its communication

In the conclusions of the Nice summit the Commission was called upon to propose a programme for the
EU’s frontier regions in order to strengthen their economic competitiveness. The Commission has in fact
prepared a communication in which it considers the effects of enlargement in these areas and sets out its
proposals. The communication is expected to be published in July, and to contain the following elements:
in particular sectors; assessment of existing
situation of border areas and effects of enlargement
Community instruments; proposals for Community actions in border areas (basic structural investment in
the context of the Trans-European Networks, EIB loans, support for SMEs and in particular cross-border
cooperation,
improving coordination between Phare/cross-border cooperation and Interreg, enhancing
information, improving exploitation of training programmes, and the creation of a border areas task force
within the Commission). The proposals will only be submitted for discussion to the Council when the
relevant Member States’ reactions have been heard.

This is an important programme which will affect the municipalities on the Union’s external borders
closely. In spite of this, their opinions were not heard during the preparation of the programme.

Why did the Commission fail to carry out consultation at local level when preparing this programme?

Answer given by Mr Verheugen on behalf of the Commission

(28 September 2001)

On 25 July 2001, the Commission adopted a Communication on the impact of enlargement on the border
regions adjacent to candidate countries including a Community Action for Border Regions (1).

The Communication is based on thorough analysis of border regions covering three main areas:

F the socio-economic situation of border regions and the likely effects of enlargement;

F existing Community support to border regions;

F possible measures to strengthen the competitiveness of border regions.