Council Directive 2004/67/EC of 26 April 2004 concerning measures to safeguard security of natural gas supply (Text with EEA relevance)
Date: 2004-04-26
Institutions: Council of the European Union
Subjects: natural gas, security of supply

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Official Journal of the European Union

29.4.2004

COUNCIL DIRECTIVE 2004/67/EC

of 26 April 2004

concerning measures to safeguard security of natural gas supply

(Text with EEA relevance)

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European Com-
munity, and in particular Article 100 thereof,

Having regard to the proposal from the Commission (1),

Having regard to the opinion of the European Economic and
Social Committee (2),

After consulting the Committee of the Regions,

Having regard to the opinion of the European Parliament (3),

Whereas:

(1)

(2)

(3)

Natural gas (gas) is becoming an increasingly important
component in Community energy supply, and, as indi-
cated in the Green Paper ‘Towards a European strategy
for the security of energy supply’, the European Union is
expected in the longer term to become increasingly
dependent on gas imported from non-EU sources of
supply.

Following Directive 98/30/EC of the European Parlia-
ment and of the Council of 22 June 1998 concerning
common rules for the internal market in natural gas (4)
and Directive 2003/55/EC of the European Parliament
and of
the Council of 26 June 2003 concerning
common rules for the internal market in natural gas and
repealing Directive 98/30/EC (5),
the Community gas
market
regarding
is being liberalised. Consequently,
security of supply, any difficulty having the effect of
reducing gas supply could cause serious disturbances in
the economic activity of the Community; for this reason,
there is a growing need to ensure security of gas supply.

The completion of the internal gas market necessitates a
minimum common approach to security of supply, in
particular through transparent and non-discriminatory
security of supply policies compatible with the require-
ments of such a market, in order to avoid market distor-
tions. Definition of clear roles and responsibilities of all
market players
in safeguarding
security of gas supply and the well-functioning of the
internal market.

therefore crucial

is

(1) OJ C 331 E, 31.12.2002, p. 262.
(2) OJ C 133, 6.6.2003, p. 16.
(3) Opinion not yet published in the Official Journal.
(4) OJ L 204, 21.7.1998, p. 1.
(5) OJ L 176, 15.7.2003, p. 57.

(4)

(5)

(6)

(7)

(8)

(9)

Security of supply obligations imposed on companies
should not impede the well functioning of the internal
market and should not impose unreasonable and dispro-
portionate burden on gas market players, including new
market entrants and small market players.

In view of the growing gas market in the Community, it
is important that the security of gas supply is main-
tained, in particular as regards household customers.

if appropriate,

for Member States,

instruments are available for the
A large choice of
industry and,
to
comply with the security of supply obligations. Bilateral
agreements between Member States could be one of the
means to contribute to the achievement of the minimum
security of supply standards, having due regard to the
in particular Article
Treaty and secondary legislation,
3(2) of Directive 2003/55/EC.

Indicative minimum targets for gas storage could be set
either at national level or by the industry. It is under-
stood that this should not create any additional invest-
ment obligations.

Considering the importance of securing gas supply, i.e.
on the basis of long-term contracts, the Commission
should monitor the developments on the gas market on
the basis of reports from Member States.

In order to meet growing demand for gas and diversify
gas supplies as a condition for a competitive internal gas
market, the Community will need to mobilise significant
additional volumes of gas over the coming decades
much of which will have to come from distant sources
and transported over long distances.

(10)

The Community has a strong common interest with gas
supplying and transit countries in ensuring continued
investments in gas supply infrastructure.

(11)

Long-term contracts have played a very important role
in securing gas supplies for Europe and will continue to
do so. The current
long term contracts is
adequate on the Community level, and it is believed that
such contracts will continue to make a significant contri-
bution to overall gas supplies as companies continue to
include such contracts in their overall supply portfolio.

level of

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Considerable progress has been made in developing
liquid trading platforms
release
programmes at national level. This trend is expected to
continue.

and through gas

HAS ADOPTED THIS DIRECTIVE:

(12)

(13)

establishment of

The
solidarity between
Member States in major emergency supply situations is
essential, even more so as Member States become
increasingly interdependent regarding security of supply.

genuine

(14)

The sovereign rights of Member States over their own
natural resources are not affected by this Directive.

(15) A Gas Coordination Group should be established, which
should facilitate coordination of
supply
measures at Community level in the event of a major
supply disruption, and may also assist member States in
coordinating measures taken at a national level. In addi-
tion, it should exchange information on security of gas
supply on a regular basis, and should consider aspects
relevant in the context of a major supply disruption.

security of

(16) Member States should adopt and publish national emer-

gency provisions.

(17)

(18)

(19)

This Directive should provide rules applicable in the
event of a major supply disruption;
the foreseeable
length of such a supply disruption should cover a signifi-
cant period of time of at least eight weeks.

Regarding the handling of a major supply disruption,
this Directive should provide for a mechanism based on
a three step approach. The first step would involve the
reactions of the industry to the supply disruption; if this
were not sufficient, Member States should take measures
to solve the supply disruption. Only if the measures
taken at stage one and two have failed should appro-
priate measures be taken at Community level.

Since the objective of this Directive, namely ensuring an
adequate level for the security of gas supply, in particular
in the event of a major supply disruption, whilst contri-
buting to the proper functioning of the internal gas
in all circumstances, be sufficiently
market, cannot,
achieved by the Member States, particularly in light of
the increasing interdependency of the Member States
regarding security of gas supply, and can therefore, by
reason of the scale and effects of the action, be better
achieved at Community level,
the Community may
in accordance with the principle of
adopt measures,
subsidiarity as set out in Article 5 of the Treaty.
In
accordance with the principle of proportionality, as set
out in that Article, this Directive does not go beyond
what is necessary in order to achieve that objective,

Article 1

Objective

This Directive establishes measures to safeguard an adequate
level for the security of gas supply. These measures also contri-
bute to the proper functioning of the internal gas market. It
establishes a common framework within which Member States
and non-discriminatory
transparent
shall define
security of supply policies compatible with the requirements of
a competitive internal gas market; clarify the general roles and
responsibilities of the different market players and implement
specific non-discriminatory procedures to safeguard security of
gas supply.

general,

Article 2

Definitions

For the purpose of this Directive:

1.

‘long-term gas supply contract’ means a gas supply contract
with a duration of more than 10 years;

2.

‘major supply disruption’ shall mean a situation where the
Community would risk to lose more than 20 % of its gas
supply from third countries and the situation at Community
level is not likely to be adequately managed with national
measures.

Article 3

Policies for securing gas supply

1.
to
In establishing their general policies with respect
ensuring adequate levels of security of gas supply, Member
States shall define the roles and responsibilities of the different
gas market players in achieving these policies, and specify
adequate minimum security of supply standards that must be
complied with by the players on the gas market of the Member
State in question. The standards shall be implemented in a non-
discriminatory and transparent way and shall be published.

2. Member States shall take the appropriate steps to ensure
that the measures referred to in this Directive do not place an
unreasonable and disproportionate burden on gas market
players and are compatible with the requirements of a competi-
tive internal gas market.

A non-exhaustive list of instruments for the security of

3.
gas supply is given in the Annex.

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Article 4

(b) the levels of storage capacity;

Security of supply for specific customers

1. Member States shall ensure that supplies for household
customers inside their territory are protected to an appropriate
extent at least in the event of:

(a) a partial disruption of national gas supplies during a period
to be determined by Member States taking into account
national circumstances;

(b) extremely cold temperatures during a nationally determined

peak period;

(c) periods of exceptionally high gas demand during the
coldest weather periods statistically occurring every 20
years,

These criteria are referred to in this Directive as ‘security of
supply standards’.

2. Member States may extend the scope of paragraph 1 in
particular to small and medium-sized enterprises and other
customers that cannot switch their gas consumption to other
energy sources,
including measures for the security of their
national electricity system if it depends on gas supplies.

3.
A non-exhaustive list in the Annex sets out examples of
instruments which may be used in order to achieve the security
of supply standards.

4. Member States, having due regard to the geological condi-
tions of their territory and the economic and technical feasi-
bility, may also take the necessary measures to ensure that gas
storage facilities located within their territory contribute to an
appropriate degree to achieving the security of supply stan-
dards.

If an adequate level of

5.
interconnection is available,
Member States may take the appropriate measures in coopera-
tion with another Member State, including bilateral agreements,
to achieve the security of supply standards using gas storage
facilities
located within that other Member State. These
measures, in particular bilateral agreements, shall not impede
the proper functioning of the internal gas market.

6. Member States may set or require the industry to set indi-
cative minimum targets for a possible future contribution of
storage, either located within or outside the Member State, to
security of supply. These targets shall be published.

Article 5

Reporting

1.
In the report published by Member States pursuant to
Article 5 of Directive 2003/55/EC, Member States shall also
cover the following:

(a) the competitive impact of the measures taken pursuant to

Articles 3 and 4 on all gas market players;

(c) the extent of long-term gas supply contracts concluded by
companies established and registered on their territory, and
in particular their remaining duration, based on informa-
tion provided by the companies concerned, but excluding
commercially sensitive information, and the degree of
liquidity of the gas market;

(d) the regulatory frameworks to provide adequate incentives
for new investment in exploration and production, storage,
LNG and transport of gas, taking into account Article 22 of
Directive 2003/55/EC as
implemented by the
Member State.

far as

2.
This information shall be considered by the Commission
in the reports that it issues pursuant to Article 31 of Directive
2003/55/EC in the light of the consequences of that Directive
for the Community as a whole and the overall efficient and
secure operation of the internal gas market.

Article 6

Monitoring

The Commission shall monitor, on the basis of

1.
reports referred to in Article 5(1):

the

(a) the degree of new long-term gas supply import contracts

from third countries;

(b) the existence of adequate liquidity of gas supplies;

(c) the level of working gas and of the withdrawal capacity of

gas storage;

(d) the level of interconnection of the national gas systems of

Member States;

(e) the foreseeable gas supply situation in function of demand,
supply autonomy and available supply sources at Com-
munity level concerning specific geographic areas in the
Community.

2. Where the Commission concludes that gas supplies in the
Community will be insufficient to meet foreseeable gas demand
in the long term, it may submit proposals in accordance with
the Treaty.

3.
By 19 May 2008 the Commission shall submit a review
report to the European Parliament and the Council on the
experience gained from the application of this Article.

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Article 7

Gas Coordination Group

1.
A Gas Coordination Group is hereby established in order
to facilitate the coordination of security of supply measure (the
Group).

The Group shall be composed of the representatives of
2.
Member States and representative bodies of
the industry
concerned and of relevant consumers, under the chairmanship
of the Commission.

3.

The Group shall adopt its Rules of Procedure.

Article 8

National emergency measures

1. Member States shall prepare in advance and,
if appro-
priate, update national emergency measures and shall commu-
nicate these to the Commission. Member States shall publish
their national emergency measures.

2. Member States' emergency measures shall ensure, where
appropriate, that market players are given sufficient opportu-
nity to provide an initial response to the emergency situation.

3.
Subject to Article 4(1), Member States may indicate to the
Chair of the Group events which they consider, because of
their magnitude
cannot be
exceptional
and
adequately managed with national measures.

character,

Article 9

Community mechanism

If an event occurs that is likely to develop into a major
1.
supply disruption for a significant period of time, or in the case
of an event indicated by a Member State according to Article
8(3), the Commission shall convene the Group as soon as
possible, at the request of a Member State or on its own initia-
tive.

2.
The Group shall examine, and, where appropriate, assist
the Member States in coordinating the measures taken at
national level to deal with the major supply disruption.

In carrying out its work, the Group shall take full account

3.
of:

(a) the measures taken by the gas industry as a first response

to the major supply disruption;

(b) the measures taken by Member States, such as those taken
including relevant bilateral agree-

pursuant to Article 4,
ments.

4. Where the measures taken at national level referred to in
paragraph 3 are inadequate to deal with the effects of an event
referred to in paragraph 1, the Commission may, in consulta-
tion with the Group, provide guidance to Member States
regarding further measures to assist those Member States parti-
cularly affected by the major supply disruption.

5. Where the measures taken at national level pursuant to
paragraph 4 are inadequate to deal with the effects of an event
referred to in paragraph 1, the Commission may submit a
proposal to the Council regarding further necessary measures.

Any measures at Community level referred to in this
6.
Article shall contain provisions aimed at ensuring fair and equi-
table compensation of
the undertakings concerned by the
measures to be taken.

Article 10

Monitoring of implementation

1.
By 19 May 2008, the Commission shall, in the light of
the manner in which Member States have implemented this
Directive, report on the effectiveness of the instruments used
with regard to Article 3 and 4 and their effect on the internal
gas market and on the evolution of competition on the internal
gas market.

the results of

In the light of

2.
this monitoring, where
appropriate, the Commission may issue recommendations or
present proposals
to enhance
security of supply.

regarding further measures

Article 11

Transposition

Member States shall bring into force the laws, regulations and
administrative provisions necessary to comply with this Direc-
tive by 19 May 2006. They shall forthwith communicate to the
Commission the text of those provisions and a correlation table
between those provisions and this Directive.

When Member States adopt these measures, they shall contain
a reference to this Directive or be accompanied by such a refer-
ence on the occasion of their official publication. The methods
of making such reference shall be laid down by Member States.

Article 12

Entry into force

This Directive shall enter into force on the 20th day following
that of its publication in the Official Journal of the European
Union.

Article 13

This Directive is addressed to the Member States.

Done at Luxembourg, 26 April 2004.

For the Council

The President

J. WALSH

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Non-exhaustive list of instruments to enhance the security of gas supply referred to in Article 3(3) and
Article 4(3)

ANNEX

— working gas in storage capacity,

— withdrawal capacity in gas storage,

— provision of pipeline capacity enabling diversion of gas supplies to affected areas,

— liquid tradable gas markets,

— system flexibility,

— development of interruptible demand,

— use of alternative back-up fuels in industrial and power generation plants,

— cross-border capacities,

— cooperation between transmission system operators of neighbouring Member States for coordinated dispatching,

— coordinated dispatching activities between distribution and transmission system operators,

— domestic production of gas,

— production flexibility,

— import flexibility,

— diversification of sources of gas supply,

— long term contracts,

— investments in infrastructure for gas import via regasification terminals and pipelines.