Proposal for a Directive of the European Parliament and of the Council amending Directive 2003/54/EC as regards the application of certain provisions to Estonia
Date: 2007-07-16
Institutions: European Commission
Subjects: Estonia, approximation of laws, derogation from EU law, electrical energy, energy distribution, energy production, energy supply, energy transport, single market

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 16.7.2007 
COM(2007) 411 final 

2007/0141 (COD) 

Proposal for a 

DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL 

amending Directive 2003/54/EC as regards the application of certain provisions to 
Estonia 

(presented by the Commission) 

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EXPLANATORY MEMORANDUM 

By the Act of Accession, Estonia was granted a transitional period until 31 December 2008 for 
the application of Article 19(2) of Directive 96/92/EC, relating to the gradual opening of the 
electricity  market.  Following  an  exchange  of  information,  on  28  June  2004  the  Council 
adopted Directive 2004/85/EC amending Directive 2003/54/EC as regards the application of 
certain  provisions  to  Estonia,  which  granted  the  requested  extended  derogation  until  31 
December 2012. 

By  judgment  of  26  November  2006  the  Court  of  Justice  partially  annulled  Directive 
2004/85/EC. That partial annulment was not motivated by reasons concerning the substance 
of Directive 2004/85/EC, but was due to the choice of legal basis by the Council (Article 57 
of  the  Treaty  of  Accession  instead  of  Article  95  of  the  EC  Treaty).  Since  the  reasons  for 
granting  Estonia  a  derogation  from  the  application  of  Article  21(1)(b)  and  (c)  (market 
opening)  of  Directive  2003/54/EC  going  beyond  31 December  2008  remain  valid,  that 
Directive should be amended accordingly, with the same wording as in Directive 2004/85/EC 
but on the appropriate legal basis. 

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2007/0141 (COD) 

Proposal for a 

DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL 

amending Directive 2003/54/EC as regards the application of certain provisions to 
Estonia 

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION, 

Having  regard  to  the  Treaty  establishing  the  European  Community,  and  in  particular  Articles 
47(2), Article 55 and Article 95 thereof, 

Having regard to the proposal from the Commission1, 

Having regard to the Opinion of the European Economic and Social Committee2, 

Having consulted the Committee of the Regions3, 

Acting in accordance with the procedure laid down in Article 251 of the Treaty4, 

Whereas: 

(1) 

(2) 

(3) 

(4) 

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2 
3 
4 
5 
6 

During  the  accession  negotiations,  Estonia  invoked  the  specific  characteristics  of  its 
electricity  sector  to  request  a  transitional  period  for  the  application  of  Directive 
96/92/EC  of  the  European  Parliament  and  of  the  Council  of  19  December  1996 
concerning common rules for the internal market in electricity5. 

In Annex VI of the Act of Accession, Estonia was granted a transitional period until 31 
December 2008 for the application of Article 19(2) of Directive 96/92/EC, relating to 
the gradual opening of the market. 

Declaration  No  8  annexed  to  the  Treaty  of  Accession  recognised  moreover  that  the 
specific situation relating to the restructuring of the oil shale sector in Estonia was going 
to require particular efforts until the end of 2012. 

Directive  96/92/EC  was  replaced  by  Directive  2003/54/  EC  of  the  European 
Parliament  and  of  the  Council  of  26  June  2003  concerning  common  rules  for  the 
internal  market  in  electricity  and  repealing  Directive  96/92/EC6,  which  had  to  be 

...  
...  
...  
…  
OJ L 27, 30.1.1997, p. 20. 
OJ L 176, 15.7.2003, p. 37. Directive as amended by Directive 2004/85/EC (OJ L 236, 7.7.2004, p. 10). 

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implemented by 1 July 2004 and which had the effect of speeding up the opening of the 
electricity market. 

(5) 

(6) 

(7) 

(8) 

By  letter  of  17  September  2003,  Estonia  transmitted  a  request  aimed  at  not  applying 
Article 21(1)(b) of Directive 2003/54/EC, on the opening of the market to non-household 
customers,  until  31  December  2012.  In  a  further  letter  of  5  December  2003,  Estonia 
indicated that it was planning to achieve the complete opening of the market provided for 
in Article 21(1)(c) of that Directive by 31 December 2015. 

The request by Estonia was based on a credible restructuring plan for the oil shale sector 
extending until 31 December 2012. 

Oil shale is the only real indigenous energy resource in Estonia and national production 
represents almost 84 % of world production. 90 % of the electricity produced in Estonia is 
from this solid fuel. It is therefore of great strategic importance for security of supply in 
Estonia. 

The granting of a further derogation for the period 2009 to 2012 appeared necessary to 
guarantee  security  of  investments  in  generating  plants  and  security  of  supply  in 
Estonia while allowing the serious environmental problems created by those plants to 
be resolved. 

(9) 

On  28  June  2004  the  Council  adopted  Directive  2004/85/EC,  which  granted  the 
requested derogation. 

(10)  By judgment of 28 November 2006 in Case C-413/04, Parliament/Council7, the Court 
of Justice annulled Directive 2004/85/EC, in so far as it granted Estonia a derogation 
from the application of Article 21(1)(b) and (c) of Directive 2003/54/EC going beyond 
31 December  2008  and  imposed  a  corresponding  obligation  to  ensure  only  a  partial 
opening  of  the  market  representing  35%  of  consumption  on  1  January  2009  and  an 
obligation  to  communicate  annually  the  consumption  thresholds  extending  eligibility 
to final customers. 

(11)  That  partial  annulment  was  not  motivated  by  reasons  concerning  the  substance  of 

Directive 2004/85/EC, but was due to the wrong choice of legal basis. 

(12)  Since  the  reasons  for  granting  Estonia  a  derogation  from  the  application  of  Article 
21(1)(b)  and  (c)  of  Directive  2003/54/EC  going  beyond  31 December  2008  remain 
valid,  that  Directive  should  be  amended  accordingly,  with  the  same  wording  as  in 
Directive 2004/85/EC but on the appropriate basis, 

HAVE ADOPTED THIS DIRECTIVE: 

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ECR [2006] I-11221. 

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Article 26(3) of Directive 2003/54/EC is replaced by the following: 

Article 1 

‘3. Estonia shall be granted a temporary derogation from the application of Article 21(1)(b) and 
(c) until 31 December 2012. Estonia shall take the measures necessary to ensure the opening of its 
electricity market. This shall be carried out gradually over the reference period with the aim of 
complete  opening  of  the  market  by  1  January  2013.  On  1  January  2009,  the  opening  of  the 
market must represent at least 35% of consumption. Estonia shall communicate annually to the 
Commission the consumption thresholds extending eligibility to final customers.’ 

Article 2 

Member  States  shall  bring  into  force  the  laws,  regulations  and  administrative  provisions 
necessary  to  comply  with  this  Directive  by  1  July  2007  at  the  latest.  They  shall  forthwith 
communicate to the Commission the text of those provisions.  

When Member States adopt those provisions, they shall contain a reference to this Directive or be 
accompanied  by  such  a  reference  on  the  occasion  of  their  official  publication.  Member  States 
shall determine how such reference is to be made. 

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

Article 3 

Article 4 

This Directive is addressed to the Member States. 

Done at Brussels,  

For the European Parliament 
The President 

For the Council 
The President 

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