COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS On security of energy supply and international cooperation - &quot;The EU Energy Policy: Engaging with Partners beyond Our Borders&quot;
Date: 2011-09-07
Institutions: European Commission
Subjects: Russia, cooperation agreement, energy supply, gas supply, oil pipeline, security of supply, single market, third country, trans-European network

EUROPEAN COMMISSION 

Brussels, 7.9.2011 
COM(2011) 539 final 

COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN 
PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL 
COMMITTEE AND THE COMMITTEE OF THE REGIONS 

On security of energy supply and international cooperation - "The EU Energy Policy: 
Engaging with Partners beyond Our Borders" 

{SEC(2011) 1022 final} 
{SEC(2011) 1023 final} 

 
 
 
 
  
 
COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN 
PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL 
COMMITTEE AND THE COMMITTEE OF THE REGIONS 

On security of energy supply and international cooperation - "The EU Energy Policy: 
Engaging with Partners beyond Our Borders" 

INTRODUCTION 

Secure,  sustainable  and  competitive  energy  is  of  fundamental  importance  to  the  EU's 
economy,  industry  and  citizens  and  a  core  goal  of  EU  policy.  To  achieve  this  goal,  the  EU 
needs  adequate  instruments  to  act  within  the  EU  and  to  promote  its  interests  in  relation  to 
third countries. 

The  EU  external  energy  policy  is  crucial  to  complete  the  internal  energy  market.  Past 
experience proved that bilateral energy relations between individual Member States and third 
supplier or transit countries can result in a fragmentation of the internal market rather than a 
strengthening of the EU's energy supply and competitivity. The regulatory framework which 
has  been  progressively  put  in  place  at  the  EU  level  entails  important  consequences  towards 
partner  countries  such  as  in  the  field  of  network  access,  safety  and  competition  provisions. 
With  the  2014  deadline  set  by  the  European  Council  to  complete  the  internal  market  for 
electricity and gas, it is urgent to fully unfold its external dimension. 

Energy is a global business. The EU imports over 60% of its gas and over 80% of its oil. It 
faces  growing  competition  for  fossil  fuel  resources,  including  from  emerging  countries  and 
energy producers themselves. Growing population and rising standards of living could push 
global  energy  demand  up  by  40%  by  2030.  Energy  production  and  use  threaten  climate 
systems as well as the environment and human health. Rising energy demand is pushing up 
global  prices,  bringing  energy  poverty  to  many  and  playing  havoc  in  countries  where  fossil 
fuel subsidies are prevalent. 

In this complex reality, the EU needs to take a strong, effective and equitable position on the 
international stage to secure the energy it needs, while promoting free and transparent energy 
markets and contributing to greater security and sustainability in energy production and use. 
International  solutions  in  the  energy  sector  are  also  needed  to  achieve  EU  and  global 
objectives for reducing global greenhouse gas emissions. 

Since  the  last  Communication  from  the  Commission  on  external  energy  relations,1  the 
political  and  legal  frameworks  for  EU  energy  policy  have  been  transformed.  The  Lisbon 
Treaty set out clear objectives for the EU energy policy, further developed in the Europe 2020 
strategy.2  It  is  evident  that  the  EU  cannot  reach  these  objectives  without  adequately 
addressing the external dimension. 

1 
2 

COM (2006) 590 final. 
COM(2010) 2020 final. 

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The  EU,  instead,  must  build  on  the  strength  of  its  market,  expanding  links  between  the 
European energy network and neighbouring countries3 and creating a wider regulatory area, 
beneficial  for  all.  This  will  require,  first  and  foremost,  a  regular  information  exchange  on 
intergovernmental  agreements  concluded  and  planned  by  Member  States.  Recent  examples 
have demonstrated the merits of such European approach. 

The Council has recognised the need for new initiatives to develop mutually beneficial energy 
partnerships with key players on all subjects of common interests, including energy security, 
investments  in  sustainability  and  environmental protection, low-carbon technologies, energy 
efficiency and nuclear safety. This Communication proposes concrete ways to extend energy 
cooperation  beyond  the  mere  physical  security  of  imports.  It  is  compatible  with  and  builds 
upon  the  December  2003  European  Security  Strategy,  as  reviewed  by  the  December  2008 
European Council.4 

Such partnerships and the EU engagement in global fora such as the G-20 must also promote 
more sustainable energy policies in third countries, while improving market transparency and 
easing  international  market  volatility  and  working  toward  a  global  energy  market  less 
vulnerable to supply shocks and disruptions. In this way the policy should help strengthen the 
EU's resistance to external energy events. 

In its relations with developing and least developed countries, the EU can provide a valuable 
contribution to economic development and poverty alleviation by making sustainable energy 
and access thereto a priority for its development policy. The EU is uniquely placed to promote 
reform measures, infrastructure development and sustainable energy policies while addressing 
this key development bottleneck. 

Member States, the European Parliament and the EU citizens have repeatedly called for the 
EU to speak  with  a common voice when it comes to external energy relations.  The EU  has 
shown that when it comes together it can achieve results which no Member State alone could 
reach. These strengths must be further exploited and transformed into a systematic approach. 
Further  steps  to  enhance  the  coherence  of  the  EU  and  Member  States'  action  are  urgently 
needed, not in the least because of the importance of energy in the EU's overall political and 
economic relations with a number of third countries. 

The Energy 2020 strategy5 identified strengthening the external dimension of the EU energy 
policy as one of the key priorities in the coming years. This message was reemphasised by the 
European Council last February. The comprehensive approach set out in this document aims 
at meeting these expectations. 

Accordingly, this Communication proposes to further develop an external energy policy with 
the following priorities: 

−  Building up the external dimension of our internal energy market; 

−  Strengthening partnerships for secure, safe, sustainable and competitive energy; 

3 

Candidate  countries,  potential  candidates  from  the  Western  Balkans  and  the  sixteen  neighbouring 
countries under the European Neighbourhood Policy. 
http://www.consilium.europa.eu/uedocs/cmsUpload/78367.pdf  

4 
and http://www.consilium.europa.eu/ueDocs/cms_Data/docs/pressdata/EN/reports/104630.pdf 
5 

COM(2010) 639 final. 

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− 

Improving access to sustainable energy for developing countries; and 

−  Better promoting EU policies beyond its borders.  

1. 

BUILDING UP THE EXTERNAL DIMENSION OF THE EU INTERNAL ENERGY MARKET 

The EU energy market depends on high levels of imports to function, and therefore depends 
on free and transparent markets. In their absence, the EU is vulnerable to political and price 
volatility.  Supply  security  in  one  part  depends  on  security  across  the  market  as  a  whole. 
External energy policy needs to reflect the interconnectedness of the internal market and the 
interdependence of the EU Member States. 

1.1. 

Coordination  in  the  internal  market:  enhancing  the  influence  of  the  EU  and 
Member States 

Bilateral agreements of Member States with third countries have a significant impact on the 
development  of  energy  infrastructure  and  energy  supply  to  the  EU.  They  must  be  in  full 
compliance with EU legislation.  

The Commission therefore proposes, together with this Communication, a Decision setting up 
an  information  exchange  mechanism  on  intergovernmental  agreements  between  Member 
States and third countries in the field of energy. The proposed mechanism, which responds to 
the request of the European Council,6 will extend and complement the notification procedure 
already applicable to gas agreements.7 It will provide for a structured instrument to exchange 
information at EU level before and after the negotiations with third countries. 

Furthermore,  the  Commission  is  ready  to  provide  its  legal  support  to  Member  States 
negotiating agreements that directly touch upon internal market legislation.8 In specific cases, 
the  Commission  may  give  an  ex-ante  assessment  of  the  conformity  of  a  future 
intergovernmental agreement with the EU law before such agreement is signed. 

The leverage of the EU internal energy market should be better used to facilitate large-scale 
infrastructure  projects  linking  the  EU  network  to  third  countries,  particularly  ones  with 
political,  commercial  or  legal  uncertainties.  An  EU  approach  can  help  reduce  these  risks. 
Negotiating mandates for the EU may be necessary where agreements have a large bearing on 
the  EU  energy  policy  objectives  and  where  there  is  a  clear  common  EU  added-value.  The 
recent  adoption  by  Council9  of  a  mandate  to  authorise  the  Commission  to  negotiate  an 
agreement  for  the  legal  framework  with  Azerbaijan  and  Turkmenistan  for  a  Trans-Caspian 
gas pipeline system offers an immediate example of the benefits of EU-level action for energy 
security. In future, a similar approach could be considered to set up a framework providing an 

6 
7 

8 

9 

Conclusions of the European Council of 4 February 2010 (EUCO 2/11) 
Regulation  (EU)  994/2010.  In  addition,  the  Euratom  Treaty  provides  for  ex-ante  notification  and 
verification of the bilateral agreements concluded by Member States in this field. For the commercial 
contracts of supply of nuclear materials concluded by the EU utilities, Euratom Treaty requires Euratom 
Supply Agency to be a party to contracts and to play an active role in the security of supply of nuclear 
fuels. 
As  has  been  successfully  done  during  the  negotiations  of  the  Nabucco  Intergovernmental  Agreement 
and the negotiations between Poland and Russia related to the Yamal pipeline 
Pending final approval 

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appropriate legal and political basis for the import of renewable electricity from the Southern 
Mediterranean.10 

Key follow-up actions: 

−  Establish a mechanism for increased transparency and information exchange on Member 

States’ bilateral energy agreements with third countries 

−  Negotiate  EU-level  agreements  with  third  countries  where  necessary  to  achieve  the  EU 

core objectives, for example to facilitate large-scale infrastructure projects  

1.2. 

Network integration: diversification of supply sources and routes 

The EU needs to expand and diversify links between the European network and neighbouring 
countries. In its Communication on ‘Energy infrastructure priorities for 2020 and beyond’,11 
the  Commission  has  outlined  a  masterplan  for  an  integrated  energy  network  taking  into 
account key interconnections with third countries. 

Falling  gas  production  in  the  EU  and  concerns  over  gas  supply  security  call  for  new  gas 
import pipelines and other infrastructures such as LNG terminals. A key infrastructure priority 
for the EU is to open the Southern Gas Corridor – a supply route for roughly 10-20% of EU 
estimated gas demand by 2020. 

The EU must demonstrate that it is prepared to engage with the Caspian and the Middle East 
regions  on  a  long  term  basis,  both  politically  and  economically.  It  must  also  assist  main 
supplier  countries  like  Azerbaijan,  Turkmenistan,  Iraq  and  others,  notably  in  the  Central 
Asian  region,  in  developing  their  energy  sectors  in  an  efficient  and  sustainable  way  and 
related trade and investment patterns with the EU. 

As  part  of  the  Southern  Corridor,  the  proposed  agreement  on  Trans-Caspian  Gas 
Transmission and Infrastructure between the EU, Azerbaijan and Turkmenistan must pave a 
way  for  the  construction  of  physical  infrastructure  for  the  supply  of  Turkmen  natural  gas 
across the Caspian Sea. 

Approximately  20%  of  the  EU's  gas  supply  passes  through  Ukraine.  The  EU  must  support 
efforts to rehabilitate Ukraine's Gas Transmission System, while improving transparency and 
the legal framework. It should aim at faster integrating Ukraine into the Energy Community.  

The  EU  must  also  work  to  establish  a  tri-partite  cooperation  at  political  and  administrative 
level  with  Russia  and  Ukraine  to  ensure  stable  and  uninterrupted  gas  supplies  through  the 
Eastern Corridor. 

The importance of the Mediterranean region in EU energy supplies is growing, both for fossil 
fuels and potentially for electricity from renewable sources. The EU should therefore be more 
actively engaged in promoting the development of energy infrastructure in this region. 

10 
11 

See also section 1.3 
COM (2010)677 final 

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With  respect  to  the  oil  sector,  the  implementation  of  the  Euro-Asian  Oil  Transportation 
Corridor is of high priority and would offer a direct access to Caspian crude oil. The stability 
of crude oil supplies through the Druzhba pipeline should be addressed in the energy dialogue 
with Russia. 

Key follow-up actions: 

−  Pursue  the  implementation  of  the  key  infrastructure  projects  defined  in  the  Commission 

Communication on 'Energy infrastructure priorities for 2020 and beyond' 

−  Diversify  gas  and  oil  supply  sources  and  routes  including  by  opening  the  Southern 

Corridor as a matter of urgency 

−  Promote viability and continuous functioning of the existing oil and gas infrastructure in 
the East and support the rehabilitation of the Ukrainian gas transmission network by 2020 

−  Develop  a  tri-partite  cooperation  at  political  and  administrative  level  with  Russia  and 
Ukraine to ensure stable and uninterrupted gas supplies through the Eastern Corridor 

−  Promote  cooperation  on  renewable  energy  projects  with  the  Southern  Mediterranean 
countries, notably in the framework of the Mediterranean Solar Plan, with the launching 
of pilot solar plant projects in 2011-2012  

1.3.  Market 

integration  with  neighbouring 

states:  a  comprehensive  but 

differentiated approach 

The Commission and the High Representative of the Union for Foreign Affairs and Security 
Policy are committed to stepping up energy cooperation12 to improve market integration and 
energy  security  with  European  Neigbourhood  Policy  partners.  The  aim  is  to  achieve  an 
integrated  energy  market  with  all  countries  of  its  neighbourhood  based  on  regulatory 
convergence.  Existing  EU  instruments  should  be  used  to  encourage  equitable  competitive 
conditions  among  suppliers  inside  and  outside  the  EU.  However,  a  differentiated  approach 
will  be  needed  to  build  balanced  partnerships  reflecting  the  willingness  of  the  countries  to 
approximate their regulatory framework to the EU and, where relevant, to implement carbon 
pricing as an element of a level playing field for power producers.13 

Countries of the European Economic Area (EEA), including Norway are already part of the 
EU  internal  market.  Cooperation  with  Switzerland  should  also  be  built  up.  Current 
negotiations of an agreement aimed at full integration of electricity markets should be given 
priority, and consideration should also be given to extending these negotiations to other areas, 
such as renewables and natural gas. 

The Energy Community Treaty is the reference point for the majority of the EU’s neighbours 
willing to be a part of the European energy system. With the recent accession of the Republic 
of Moldova and of Ukraine, the Energy Community has the potential to link the EU market 

12 
13 

Joint Communication on "A new response to a changing Neighbourhood" COM (2011)303 
The  modalities  of  participation  of  third  countries  in  the  Agency  for  the  Cooperation  of  Energy 
Regulators  (ACER)  and  in  European  Networks  for  Transmission  System  Operators  (ENTSOs)  are 
linked with the application of the corresponding EU legislation. 

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with nine neighbouring countries. Its regulatory scope should be progressively extended and 
combined with more effective implementation and enforcement, as well as concrete assistance 
to reform these markets.14 Widening the Energy Community could be considered for countries 
that  have  concluded  or  envisage  to  negotiate  a  Free  Trade  Agreement  with  the  EU  and 
demonstrate both willingness and ability to implement relevant EU legislation. 

Turkey will be soon linked to the EU power grid and could become a major gas hub and gas 
transiting  country  for  the  EU.  Progress  in  negotiations  of  Turkey's  accession  to  the  Energy 
Community Treaty and progress towards the opening of the energy chapter in the accession 
negotiations would help deepen cooperation and establish a solid framework for gas transport 
through Turkey. 

In parallel, the Baku Initiative and the Eastern Partnership Energy Security Platform should 
remain  key  frameworks  for  regional  energy  dialogue  between  the  EU  and  its  neighbouring 
countries in the East, benefitting also from the support of the EU INOGATE programme.15 

The energy situation in the Southern Mediterranean calls for special ambition. Energy demand 
in the region is expected to double from the current level by 2020. Urgent market reform is 
needed  to  stimulate  investments  in  clean  and  efficient  energy  and  low  carbon  energy 
technologies.  As  a  first  step,  the  EU  is  ready  to  work  on  developing  a  'EU-Southern 
Mediterranean  Energy  Partnership,'  focussed  primarily  on  the  development  of  renewable 
energy.16 Promising exploratory talks with partners in the region such as Morocco or Algeria 
suggest that this initiative meets interest and deserves to be fully explored. 

The Commission, together with Member States, should encourage joint industry-led projects 
with all its neighbouring countries, in key sectors of common interest: renewable electricity, 
energy  efficiency  and  demand  side  management,  with  the  emphasis  on  research  and 
innovation,  growth  and  jobs.  To  support  this,  the  Commission  may  consider  improving  the 
conditions offered by  the  Renewables  Directive17 on joint projects with Energy Community 
member  countries  and  other  third  countries  if  this  can  be  done  without  undermining  the 
additionality and the level of ambition of the targets for renewable energy development in the 
EU. The Commission will continue promoting participation of neighbouring countries in the 
EU initiatives such as Smart Cities and Communities and the Convenant of Mayors. The EU 
should  also  consider  offering  comprehensive  bilateral  partnerships  to  those  countries 
interested to engage towards further integration. 

Key follow-up actions: 

−  Conclude  the  negotiations  with  Switzerland  in  accordance  with  the  adopted  negotiating 

directives aimed at full integration of electricity markets 

−  Step up energy cooperation with the countries engaged in the EU accession process 

14 
15 

16 

17 

COM (2011) 105 final 
The  INOGATE  Programme  supports  energy  policy  cooperation  between  the  EU  and  Eastern  Europe, 
the Caucasus and Central Asia. 
As  proposed  in  the  joint  Communication  by  the  Commission  and  the  High  Representative  "A 
Partnership  for  democracy  and  shared  prosperity  with  the  Southern  Mediterranean,"  COM(2011)  200 
final. 
Directive 2009/28/EC.  

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−  Deepen and extend the validity of the Energy Community Treaty beyond 2016, and focus 

on effective implementation 

−  Propose  to  partners  a  regional  EU-Southern  Mediterranean  Energy  Partnership  initially 
focused  on  electricity  and  renewable  energy  market  development  in  these  countries  by 
2020 

−  Encourage  third  countries  to  implement  ambitious  energy  efficiency  and  renewable 
energy  policies  and  carbon  pricing,  while  ensuring  a  level  playing  field  for  the  power 
sector 

1.4. 

EU-Russia energy dialogue: from partnership to integration 

Russia has a uniquely important role in Europe's energy market. Our common aim should be 
the increased convergence of the two energy markets, recognising that the Russian Federation 
can  optimise  socio-economic  benefits  from  its  energy  exports,  and  the  EU  can  enhance 
competitiveness in its energy market. 

Our energy cooperation requires a new and strong legal base. Therefore, the negotiations on 
the  New  EU-Russia  Agreement18  need  to  address  crucial  topics  like  access  to  energy 
resources, networks and export markets, investment protection, reciprocity, crisis prevention 
and cooperation, level playing field, and pricing of energy resources. Legal certainty is also 
needed  on  nuclear  issues,  where  the  Euratom-Russia  nuclear  cooperation  agreement  is 
currently  under  preparation.  In  the  Baltic  region,  where  it  is  necessary  to  synchronise  the 
Baltic States' networks with the power system of the Union, the EU should work towards the 
conclusion of a technical agreement between the EU, Russia and Belarus on the rules for the 
management of electricity networks in the region. 

The EU-Russia Energy Dialogue calls for increased cooperation between Member States and 
the Commission. The EU-Russia Energy Dialogue has been strengthened recently through the 
signature of an enhanced Early Warning Mechanism to further improve coordination in case 
of supply or demand emergencies, the establishment of a EU-Russia Gas Advisory Council, 
and  intensive  discussions  on  future  infrastructure  developments,  including  the  regulatory 
framework. 

Building on these efforts, a joint EU-Russia Energy Roadmap will identify opportunities for 
long-term  cooperation.  These  activities  will  support  market  reforms  and  help  improve  the 
investment climate for EU energy companies in the Russian Federation. They should enable 
better  coordination  in  discussions  on  large  infrastructure  projects  involving  several  EU 
Member States or third countries. Dialogue on nuclear safety should be intensified and, in line 
with the EU-Russia Partnership for Modernisation,19 cooperation on research and innovation, 
energy efficiency and other sustainable energy technologies should be extended. 

Key follow-up actions: 

18 

19 

The  New  EU-Russia  Agreement  will  aim  to  set  a  comprehensive  framework  for  cooperation  and  to 
replace the EU-Russia Partnership and Cooperation Agreement in force since 1997. 
Launched at EU-Russia Summit, 1 June 2010 

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− 

Intensify,  as  a  matter  of  priority,  negotiations  on  the  energy  aspects  of  the  New 
Agreement 

−  Step  up  implementation  of  the  EU-Russia  Partnership  for  Modernisation  with  concrete 

joint projects on clean and efficient energy technologies, research and innovation 

−  Engage with Russia on the implementation of the EU 2050 Energy Roadmap 

−  Conclude  a  technical  agreement  between  the  EU,  Russia  and  Belarus  on  the  technical 

rules for the management of electricity networks in the Baltic region 

2. 

STRENGTHENING  PARTNERSHIPS  FOR  SECURE,  SAFE,  SUSTAINABLE  AND 
COMPETITIVE ENERGY 

As a major energy consumer, importer and technology provider, the EU has an interest in the 
energy policy developments of its partners across the globe. It is in the EU strategic interest to 
build stable and long-term partnerships with its key suppliers and new potential suppliers, as 
well as consumer countries, including emerging economies. 

The EU has some of the world's highest standards of market transparency and regulation, as 
well as high standards of nuclear and oil and gas safety. Through international cooperation the 
EU can help other countries raise their standards. 

2.1. 

Partnerships with energy suppliers  

The EU's partnerships with its key energy suppliers should be mutually beneficial, reflecting 
interdependence. They should address a wide range of topics, such as regulatory cooperation, 
energy  security  and  safety,  research  and  innovation,  energy  efficiency,  market  access  and 
investment  protection,  using  appropriate  cooperation  instruments  and  agreements.  Such 
partnerships  should  also  extend  to  the  efficient  use  of  available  resources,  as  well  as  joint 
assessment of long-term energy supply and demand perspectives. 

Besides Russia, a comprehensive approach can be better reflected in existing cooperation with 
other main hydrocarbon suppliers:20 

−  The  long-standing  EU-Norway  Energy  Dialogue  at  Ministerial  level  already  aims  at  the 
coordination  of  energy  policies  in  a  wide  sense.  Norway,  which  is  linked  to  the  EU 
through  the  European  Economic  Area,  is  an  essential  partner  for  the  Union  in  a  broad 
variety  of  areas  pertaining  to  energy  policy  at  large  and  security  of  supply.  This 
partnership has a potential for being further enhancde and extended. 

−  Likewise,  the  Union  has  an  interest  in  extending  and  lifting  to  a  higher  level  its  energy 
cooperation  with  Algeria.  Both  sides  intend  to  finalise  without  delay  their  work  on  a 
Memorandum  of  Understanding  on  energy,  which  has  the  potential  to  boost  bilateral 

20 

Russia, Norway  and Algeria account for 85% of the EU natural gas imports and almost 50% of the EU 
crude oil imports. OPEC countries account for approximately 36% of the EU crude oil imports. 

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energy  cooperation  beyond  the  traditional  topics  of  trade  in  gas  and  oil  and  notably  to 
target cooperation regarding the development and trade of renewable energy. 

−  The  EU  energy  partnership  with  Saudi  Arabia  offers  a  similarly  promising  potential  for 

broadening the scope of bilateral cooperation beyond the oil sector; 

−  Following  the  demise  of  the  Gaddafi  regime,  the  EU  stands  ready  to  extend  its  offer  of 
building  comprehensive  energy  partnerships  with  Northern  African  countries  to  Libya. 
Future  EU-Libya  energy  cooperation  could  encompass  a  wide  range  of  topics  including 
also  renewable  energy,  electricity  and  energy  market  management,  and  endeavour  to 
facilitate  Libya's  full  integration  in  regional  and  EU-Mediterranean  energy  cooperation 
structures. Furthermore, the EU will support European companies' efforts to help restore 
the country's potential for the export of oil and gas supplies. 

The EU has also a well-established energy cooperation with OPEC and most of its members. 
Alongside  these  traditional  suppliers,  the  Caspian,  Central  Asia  and  Gulf  regions  hold 
significant potential for the EU diversification policy, as does the Arctic region and countries 
like Iraq, Brazil, Venezuela, Canada and Nigeria as well as other African producers. 

Good  energy  governance,  including  the  principles  of  Extractive  Industries  Transparency 
Initiative,21 and gradual phasing out of inefficient fossil fuel subsidies that encourage wasteful 
consumption should equally be at the core of these efforts, as well as sustainable production 
practices, such as reducing gas flaring. 

The  significant  contribution  of  Liquefied  Natural  Gas  (LNG)  to  EU  energy  supply  and  its 
fundamental impact on the global gas market requires cooperation with main suppliers such as 
Qatar,  Australia,  Trinidad  and  Tobago,  as  well  as  current  and  future  main  consumers  like 
Japan, China and India to make the global market more transparent and flexible. 

The EU's low carbon objectives call for a new type of partnership where there is potential for 
renewable  energy  supplies.  Partnerships  with  biofuels-producing  and  consuming  countries, 
such  as  Brazil,  the  United  States  and  other  producers  in  Africa  and  Asia,  should  aim  at 
promoting sustainability requirements for biofuels and bio-liquids Partnerships should support 
the implementation of energy efficiency measures. 

Key follow-up actions: 

−  Deepen the existing dialogues with major energy suppliers and extend new dialogues with 

emerging energy producers to include for example renewable energy and LNG 

− 

Increase  focus  in  all  dialogues  on  good  energy  governance  and  investment,  sustainable 
energy and energy efficiency 

2.2. 

Partnerships with industrialised and fast growing economies 

The  EU's  dialogue  with  other  large  energy  consumers,  both  industrialised  countries  and 
emerging  economies,  should  focus  on  creating  transparent  and  predictable  global  energy 

21 

The  EITI  supports  improved  governance  in  resource-rich  countries  through  the  verification  and  full 
publication of company payments and government revenues from oil, gas and mining. 

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markets,  promoting  energy  efficiency  and  low  carbon  energy,  and  advancing  technology 
research  and  innovation  efforts.  International  standards,  labelling  of  products  (e.g.  the  EU 
Energy Star initiative22) and certification are especially relevant topics for joint work, given 
their significance for stimulating marketing and market access, deployment and access to low 
carbon technologies. Constructive dialogues already in place with China, Russia and the US 
offer good examples of such cooperation with consumer countries. 

Large scale international projects, such as ITER, are a means of achieving a high impact in 
technology  cooperation.  Given  the  scale  and  scope  of  the  European  Industrial  Initiatives  of 
the  Strategic  Energy  Technology  Plan,23  opportunities  for  international  cooperation  are 
possible. EU activities, for example the European Carbon Capture and Storage Demonstration 
Project  Network,  should  link  with  relevant  global  initiatives  to  exchange  best  practices  and 
promote  the  deployment  of  these  technologies.  To  maintain  Europe's  position  in  energy 
research  and  innovation,  technology  cooperation  with  our  partners  should  be  reciprocal 
notably  in  terms  of  access  to  research  and  development  programmes,  as  well  as  equal 
treatment and protection of intellectual property rights. 

Collaboration with consumer countries must also react to emerging challenges. For example, 
renewable  energy  and  electricity  storage  and  other  advanced  energy  applications  need  a 
panoply of raw materials, including rare earth minerals whose supply is at present critical. In 
addition to ensuring availability and access to these materials, research is needed to develop 
substitutes for, or reduce, the use of raw materials which bring new uncertainties in terms of 
their supply security, toxicity or environmental burden. A coordinated action by the EU with 
other technology leaders, including the US and Japan, should advance these efforts. 

Among  industrialised  countries,  the  EU-US  dialogue,  notably  the  EU-US  Energy  Council 
established  in  2009,  is  significant  for  EU  energy  policy.  Building  on  prior  experience,  it 
should focus ever more on promoting stable, reliable and transparent global energy markets, 
coordinating regulatory regimes and research programmes to speed the deployment of clean 
and  efficient  energy  technologies,  and  on  the  development  of  common  standards.  To  fully 
benefit  from  this  cooperation,  the  two  sides  need  to  fully  utilise  and  further  intensify 
cooperation  under  the  existing  frameworks,  such  as  the  Transatlantic  Economic  Council's 
(TEC)  work  on  advancing  e-mobility,  and  the  EU-US  Energy  Council's  efforts  towards 
promoting smart grids and energy storage, amongst other areas. 

The significant role of countries in Asia, such as Japan, needs to be appropriately reflected in 
EU's external efforts. The EU and Japan should reinvigorate their joint activities to advance 
energy  security,  sustainability  and  safety  objectives.  Research  and  innovation  on  energy 
technologies, defining international standards, smart grids and nuclear safety should be at the 
heart of EU's efforts with Japan. 

China is already the world's biggest energy consumer. With more than half of the growth in 
global  energy  demand  in  the  next  25  years  expected  to  come  from  China  and  India,24  the 
balance in energy markets is changing fast.  This calls for a strong response from the EU to 
tackle the challenges it creates. 

22 
23 
24 

www.eu-energystar.org 
COM (2007) 723. 
International Energy Agency, World Energy Outlook 2010 

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An EU-China dialogue has been successfully built up in recent years. Both Europe and China 
have a strong interest in enhancing energy efficiency and sustainability in China and to ensure 
a  level  playing  field  for  the  EU  companies.  Subjects  for  future  cooperation  include  energy 
efficiency,  renewable  energy,  clean  coal,  carbon  capture  and  storage,  smart  grids,  fusion 
research and nuclear safety, taking account also of China's rapid urbanization. 

Energy  demand  in  emerging  countries  is  growing  at  an  unprecedented  rate.  With  countries 
like India or Brazil, the EU should develop activities of common interest, such as on energy 
policy  and  regulatory  matters,  standards  setting  and  technology  research  and  innovation, 
including in the areas of renewable energy, sustainable biofuels, clean coal, energy efficiency, 
smart grids and fusion. 

Key follow up actions: 

− 

Invite the U.S., Japan and other industrialised partner countries to pool efforts with the EU 
to  accelerate  the  development  of  ambitious  policies  on  low  carbon  technologies  and 
energy  efficiency,  including  regulatory  cooperation,  joint  R&D  projects,  researchers 
mobility,  and  joint  work  on  better  performing  materials  and  standards  for  critical  and 
emerging technologies, as already pursued with the US under the auspices of the EU-US 
Energy Council 

−  Elaborate  long-term  low  carbon  energy  roadmaps  with  key  partners  such  as  the  US  and 

Japan to support technological, research and industrial cooperation 

−  Propose a trilateral initiative with Japan and the U.S. on research on critical materials for 
energy  applications,  particularly  in  areas  of  major  technological  challenge  such  as  the 
substitution of rare earths 

−  Raise  the  reciprocity  principle  in  the  EU  energy-related  science  and  technology 
cooperation  as  envisaged  under  the  Innovation  Union;25  enhance  cooperation  between 
U.S. national energy laboratories and laboratories in the EU, including the Commission's 
Joint Research Centre 

−  Prepare EU and Member States joint approaches towards China, India, Brazil, and South 
Africa, designed to promote policies and technologies in the areas of low carbon energy 
and  demand  management,  and  upgrade  existing  bilateral  dialogues  to  encompass 
sustainable modernisation paths and energy security aspects 

2.3. 

A stable and predictable framework for trade and investment 

The  EU  should  continue  to  include  key  principles  for  trade  and  investment  such  as  non-
discrimination  and  market  access  and  make  them  enforceable  through  effective  dispute 
settlement procedures both in bilateral agreements as well as in multilateral legal frameworks. 
These  rules  should  be  negotiated  to  suit  the  specific  energy  relations  and  interests  of 
individual countries, or groups of countries. 

These  principles  have  to  be  complemented  with  rules  concerning  reciprocal  and  equivalent 
access to energy resources and networks in these countries, as well as investment protection, 

25 

Flagship Initiative of the Europe 2020 Strategy 

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and  regulatory  convergence  regarding  pricing  policies,  sustainability  criteria  and  crisis 
prevention mechanisms. 

Significant  efforts  are  being  made  to  address  energy  specific  concerns  in  EU  trade  and 
investment  agreements,  including  the  Energy  Charter  Treaty  and  within  the  WTO.  Work 
urgently needs to be stepped up on a comprehensive and coherent legal environment for EU 
energy relations with key suppliers and transit countries. This is crucial for further regulatory 
convergence with EU neighbours. 

Under  the  Energy  Charter  process,  work  needs  to  be  refocused  on  the  core  areas  of  its 
mandate  –  trade,  transit  and  investment  protection.  Moreover,  to  maintain  its  relevance,  the 
Energy Charter Treaty should seek to extend membership towards North Africa and Far East. 
The EU considers it would be mutually beneficial if Russia plays a full role in this multilateral 
framework. 

In parallel, the EU needs to promote a level playing field for investment in sustainable energy 
by addressing the increasing number of trade and investment barriers in this sector by using 
the  tools  of  the  Market  Access  Strategy.26  Reduction  and  removal  of  such  barriers  are  also 
important for developing countries, in order to increase the affordability of the technologies 
and to encourage long-term investment, with appropriate protection for investors and rewards 
for innovation, so as to render technology transfer and deployment a reality. The EU should 
also actively engage in setting global standards for sustainable trade and investment in green 
energy. 

A  better  coherence  is  needed  between  EU  energy  policy  and  industrial  policy  regarding  the 
competitiveness of EU industry. The Commission should strive to systematically promote and 
formalise EU industry’s involvement in its energy dialogues with strategic partners. 

Key follow up actions: 

−  Support the Energy Charter Conference in re-focusing the Energy Charter work on its core 

trade, transit and investment mandate, and in extending its geographical reach 

−  Call  for  a  systematic  industry  participation  in  the  EU  energy  dialogues  with  strategic 

partner countries, including through setting up of dedicated business fora 

2.4. 

Promoting the highest safety, security and environmental standards globally 

Rules stipulating high levels of nuclear security and safety in the EU should be reflected in 
external strategies, most urgently for nuclear power plants located, or planned, in the vicinity 
of the EU. Measures should also be considered to ensure that such nuclear power plants meet 
the  highest  level  of  nuclear  safety,  verifiable  by  joint  initiatives  on  safety  and  risk 
assessments. 

Bilateral  Euratom  agreements  with  most  of  the  EU's  main  suppliers  of  nuclear  materials 
enable  the  movement  of  materials  and  technology  transfers  under  international  safeguards. 
This  work  will  be  advanced  further  with  the  revision  of  the  agreements  with  Canada  and 
Australia, negotiations of the agreement with South Africa and the Russian Federation and the 

26 

COM(2007) 183 final. 

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launching  of  negotiations  with  China.  All  new  nuclear  agreements  should  seek  compliance 
with the highest international safety and security standards. 

The  EU  should  intensify  its  efforts  in  the  multilateral  frameworks,  including  within  the 
International  Atomic  Energy  Agency  (IAEA),  to  ensure  that  the  highest  nuclear  safety 
standards  are  made  legally  binding  worldwide.  The  strengthening  of  the  Nuclear  Safety 
Convention is an essential element in that regard. 

The EU expects third countries to comply with the highest international standards of nuclear 
safety and environmental protection as regards energy projects affecting the EU, in particular 
with consistent and transparent assessment of their transboundary environmental impacts on 
the EU. 

The  EU  is  likewise  committed  to  make  the  EU  the  area  of  best  practice  in  the  safety  of 
offshore  oil  and  gas  activities.  The  Commission  is  preparing  concrete  proposals  to  support 
this  commitment  both  within  the  EU  and  internationally.  The  aim  is  to  raise  international 
safety standards, notably within the G-20, the International Maritime Organisation, OPEC and 
the International Regulators' Forum. 

Key follow up actions: 

−  Extend  nuclear  safety  assessments  to  the  EU  neighbours  and  strengthen  cooperation  on 

nuclear safety to promote convergence on regulatory framework and standards 

−  Review  the  use  of  Euratom  agreements  and  extend  their  scope,  as  relevant,  to  issues  of 
supply  of  nuclear  fuel,  nuclear  waste,  safety  standards,  nuclear  research  and  financial 
assistance on technical cooperation 

−  Advocate  for  international  legally  binding  nuclear  safety  standards  in  multilateral 

discussions, including under the IAEA 

−  Facilitate the creation of regional cooperation fora for offshore regulators, building on the 

experience of the North Sea Offshore Regulators Forum 

−  Create  a  forum  with  interested  partners  in  the  Mediterranean  for  actively  promoting  the 

highest offshore oil and gas safety standards in the region 

−  Address offshore safety with hydrocarbon producers in the OPEC context 

3. 

IMPROVING ACCESS TO SUSTAINABLE ENERGY FOR DEVELOPING COUNTRIES 

Rising populations and rising energy demand mostly in emerging countries are contributing to 
volatile  energy  prices,  energy  security  concerns  and  rising  greenhouse  gas  emissions. 
Sustainable energy policies, the greater use of  low-carbon and energy efficient  technologies 
and  a  more  sustainable,  transparent  and  non-discriminatory  framework  for  investment, 
including  for  renewable  energy,  will  all  contribute  to  improving  energy  access,  ensuring 
greater supply security and reducing tensions in world energy markets. 

Today, 1.4 billion people around the world, most of them in Sub-Saharan Africa  and South 
Asia,  still  lack  access  to  electricity  and  2.7  billion  people  still  rely  on  traditional  uses  of 
biomass  for  cooking.  The  low  rate  of  access  to  reliable  electricity  services  represents  a  key 

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bottleneck for economic development, whereas the widespread use of wood fuel in traditional 
stoves and the unsustainbale use of charcoal cause severe health problems and deforestation. 

Energy  plays  a  vital  role  in  achiving  Millenium  Development  Goals  and  is  a  key  driver  for 
poverty eradication and inclusive growth. Yet access to modern energy services remains one 
of  the  main  challenges  for  sustainable  development  and  is  therefore  at  the  heart  of  the 
Commission's development policies.27 

Low  income  and  least  developed  countries  only  contribute  with  a  small  fraction  to  global 
greenhouse gas emissions. Africa, for instance, with 15% of the world' population, accounts 
for less than 4% of global CO2 emissions. A wider use of renewable energy sources and beter 
energy  efficiency  in  these  countries  will  contribute  to  increased  sustainability  of  their 
economies,  without  limiting  the  economic  aspirations  of  the  world's  poorest  citizens.  Green 
energy revolution in Africa could provide local jobs and new income possibilities. 

Oil  price  fluctuations  have  substantial  impacts  on  developing  economies.  Renewable 
electricity,  energy  demand  management,  greater  market  transparency  and  energy  efficiency 
can  moderate  the  impact  of  future  oil  price  shocks.  By  promoting  regional  integration  and 
electricity trade as well as fair and efficient pricing, the EU can help improve the reliability 
and affordability of power supplies and contribute to inclusive, sustainable growth. 

In  Africa,  EU  efforts  should  be  fully  mobilised  to  achieving  the  Joint  EU-Africa  Energy 
Partnership  targets  on  access  to  modern  energy  services,  regional  interconnections  and 
renewable  energy.  The  EU  Energy  Initiative28  will  be  further  expanded  and  adapted  to  take 
into account the global challenges such as climate change. 

The Commission's  Green  Paper  on the EU development  policy29 highlights how sustainable 
energy is a key driver of development. The EU is uniquely placed to provide assistance in the 
area  of  energy  to  developing  countries,  particularly  to  least  developed  countries.  Further 
efforts must be taken to fully incorporate energy in development activities, while promoting 
investment  conditions, 
comprehensive  energy  policies,  reform  measures,  favourable 
infrastructure development and energy efficiency in the countries concerned. 

Key follow up actions: 

−  Scale  up  efforts  for  achieving  the  EU-Africa  2020  energy  targets  of  reliable  and  secure 
supply of energy and increased access to sustainable energy services, as agreed by the EU 
and African ministers in Vienna in September 2010 

−  Mobilise  regional  level  action  in  developing  countries,  particularly  in  Africa,  to  reform 
legal  and  regulatory  frameworks  with  a  view  to  creating  market  based  conditions  that 
attract private sector investments and enhance regional power trade 

−  Mobilise more resources from EU development assistance to catalyse investment projects 
both  at  the  small  scale  for  increasing  access  to  energy  services  in  rural  areas  and  at  a 

27 
28 

29 

SEC (2009) 534 
The  EU  Energy  Initiative  for  Poverty  Reduction  and  Sustainable  Development,  which  is  the 
overarching  structure  for  energy  development  coordination  among  the  EU  Member  States,  was 
launched at the World Summit on Sustainable Development in Johannesburg in 2002. 
COM (2010) 629 final 

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larger scale for improving energy competitiveness and security through interconnections 
and major generation projects 

−  Mainstream energy in all EU development policy instruments, and tailor support schemes 
and  financing  instruments  to  the  specific  needs  of  the  sector,  by  privileging  capacity 
development  and  technology  transfer,  including  through  research  and  innovation, 
stimulating  decentralised  renewable  power  production,  promoting  private  initiatives  and 
maximising the local value added 

−  Facilitate access of least developed countries to climate financing, notably by contributing 
in the framework of UNFCCC negotiations to the definition of a new Clean Development 
Mechanism more adapted to energy access and sustainable development needs 

4. 

BETTER PROMOTING EU POLICIES BEYOND ITS BORDERS 

Implementing the strategies and priorities presented above calls for further steps to enhance 
the coherence of the EU action and to converge efforts, including financial, to pursue mutual 
EU  and  Member  State  interests  and  priorities.  This  calls  for  a  new  system  of  energy 
partnerships with key EU partners. 

4.1. 

A strategic approach to energy partnerships 

A comprehensive system of EU energy partnerships requires differentiation and flexibility in 
scope and instruments adjusted for each country or organisation. 

The  table  below  illustrates  how  the  scope  of  our  energy  cooperation  has  to  be  adapted  and 
differentiated  according  to  the  different  types  of  relationships  we  have  with  our  partners 
(market 
relationship,  consumer/consumer 
relationship)  and  which  legal  and  political  instruments  should  be  utilised.  It  should  also  be 
borne in mind that several countries can fall in more than one category and that the nature of 
the relationship might evolve over time. 

relationship,  consumer/supplier 

integration 

With our 
neighbours / 
market 
integration 
partners 

With our key 
energy suppliers 
and transit 
countries 

With key energy 
players 
worlwide 

With developing 
countries 

Scope 

All issues 
covered by the 
EU energy policy 

Wide range of 
issues of 
common interest 
such as security 
of 
supply/demand, 
industrial 
cooperation, 
trade and 
investment 
issues… 

Focus on priority 
issues like 
research and 
innovation, low 
carbon 
technologies, 
energy 
efficiency, 
standards… 

Low emission 
development 
strategies, energy 
access, policy 
and regulatory 
frameworks, 
promotion of 
energy generation 
and transmission, 
renewable 
energy… 

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Instruments 

Energy 
Community 
Treaty 

Strategic energy 
dialogues 

Ad hoc energy 
cooperation 

Ad hoc energy 
cooperation 

Instruments under the European 
Neighbourhood Policy, crisis 
response instruments, and/or specific 
partnership and cooperation 
agreements, covering inter alia energy

Energy Charter Treaty 

Other applicable 
instruments  

Instruments 
under the EU 
development 
policy and, where 
relevant, crisis 
response 
instruments 

Trade Agreements 

The EU will accordingly engage in a dialogue with each of our key partners to discuss mutual 
expectations and interests in energy partnerships. 

4.2. 

Improving coordination among Member States 

A  more  coherent  approach  by  the  EU  and  Member  States  is  already  bringing  benefits  in 
multilateral  energy  organisations.  However, 
improved 
coordination between external strategies of Member States. For this purpose, the Commission 
will  establish  a  Strategic  Group  for  International  Energy  Cooperation,  composed  of 
representatives of Member States and relevant EU services, supported by regular joint reviews 
of EU cooperation with third countries on a country, or region, basis. 

this  could  be  reinforced  by 

Within  key  international  fora,  the  EU  and  its  Member  States  must  as  a  rule  speak  with  one 
voice. In such cases, the principle of sincere cooperation, including the duty to ensure unity in 
the  external  representation  of  the  Union  shall  fully  apply.  This  is  relevant  notably  in  the 
context of the International Energy Agency (IEA), as well as the International Energy Forum 
(IEF),  the  International  Partnership  for  Energy  Efficiency  Cooperation  (IPEEC)  and  the 
International Renewable Energy Agency (IRENA). 

As  the  G-8  and  the  G-20  become  more  explicit  in  setting  energy  policy  priorities,  it  is 
important  for  the  EU  to  make  its  voice  heard  on  strategic  subjects  such  as  offshore  drilling 
safety, nuclear safety, oil price volatility, market governance and fossil fuel subsidies. 

Key follow up actions: 

−  Set up a Strategic Group for International Energy Cooperation 

−  Promote  concrete  action  on  offshore  drilling  safety,  nuclear  safety  and  low  emission 
development strategies in the G-8/G-20 energy agenda and cooperate with third countries 
to address the volatility of energy prices 

−  Exploit  further  synergies  with  the  International  Energy  Agency's  work  on  energy 

forecasts, market analysis and technology collaboration 

−  Ensure  an  active  EU  participation  and  leading  role  in  the  global  energy  governance 
debate,  through  its  regular  presence  in  relevant  international  energy  initiatives  and 

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frameworks  

4.3. 

Optimising the EU’s external assistance in the energy sector 

Energy  is  a  key  component  of  EU  external  assistance  programmes.  The  discussions  on  the 
post-2013  EU  Multiannual  Financial  Framework,  provide  an  opportunity  to  ensure  that 
energy  related  actions  feature  in  all  EU  external  relations  instruments,  both  thematic  and 
geographical, in line with the priorities set out in this Communication. 

To avoid duplication of effort, the EU should coordinate further its support with those of the 
Member States and the international financial institutions like the European Investment Bank 
(EIB),  European  Bank  for  Reconstruction  and  Development  (EBRD),  other  European 
development  banks,  and  the  World  Bank.  The  EU will  strive  to  maximise  the  the  synergies 
between  different  European  contributions,  as  happened  in  the  case  of  funding  of  the 
Chernobyl shelter. Where appropriate, the Commission will work together with the European 
development  banks  to  ensure  that  their  financial  instruments  are  more  consistent  with  the 
needs and objectives of EU energy policy in third countries. 

The Commission will accordingly consider creating a database of energy projects in partner 
countries funded by the EU, EU Member States, EIB, EBRD and others. 

Key follow up actions: 

−  Mainstream  “energy  security,  access  and  sustainability”  in  the  post-2013  EU  external 

financial frameworks 

−  Promote  the  alignment  of  European  financial  institutions'  instruments  with  EU  external 
energy  policy  priorities  in  order  to  improve  visibility  and  impact  of  EU  intervention  in 
third countries 

−  Create an information-sharing tool designed to gather and display relevant data on EU and 

Member States energy programmes and projects in third countries 

5. 

CONCLUSION 

EU energy policy is based on the threefold objectives of security of supply, competitiveness 
and  sustainability,  and  external  dimension  plays  a  crucial  role  for  all  of  them.  A  consistent 
and  well  coordinated  external  energy  policy  is  also  vital  to  the  completion  of  the  internal 
market  and  the  delivery  of  key  policy  targets,  including  in  international  cooperation.  A 
coherent,  dynamic  and  pro-active  exernal  energy  policy  is  vital  to  enable  the  EU  and  its 
Member States to establish a lead position in energy geopolitics, to effectively promote both 
EU  and  national  energy  interests  beyond  EU's  borders,  and  to  contribute  to  the 
competitiveness of the European industry. 

The  EU  internal  energy  market,  a  solid  legal  framework  for  energy  trade,  investment  and 
safety, the EU carbon market with its international links, and EU funding for infrastructure, 
technology, research and development give the EU many strengths and create the potential for 
partnerships benefitting the EU, Member States and the EU's partners. 

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To maximise this potential and to assert EU and Member State interests more effectively in 
changing world energy markets, this Communication proposes a number of strategic actions 
and objectives, in line with European Union interests. These must be fully coordinated with 
all  Member  States,  and  also  be  consistent  and  wherever  possible  mutually  reinforcing  with 
other  EU  policies  such  as  external  relations,  trade,  development,  enlargement,  competition, 
research,  innovation,  environment  and  climate  action.  Energy  partnerships  should  seek 
complementarity and linkages that are mutually beneficial for energy policy and the broader 
relationship between the Union and relevant partner countries. Such comprehensive approach 
would ensure that efforts to improve security and sustainability of the EU energy supply are 
consistent with the development of political and economic cooperation that is based on, and 
wherever possible enhances, democratic values and respect of human rights. These priorities 
should likewise be reflected in the work of the High Representative and the EEAS, giving EU 
Delegations in strategic partner countries an active role in their implementation. 

Implementing  these  proposals  will  not  only  help  to  achieve  EU  energy  policy  objectives.  It 
can also contribute to achieving greater security, stability and prosperity across the globe. 

The  Commission  invites  the  European  Parliament  and  the  Council  to  endorse  the  proposed 
approach. It also looks forward to continuing the dialogue with all stakeholders to make the 
ambition of an EU external energy policy a reality. 

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