‘Schengen-ing’ European Energy Policy?

EU energy policy is characterized by a very complex allocation of authority between the EU and national bodies and the resulting interplay of regulatory competence. As with any area of multi-level governance, this puts great strain on the law and its ability to adapt to new realities and challenges.

It is still too early to determine whether the Lisbon Treaty will actually lead to changes in this respect. Namely, it is questionable if it in fact extends the competences of the EU in the energy area – for example, with its new ‘energy title.’

Against this background and building on the diversity of its 27 member states – which have diverging predilections for free markets, natural resource endowments and geographic specificities – a new idea has arisen: the creation of a Schengen-like regime for EU energy policy.

"A Schengen-ing of some specific areas of EU energy policy could be considerable in the short term to meet the challenges arising from the energy and climate stress and in order to pave the way towards near-to-zero carbon," Jean-Michel Glachant, director of the Florence School of Regulation at the European University Institute, told ISN Security Watch.

Short-run differentiation

In theory, groups of like-minded member states could undertake closer intergovernmental cooperation amongst themselves in specific fields of common interest. They could prefer to stay outside the main EU legal and institutional framework to escape the formal and procedural requirements of EU law. Such cooperation would be based on partial agreements under international law.

In fact, some recent statements by European leaders, such as European Parliament President Jerzy Buzek and former European Commission President Jacques Delors, suggest that short-run differentiation inspired by the Schengen regime could be the first pragmatic step toward overcoming the current institutional paralysis.

Whereas for the long term the creation of a true ‘European Energy Community’ fully responsible for all aspects of energy and based on a new treaty is identified as the smartest way ahead in an upcoming report from external pageNotre Europecall_made (a think tank founded by Delors), short-run differentiation inspired by the Schengen regime actually could be an interim step.

According to the report, various forms of enhanced cooperation should be considered as an interim solution; for instance, strengthened cooperation with respect to energy networks, a common energy fund for financing new technologies, or the establishment of gas purchasing groups.

Looking explicitly at possible Schengen-like agreements, Glachant said "Nuclear policy and gas security of supply governance are areas that seem to be predestined for such an approach."

Going deeper into detail, Adrien de Hauteclocque, Jean Monnet Fellow at the Robert Schuman Centre of Advanced Studies, tells ISN Security Watch that a partial energy agreement could be "an option for establishing common nuclear facility design certification, the management of radioactive waste and spent nuclear fuel, or the setting-up of regional repositories."

Internal and external dimensions

With regard to the internal dimension of EU gas supply security, Glachant points out that it could in fact be beneficial to establish transparency, emergency or solidarity mechanisms at a regional level, notably among new member states.

The same could be said for the external dimension of gas security of supply: To date, negotiations with gas producing countries mainly take place on a bilateral basis in an uncoordinated manner fully focused on national interest. Intergovernmental cooperation between a limited number of like-minded member states establishing a coordination and information mechanism for bilateral action could be an option.

Still, the feasibility of a Schengen-like approach also depends on legal circumstances. Creating a new foundation for EU energy policy requires considering EU laws currently in effect. Generally, member states are free to conclude agreements amongst themselves under international law in any way they wish on topics not covered by Union law, as long as they do not violate any substantive EU laws in the process. Precisely, they are pre-empted to conclude such agreements in areas of the EU’s exclusive competence and in areas that are already occupied by Union acts.

Particularly with regard to the third legislative energy package coming into force in March 2011, a detailed case-by-case analysis is needed in order to scrutinize whether a ‘Schengen-ing’ of projected areas for differentiation will actually be feasible legally. With regard to a Schengen-like agreement for gas security of supply governance, the proposed 2010 Regulation on gas supply security dealing with solidarity, an emergency as well as a transparency mechanism could be an obstacle. Here ‘occupation’ by the EU acts in the above-mentioned sense should be assumed. The same accounts, for example, for a possible agreement on nuclear waste, since the Commission will table respective legislative proposals on the treatment of nuclear waste by the end of this year.

The external side of gas supply security is another case where the member states are excluded from concluding partial agreements outside the EU law framework since there is a risk of encroaching on the exclusive competencies of the EU. Therefore, a mixed agreement that includes the EU as a party should be considered. 

Thus, "even though being very enticing, short-run differentiation might not be an option for all areas of EU energy policy," Glachant told ISN Security Watch. Additionally, there is a theoretical risk of too many intergovernmental cooperation agreements, possibly creating a schism inside the EU.