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Decision in case 1933/2018/KR on the European Commission’s action relating to the drawing up of the EU list of ‘Projects of Common Interest’ in the energy sector
Päätös
Kanteluasia 1933/2018/KR - Tutkittavaksi otetut kantelut, pvm Keskiviikkona | 27 helmikuuta 2019 - Päätökset, pvm Torstaina | 28 marraskuuta 2019 - Toimielin, jota kantelu koskee Euroopan komissio ( Ei hallinnollista epäkohtaa ) - Maa Irlanti
The case concerned the inclusion of a project on the EU’s third list of Projects of Common Interest (‘PCIs’). PCIs are infrastructure project proposals that the Commission considers will improve and integrate energy markets in the EU.
The complainant, a member of an NGO called ‘Safety Before LNG’, is concerned about the inclusion of a project on the PCI-list, namely the ‘Shannon Liquefied Natural Gas (LNG) Terminal and connecting pipeline project’. He is of the view that this project should have been the subject of a strategic environmental assessment (SEA), before it was included on the third PCI-list.
The Commission pointed out that it is the responsibility of the Member States in which projects are carried out to ensure that the project meets all EU and national environmental rules. The Ombudsman noted, in this regard, that the Member State authorities in Ireland, including the courts, are carefully examining the compliance of the proposed gas terminal with EU law. The Ombudsman further accepted the Commission’s argument that it has no power to carry out an SEA. The Ombudsman thus found the Commission’s explanation on the matter to be convincing.
The Ombudsman takes note, however, of the complainant’s point about heightened awareness of the negative impact of certain fossil fuels on the climate. Given that the list of PCIs is intended to help the EU achieve its energy policy and climate objectives in accordance with the Paris Climate Agreement, she trusts that the Commission too will continue to pay particular attention to this issue of major importance to citizens.
Background to the complaint
1. Every two years since 2013, the European Commission has drawn up a list of ‘projects of common interest’ (PCIs) intended to help the EU achieve its energy policy and climate objectives in accordance with the Paris Climate Agreement[1].
2. The PCI Regulation[2] establishes a framework for the identification, planning and implementation of PCIs. It identifies nine strategic geographical energy infrastructure priority corridors in the fields of electricity, gas and oil[3]. One of the benefits for a project featuring on the PCI-list is that its promoters have the right to apply for funding from the Connecting Europe Facility[4].
3. In November 2017, the Commission published its third list of PCIs. The list contains 173 projects[5]. One of these projects was the Shannon Liquefied Natural Gas (LNG) Terminal and connecting pipeline[6].
4. The complainant is an Irish citizen and member of the group ‘Safety Before LNG’. He is concerned about the Shannon LNG Terminal and the fact that it was placed on the PCI-list. His concerns deepened after a number of public statements were made, including a joint Commission-US statement that “The European Union wants to import more liquefied natural gas (LNG) from the United States to diversify its energy supply”[7] and a press release mentioning the Shannon LNG Terminal as an entry point for that gas[8].
5. The complainant raised his concerns about the establishment of the PCI-list with the Commission’s Directorate-General for Energy. He considered that the reply from the Commission failed to address his concerns in a satisfactory manner.
6. The complainant turned to the Ombudsman on 12 November 2018.
The inquiry
7. The Ombudsman opened an inquiry into the complainant’s concerns arising from the inclusion of the project in question on the PCI-list.
8. In the course of the inquiry, the Ombudsman asked the Commission to reply to aspects of the complaint related to the eligibility criteria of projects considered for the PCI-list, including in terms of strategic environmental assessments (SEA).
9. The Ombudsman received the reply of the Commission and gave the complainant the opportunity to comment on it.
As regards establishing the PCI-list
Arguments presented to the Ombudsman
10. The complainant argued that when the Shannon LNG Terminal and connecting pipeline obtained planning permission in 2008, the negative impact of certain fossil fuels on the climate was not clearly established. He considered that recent information on the negative impact of fossil fuels should have been taken into account when adding the project to the third PCI-list, including by conducting an SEA.
11. The Commission noted that the purpose of the PCI Regulation is to provide guidelines for identifying projects that can help to overcome gaps in energy infrastructure and strengthen the connection of EU Member States to the European energy network. As such, it does not specify or prejudge the location, routing or technology of the PCIs, it does not grant the permits necessary for implementing these projects, and it is not responsible for the authorisations required to build the PCI infrastructure.
12. The Commission argued that the inclusion of a given infrastructure project on the PCI-list[9] does not prejudge whether or not EU environmental law has been complied with. All PCIs must respect the requirements of EU and national environmental policies and law. The environmental impact of each PCI is assessed within this framework. For example, most PCIs require an environmental impact assessment (EIA)[10] that is usually conducted after the project has obtained PCI status. An EIA needs to be carried out by the project promoters, and national authorities must ensure that all legal requirements are met.
13. The Commission pointed out that EU law does not confer any obligation or competence on the EU administration to carry out an SEA on plans and programmes.
14. The Commission stated that a project may be removed from the PCI-list if its inclusion on that list was based on incorrect information, or the project promoter failed to ensure that the project complies with EU law[11]. The Commission noted that at the time of writing, this had never happened.
The Ombudsman's assessment
15. The Ombudsman notes the Commission’s assurance that PCIs must respect the requirements of all EU and national environmental policies and law. It is for Member States, and their courts, to ensure that these rules are respected. If they are not, the Member State is required to ensure that the project does not go ahead. The fact that a project is on a PCI-list does not in any way alter this situation.
16. As regards the complainant’s arguments about the need to carry out an SEA before including a project on the PCI-list, the Ombudsman notes that the SEA Directive, like all Directives, applies to EU Member States. It is for a Member State that intends to implement a project, which falls under the SEA Directive, to carry out all the necessary steps to ensure compliance with that Directive. It is not for the Commission. The Commission has no power to carry out an SEA under the SEA Directive. However, if a Member State were not to comply with its obligations under any EU environmental rules, including the SEA Directive, the Commission has the power to inquire into the matter, including through infringement proceedings.
17. The Ombudsman takes no view as regards whether the building of a specific gas terminal, or aspects thereof, requires a specific SEA, or indeed a specific EIA. It is for Member States, and not the Commission, to ensure that all necessary environmental assessments are carried out. If a project ceases to have all the necessary planning and approvals in place, it can be removed from the PCI list.
18. As regards the obligation of the Irish authorities to ensure that the project complies with EU law, including EU environmental law, the Ombudsman notes that if there is any dispute as regards whether the project does actually comply with EU law, that dispute can be submitted to the Irish courts. These courts have access to the information required to take a view on compliance with EU law, and the legal means to block construction until all requirements under EU law and national law are met. Indeed, press reports indicate that such steps were underway in Ireland.[12]
19. Consistent with this view, the Ombudsman notes that the Commission has indeed taken steps to remove one project from the PCI-list because the project failed to get all the necessary planning approvals at national level. Specifically, the Gothenburg LNG Terminal in Sweden was removed from the BEMIP[13] gas regional list agreed by the relevant decision-making body following the Swedish authorities’ decision to deny authorization for the LNG terminal to be connected to the gas transmission grid (without this connection the project does not have the required cross border impact).[14]
20. In light of the above, the Ombudsman considers that there was no maladministration.
21. That having been said, the Ombudsman notes the complainant’s point about heightened awareness of the negative impact of certain fossil fuels on the climate. She notes, for example, that the European Investment Bank (EIB) recently announced the decision to end financing for fossil fuel energy projects from the end of 2021[15]. Given that the list of PCIs is intended to help the EU achieve its energy policy and climate objectives in accordance with the Paris Climate Agreement, she trusts that the Commission too will continue to pay particular attention to this issue of major importance to citizens.
Conclusion
Based on the inquiry, the Ombudsman closes this case with the following conclusion:
There was no maladministration by the Commission.
The complainant and the Commission will be informed of this decision.
Emily O'Reilly
European Ombudsman
Strasbourg, 28/11/2019
ANNEX
The procedure leading to the adoption of the PCI-list by the Commission is as follows:
1) Each individual proposal for a project of common interest requires the approval of at least two EU Member States to whose territory the projects relate.
2) The initial assessment and selection of PCIs is carried out by Regional Groups[16] consisting of:
- representatives of competent ministries,
- national regulatory authorities,
- individual gas and electricity transmission system operators and other project promoters,
- the European Network of Transmission System Operators (ENTSO) for electricity and gas,
- the Agency for the Cooperation of Energy Regulators (ACER) and
- the European Commission.
The Regional Groups evaluate the applications against the general and specific criteria as defined in the PCI Regulation, focusing especially on the contribution of these projects to market integration, sustainability, security of supply and competition[17].
ACER issues an opinion that examines the consistent application of the assessment criteria and the cost/benefit analysis across regions[18].
3) After these assessments, the Commission adopts the list of approved PCIs via a delegated act procedure.
4) The list of projects is then submitted by the Commission to the European Parliament and Council. These institutions have two months to oppose the list, or they may ask for an extension of two months to finalise their position. If neither the Parliament nor the Council rejects the list, it enters into force. The Parliament and the Council cannot request amendments to the list.
[1] The Paris Agreement is the first-ever universal, legally binding global climate deal. For more information, see: https://ec.europa.eu/clima/policies/international/negotiations/paris_en.
[2] Regulation (EU) No 347/2013 on guidelines for trans-European energy infrastructure, OJ L 115, 25.4.2013, p. 39–75, see https://eur-lex.europa.eu/legal-content/en/TXT/?uri=celex%3A32013R0347.
[3] It also identifies three EU-wide energy infrastructure priority areas, namely smart grids, electricity highways and carbon dioxide transportation networks. Please see the annex for more detail on the procedure to establish a PCI-list.
[4] See: https://ec.europa.eu/energy/en/topics/infrastructure/projects-common-interest/key-cross-border-infrastructure-projects#content-heading-1.
[5] See: https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=uriserv:OJ.L_.2018.090.01.0038.01.ENG&toc=OJ:L:2018:090:TOC.
[6] The project, planned in County Kerry, Ireland, aims “to build an LNG import terminal”, which “will consist of up to four LNG storage tanks, each with storage capacity of 200,000 cubic metres, and a jetty capable of receiving the largest LNG tankers in operation”, see: http://www.shannonlng.ie/index.html. The Commission’s proposal for the fourth PCI-list was published on 31 October 2019, and also included the Shannon LNG Terminal and connecting pipeline project: https://ec.europa.eu/energy/sites/ener/files/c_2019_7772_1_annex.pdf.
[7] See: https://europa.eu/rapid/press-release_STATEMENT-18-4687_en.htm.
[8] See: https://europa.eu/rapid/press-release_IP-18-4920_en.htm.
[9] See the annex for more information on how the Commission establishes the PCI-list.
[10] Under Directive 2011/92/EU on the assessment of the effects of certain public and private projects on the environment, see: https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A32011L0092.
[11] Pursuant to Art. 5(8) of the TEN-E Regulation (No 347/2013) on guidelines for trans-European energy infrastructure, see: https://eur-lex.europa.eu/legal-content/en/TXT/?uri=celex%3A32013R0347.
[12] See report of February 2019: https://www.irishtimes.com/news/environment/developers-of-shannon-gas-processing-terminal-ordered-not-to-begin-construction-1.3795310.
[13] For more information, see: https://ec.europa.eu/energy/en/topics/infrastructure/high-level-groups/baltic-energy-market-interconnection-plan.
[14] See https://data.consilium.europa.eu/doc/document/ST-10743-2019-INIT/en/pdf.
[15] See: https://www.eib.org/en/press/all/2019-313-eu-bank-launches-ambitious-new-climate-strategy-and-energy-lending-policy.
[16] See: https://ec.europa.eu/energy/en/topics/infrastructure/projects-common-interest/regional-groups-and-their-role.
[17] Meetings of the Regional Groups are open to all interested parties, such as environmental and consumer organisations and representatives of civil society, who are invited, consulted and expected to contribute to the work carried out by these groups.
[18] The ACER opinion in this case dates from 10 October 2017, and can be accessed here: https://www.acer.europa.eu/Official_documents/Acts_of_the_Agency/Opinions/Opinions/ACER%20Opinion%2013-2017.pdf#search=PCI%20list%20opinion%202017. The regional groups’ decision-making bodies adopted the regional lists on 17 October 2017.