This post explores some of the aspects of the AG’s Opinion in Case C-848/19 P Germany v Poland that will make the Court’s judgment one to look out for.
Solidarity in the European Union’s energy policy is not merely a wishful thought but a justiciable principle of EU primary law. This is according Advocate General (AG) Campos Sánchez-Bordona, who on 18 March 2021 delivered his Opinion in Case C-848/19 P Germany v Poland. In his submission, the AG thus advises the Court of Justice to uphold the General Court’s ruling in Case T-883/16 Poland v Commission. Should the CJEU follow the AG’s opinion, this case has the potential to have far-reaching consequences for Union policy on gas imports and the infrastructure that facilitates them, but also for EU energy and climate law and policy more broadly. In this blog post, I explore some of the aspects of the AG’s Opinion that will make the Court’s judgment one to look out for.
1. The General Court Case and the Appeal
Before analysing the AG’s opinion, it is first necessary to give a brief overview of the proceedings before the General Court. Case T-883/16 concerned a dispute about capacity allocation in the OPAL natural gas pipeline. This pipeline connects to the offshore Nord Stream pipeline near Greifswald in North-East Germany and is a principal avenue for the distribution of Russian gas throughout central Europe. In 2016, the European Commission approved a decision by the German network operator that would have allowed Gazprom, a Russian supplier that is majority-owned by the Russian government, to expand its use of the OPAL pipeline’s capacity potentially far beyond the 50% it had been allowed to use so far under third-party access rules. Fearing that such an increase could endanger its security of supply, Poland brought a case before the General Court.
Poland challenged the Commission’s decision on six grounds, but the General Court only dealt with the first of these, namely that an exemption from third-party access requirements can only be granted if it enhances competition in gas supply and security of supply as per Article 36 of the Directive on Common Rules for the Internal Market in Natural Gas, when read together with the principle of solidarity in Article 194(1) TFEU, which defines the Union’s (shared) competence in energy matters. The paragraph in question reads as follows:
In the context of the establishment and functioning of the internal market and with regard for the need to preserve and improve the environment, Union policy on energy shall aim, in a spirit of solidarity between Member States, to:
ensure the functioning of the energy market;
ensure security of energy supply in the Union;
promote energy efficiency and energy saving and the development of new and renewable forms of energy; and
promote the interconnection of energy networks.
On 10 September 2019, the General Court found for Poland, holding that the Commission had indeed failed to observe the principle of energy solidarity in its decision. According to the General Court, this principle did not just apply in cases of acute energy supply emergencies but was a principle that “entails rights and obligations both for the European Union and for the Member States” (para 70). While this does not mean “that EU energy policy must never, under any circumstances, have negative impacts for the particular interests of a Member State in the field of energy” (para 77), such interests must be taken into account by both the Member States and the Union when making energy policy decisions.
Germany brought an appeal against this judgment on 20 November 2019. The main contention of the appeal is that energy solidarity under Article 194 TFEU is not justiciable because of its “abstract and indeterminable nature” (first ground of appeal). In the alternate, Germany claims that the principle of energy solidarity should be interpreted narrowly and only apply in energy supply emergencies (second ground of appeal). Germany also contends that purely the failure of the Commission to expressly mention the principle of solidarity was not a valid ground to hold its decision in breach of that principle (fourth ground of appeal), because the Commission had, in fact, taken the effect of its decision on Poland and the EU into account (third ground of appeal). In any event, Germany claims that a “substantively correct” decision by the Commission should not have been annulled on procedural grounds (fifth ground of appeal).
2. The AG Opinion
In his Opinion, the AG concludes that all five grounds of appeal should be dismissed. The assessment regarding the first ground of appeal is the most important part of the Opinion. While acknowledging that “the principle of energy solidarity entails some measure of abstraction making it difficult to apply” (para 111), the AG confirms the General Court’s view that energy solidarity is a justiciable principle of EU law that can be used as a criterion for judicial review. Here, I focus on three aspects of the Opinion that have the potential to render the CJEU’s judgment significant even beyond the context of EU gas imports.
A. Both the “Spirit” and “Principle” of Solidarity Can Have Legal Effects
The AG examines the principle of solidarity as it appears in the European Treaties, in secondary legislation, and, finally, in the case law of the CJEU. In his analysis of the primary EU law and the role of solidarity therein, the AG relies in particular on Article 80 TFEU, which states that the “principle of solidarity” should govern Union policies in the area of immigration, asylum, and border control, and the Court’s previous invocation of this solidarity provision (para 68). Based on this assessment of solidarity in the Treaties and in the case law of the CJEU, the AG concludes that solidarity is a principle “significant enough to create legal consequences” (para 70).
The AG notes that some Treaty provisions, such as Article 194 TFEU, refer to the “spirit” of solidarity while others, such as Article 80 TFEU, refer to the “principle” of solidarity (para 62). However, according to the AG, both the “spirit” and the “principle” of solidarity can have legal effects. Where these effects are not envisioned by the Treaties, they refer explicitly to “political solidarity” (para 97), such as in Article 24 TEU.
An endorsement of this reasoning by the CJEU could be important. It would create a presumption that solidarity in all instances where it appears in the Treaties, except where it is expressly called “political solidarity”, has potential legal effect, though according to the AG the precise content of the solidarity obligation will need to be determined by the Court in the context of the competence within which it appears (para 72).
B. Horizontal and Vertical Solidarity Obligations
The AG agrees with the General Court’s finding that “the principle of solidarity entails rights and obligations both for the European Union and for the Member States” (para 95). He further finds, in his assessment of the principle of solidarity more broadly, that solidarity can “be linked to relations both horizontal (between Member States, between institutions, between peoples or generations and between Member States and third countries) and vertical (between the European Union and its Member States)” (para 60).
However, the AG does not analyse how these horizontal and vertical dimensions of solidarity manifest specifically in the context of energy. The General Court had expanded on this to some extent, stating (in para 70 of its judgment) that “[o]n the one hand, the European Union is bound by an obligation of solidarity towards the Member States and, on the other hand, the Member States are bound by an obligation of solidarity between themselves and with regard to the common interest of the European Union and the policies pursued by it”. The AG instead states that in the present case, it suffices to focus on the implications of energy solidarity for the European Commission only (para 101).
It will be important to see if and how the CJEU will engage with this two-dimensionality of the energy solidarity obligation, in particular regarding the solidarity obligations that apply to Member States, both in their relations with the European institutions (vertical) and with each other (horizontal). An obligation of solidarity with other Member States’ energy interests and, more importantly, with overarching Union-level energy objectives, has the potential to influence or even constrain domestic energy policy choices.
C. Energy Solidarity Applies to the Entirety of EU Energy Policy Objectives Enumerated in Article 194(1)
Clarification by the CJEU regarding the scope of the solidarity obligation as it applies to Member States is especially important given the third, and most significant, aspect of the AG’s opinion I explore here. In its judgment, the General Court confined itself to interpreting the principle of solidarity only in the context of security of energy supply (para 73 of the General Court judgment). The AG, however, makes explicit that “[t]he ‘spirit of solidarity’ must inform the objectives of the European Union’s energy policy and further its development. From that point of view, energy solidarity cannot be regarded as being synonymous with mere energy security (or ‘security of energy supply’), which is only one of its manifestations” (para 70).
This might seem like a truism given the structure of Article 194(1) cited above. However, the notion of solidarity in EU energy policy has a traditional and almost exclusive association with the objective of ensuring security of energy supply, both on the policy and legal levels. To give an (admittedly somewhat anecdotal) example, solidarity discourse tends to feature prominently in legislation that addresses security of supply concerns directly, such as the Regulation on Risk-Preparedness in the Electricity Sector, which expressly refers to the “spirit of solidarity” in several instances. Meanwhile, solidarity does not feature at all in landmark energy sector decarbonisation legislation such as the Renewable Energy or Energy Efficiency Directives. If endorsed by the CJEU, an explicit rejection of the near-exclusive link between solidarity and security of supply would make it clear that the obligation of energy solidarity also extends to the decarbonisation-oriented sub-paragraph (c) of Article 194(1) TFEU, which states that EU energy policy should “promote energy efficiency and energy saving and the development of new and renewable forms of energy”. This would be significant, particularly in light of the von der Leyen Commission’s priority to establish a European Green Deal.
This is particularly true if combined with an elaboration of the obligation that the solidarity principle contains for Member States as explored under point B above. What would a binding obligation of solidarity with Union-level targets for renewable energy or energy efficiency look like? Could, as contemplated elsewhere in the wake of the General Court’s judgment, a Member State be sued by the Commission or a fellow Member State for its failure to make a fair contribution to Union-wide energy decarbonisation targets? This could lend considerable heft to the integrated planning, reporting and monitoring mechanism instituted by the 2018 Regulation on the Governance of the Energy Union, which will be amended by the European Climate Law that is currently in trilogues.
3. Conclusion
The CJEU judgment in Case C-848/19 P could have profound consequences for EU energy law and beyond. Should the Court follow the AG’s Opinion and uphold the General Court’s decision that energy solidarity in Article 194(1) TFEU is a justiciable principle of EU law, it will be particularly important to pay attention to the Court’s engagement with the points highlighted above: are all mentions of solidarity in the Treaties (except “political solidarity”) capable of having legal effect? What are the obligations on Member States flowing from the justiciability of energy solidarity, both in their relations with EU institutions and with each other? And do these obligations apply with equal force to all components of Union energy policy enumerated in Article 194(1) TFEU? The answer to these questions is sure to be a crucially important point in future energy litigation before the CJEU.