Territorial Extension of EU Law Through Pipelines: nord Stream 2 and the Evolution of the Gas Directive Amendment

The question raised in this paper is whether the Commission’s proposal, extending the ratione loci scope of the Directive to gas transmission lines (to and from third countries) in the Exclusive Economic Zones (EEZ) of the Member States, can be considered an example of the extraterritorial application of EU law (unlawful under international law) or, on the other hand, an example of the territorial extension of EU law (lawful under international law). As will be shown, the Commission’s proposal is considered by the Council to be in violation of some of the provisions of the United nations Convention on the Law of the Sea (UNCLOS) regulating the jurisdiction of states in their EEZ and would therefore not be approved. It is submitted here that the application of the 2009 Gas Market Directive (GMD) to the offshore parts of the pipelines can be considered a territorial extension of EU law, due to the connection of the external pipelines with Member States’ territories. The paper will begin with a brief description of the context in which the changes to the 2009 GMD were proposed by the Commission. In particular, the Nord Stream 2 (NS2) project, with its significant implications for the energy security of EU Member States, will be briefly illustrated (section 2). Next, in section 3, the Commission’s recommendation to the Council to open the negotiation of an agreement with Russia on the nS2 project, with the intention of applying the EU acquis to the pipeline, will be discussed. Sections 4 and 5 will address the rationale of the Commission’s proposal to amend the 2009 GMD and, in particular, the extension of EU energy market principles to transmission lines connecting third countries to Member States and up to their EEZ; section 5 will also then explain the position of the Council’s Legal Service on the extent to which the proposal is in conflict with the principle of territoriality, with UNCLOS, and with the division of competences between the EU and its members. next, the 2019 GMD will be assessed, examining its possible effects on the legal position of foreign energy operators (section 6). It is argued that the Directive has reinforced the set of mechanisms envisaged by the EU to ensure both respect of internal gas market principles and the security of supply. Section 7 will then consider the legal implications of the 2019 Directive on Member States’ power to conclude international agreements concerning transmission pipelines in future and the enhanced role of the Commission in safeguarding EU energy security. Concluding remarks will follow in section 8.