Enlarging the EU’s internal energy market: Why would third countries accept
EU rule export?$
Heiko Prange-Gst¨ohl Ã
European Commission, Brussels, Rue de la Loi 200, BE—1049 Brussels, Belgium
a r t i c l e i n f o
Article history:
Received 13 February 2009
Accepted 28 July 2009
Available online 28 August 2009
Keywords:
External energy policy
Energy Community
Rule export
a b s t r a c t
Why would countries without a membership perspective seek integration into the EU’s internal energy
market? One major element of the EU’s external energy policy is the export of EU energy norms and
regulations to neighbourhood countries and beyond. A core legal instrument the EU uses in this context
is the Energy Community Treaty (ECT). The ECT goes both geographically and regarding its depth
significantly beyond neighbourhood or association policies, addressing potentially also countries in the
‘far neighbourhood’ and aiming at the creation of a Single Market for energy with these countries.
While, however, EU candidate countries are obliged to adopt the ‘‘acquis’’ before accessing the EU and
therefore comply to EU rules already before they enter the Club, I argue that countries with no or only a
vague membership perspective – i.e. countries where the EU cannot apply the ‘‘conditionality’’ –
approach (e.g., ENP countries)—aim at deeper integration with the EU because they are either eager to
demonstrate their capability and potential to become part of the Club, they seek greater independence
from a regional hegemon or they envisage significant economic gains as common norms, rules and
standards are likely to increase economic exchange with the EU.
& 2009 Elsevier Ltd. All rights reserved.
1. Introduction: ‘externalising’ the EU’s energy market
Since the beginning of the new century the desire to create a
common energy policy for Europe has become core to the political
agenda of the European Union (EU). The need to secure energy
supply in Europe has been articulated by the European Commission
already in November 2000 through the Green Paper
‘‘Towards a European Strategy for the Security of Energy Supply’’
(European Commission, 2000). The Commission Energy Green
Paper ‘‘A European Strategy for Sustainable, Competitive and
Secure Energy’’ (European Commission, 2006a), published in
March 2006, accelerated the hype around this topic and provided
a new momentum to energy policy. In the context of the overall
European Energy Policy Strategy both Member States and the
Commission acknowledge a coherent EU external energy policy an
indispensable part of the Union’s ‘‘Energy Package’’, which was
tabled to the Spring European Council in March 2007 (European
Commission, 2007a). The importance of an external dimension in
the EU’s energy policy was re-iterated since then several times.1
The energy security and solidarity action plan tabled by the
Commission in November 2008 made external energy policy one
central pillar of the Second Strategic Energy Review (European
Commission, 2008a). If finally ratified, the Lisbon Treaty will have
an energy chapter for the first time in the Union’s history.
For the EU external energy policy has three interrelated
objectives: it shall ensure the security of the Union’s energy
supply, it shall support the international efforts in combating
climate change and it shall promote the EU’s access to energy
worldwide2
: ‘‘Energy must become a central part of all external
EU relations; it is crucial to geopolitical security, economic
stability, social development and international efforts to combat
climate change’’ (European Commission, 2007a, p. 17). The
European Neighbourhood Policy (ENP) and the Eastern Partnership
(European Commission 2008d), the Black Sea Synergy
(European Commission 2007b), the EU’s Strategy for Central Asia3
as well as the ‘‘Union for the Mediterranean’’ (European Commission,
2008e) provide the main policy framework in which the EU
elaborates its external energy policies towards its ‘‘near abroad’’.
ARTICLE IN PRESS
Contents lists available at ScienceDirect
journal homepage: www.elsevier.com/locate/enpol
Energy Policy
0301-4215/$ - see front matter & 2009 Elsevier Ltd. All rights reserved.
doi:10.1016/j.enpol.2009.07.070
$
Views expressed in this article are purely personal and do not reflect the
position of the European Commission. I thank the reviewers for their valuable
comments.
à Tel.: +32 2 296 6186; fax: +32 2 298 04 96.
E-mail address: heiko.prange-gstoehl@ec.europa.eu
1
For example, Council of the European Union, doc. 14090/08, 14 October 2008;
European Commission (2008b, c).
2
See speech by Andris Piebalgs, Commissioner for Energy, 20 November 2006
(SPEECH/06/712).
3
See Council of the European Union ‘‘The EU and Central Asia: Strategy for a
New Partnership’’, Document 10113/07, 31 May 2007; Council Conclusions on
Central Asia, 2796th External Relations Council Meeting in Luxembourg, 23 April
2007.
Energy Policy 37 (2009) 5296–5303
ARTICLE IN PRESS
Notably, one of the main pillars of the EU’s external energy
policy is the objective of energy market integration – rather than
only bilateral or multilateral co-operation – with the EU’s Eastern
and South-Eastern neighbours and the ‘neighbours of the
neighbours’, some of them being neither so-called ‘potential
candidate countries’ nor ENP countries (see European Commission,
2006b, c), that means countries without any EU membership
perspective.
The highest degree of such co-operation is the Energy
Community Treaty (ECT) between the European Community and
currently the Western Balkan countries.4
The ECT entered into
force in July 2006 aiming at establishing a Single Market for
energy between the members of the ECT.5
The ECT is – besides the
above mentioned Western Balkan countries – expected to cover
quite a large number of still economically and politically
developing countries in the Eastern part of Europe (the Newly
Independent States such as the ENP countries Ukraine and
Moldova), the Southern Caucasus (ENP countries like Azerbaijan
and Georgia) and is envisaged to go beyond the immediate
neighbourhood including Central Asian countries as well as
countries of the Gulf Region (plus Norway and Turkey).6
The
special features of the ECT, i.e. its potential geographical coverage
of non-EU members, the economic status of the countries
addressed as well as the quite high degree of its institutionalisation,
reveal that the EU has chosen a new quality in its external
governance with regard to external energy policies.
The objective to ‘externalise’ internal energy market principles
was first articulated by the Commission in 2003, when Brussels
published a Communication on ‘‘energy relations of the enlarged
European Union with its neighbours and most important
geographical partners in this sector’’ (European Commission,
2003, p. 4).7
In that document the Commission highlighted that
‘‘the European Union can face the challenges of growing external
energy dependence, the need to address infrastructure issues on a
regional level, to diversify sources of energy geographically and
technologically and to broaden the basis for energy trade in the
European continent and its adjoining continents’’ (European
Commission, 2003, pp. 4–5) only together with neighbouring
countries and other partners (in particular Russia).
This article argues that countries with no or only a vague
membership perspective agree to deeper (energy) integration
with the EU because they are either eager to demonstrate their
capability to become part of the Club – even if there is currently
no membership perspective – (‘identification motive’), they seek
greater independence from political interference of a regional
hegemon in its ‘near abroad’ (‘independence motive’) or they
envisage significant economic gains as common norms, rules and
standards are likely to increase economic exchange with the EU
(‘economic motive’). The degree to which one or all of these
motives apply may vary among countries with regard to their
individual political, geographical or economic situation.
While the need for an ‘externalisation’ of EU energy market
principles seem to be well founded from an EU perspective (i.e.
security of supply), the objective of expanding parts of the
Internal Market to relatively poor non-EU member states without
a membership perspective through the establishment of a highly
institutionalised set-up (i.e. the Energy Community) is indeed
rather unique. Other examples with similar degrees of institutionalisation,
such as the EU-Turkey Customs Union or the Agreement
on the European Economic Area (EEA), differ significantly
regarding the type of partner countries: a single-country-case
with membership perspective, on the one side, and highlyindustrialised
small, rich countries, on the other side.
Against this background this article addresses the motives of
third countries that have only a vague or no EU membership
perspective (‘neighbourhood’ and ‘far neighbourhood’ countries)
to accept that the EU extends its energy rules and institutions
beyond its borders, i.e. they agree with the EU’s approach of
‘regulatory boundary shifting’ (cf. Lavenex, 2004) or ‘norm export’
(cf. Gst¨ohl, 2007). While most current studies on the EU’s external
energy policy address the topic from the angle of EU governance
or integration theory (e.g., Lavenex, 2004; Mane-Estrada, 2006;
Mayer, 2008; Milcher et al., 2006; M¨uller, 2006) this article will
provide some first explanations on the ‘demand side’ of integration
into the EU’s energy market.
In contrast to the enlargement process, where the membership
perspective triggered political and economic change as well as
compliance with EU law (e.g., B¨orzel, 2006; Prange, 2004; Prange
and Koutalakis, 2006), the preconditions for successful conditionality
are almost absent in the neighbourhood—and more so in the
‘far neighbourhood’ (Albi, 2009; Weber et al., 2007; Schimmelfennig
and Sedelmeier, 2004). The ENP, which was constructed as
an alternative to EU membership (European Commission, 2004;
Landaburu, 2006),8
does not provide enough incentives for some
of the countries covered, especially for those that follow a
pronounced pro-EU/Western attitude such as the Ukraine or
Moldova (Emerson et al., 2007; Haran and Sushko, 2005; Hofer,
2007a; Lavenex, 2004). As Emerson et al. point additionally out:
the adoption of EU rules is even more unlikely as the domestic
costs of adoption ‘‘are potentially higher in the neighbourhood
countries given the authoritarian political regimes in many of
them and the level of economic development in quite a number of
them’’ (Emerson et al., 2007, p. 6).
In fact, there has already been resistance in some of the
supplier countries to the import of EU energy norms. The
countries of the Gulf Cooperation Council have accused the EU
of having an ‘‘overly narrow, regulatory-based approach to
energy’’ (Youngs, 2007, p. 9), Algeria has rejected the whole set
of energy governance norms incorporated into the neighbourhood
action plan, and Kazakhstan has resisted ‘‘an embrace of EU
regulatory and market norms while it has no prospect of a place in
the ENP’’ (Youngs, 2007, p. 10). In light of these conditions the
article studies a ‘hard case’ for theory building as in the absence of
conditionality EU rule adoption is unlikely in third countries (also
e.g., Lavenex, 2008).
4
The Western Balkans covers the ‘candidate countries’ Croatia and Macedonia
as well as the ‘potential candidate countries’ Albania, Bosnia and Herzegovina,
Serbia, Montenegro plus UNMIK on behalf of Kosovo.
5
Based on the so-called Athens Regulatory Process that started in 2002
leading to the signature of two Memoranda of Understanding: Memorandum of
Understanding on the Regional Electricity Market in South-East Europe and its
Integration into the European Union Internal Electricity Market—Athens 15
November 2002; Memorandum of Understanding on the Regional Energy Market
in South-East Europe and its Integration into the European Community Internal
Energy Market—Athens 8 December 2003.
6
See the speech of Benita Ferrero-Waldner, Commissioner for External
Relations and Neighbourhood Policy, on 20 November 2006 (SPEECH/06/710);
also European Commission 2006c, 2008a. For the moment the ECT is focused on
gas and electricity, but an ‘oil dimension’ is very likely to be added soon (European
Commission, 2007b, p. 5; Energy Community Ministerial Council, Meeting
Conclusions, 11 December 2008). Moreover, the European Commission is currently
examining whether a regional ‘neighbourhood energy agreement’ would be
feasible (Speech by Commissioner Benita Ferrero-Waldner at the European
Neighbourhood Policy Conference, 3 September 2007, SPEECH/07/500).
7
The precedent Communication ‘‘Completing the internal energy market’’
(COM (2001) 125 final) of March 2001 only spoke of reciprocal opening of energy
markets between the EU and third countries, e.g. within the framework of
Association Agreements, but not about the convergence of market regulations
(European Commission, 2001, p. 28).
8
‘‘The EU has emphasised that it offers a means to reinforce relations between
the EU and partner countries, which is distinct from the possibilities available to
European countries under Article 49 of the Treaty on European Union’’ (i.e. EU
membership).
H. Prange-Gst¨ohl / Energy Policy 37 (2009) 5296–5303 5297