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Poland wins dispute over the OPAL gas pipeline, maybe setting a precedent for the fate of Nord Stream 2

The Court of Justice of the European Union has ruled that the European Commission violated the principle of energy solidarity by issuing a decision on the OPAL gas pipeline. According to Polish Oil and Gas company PGNiG, the verdict strengthens Poland’s energy security and may be important for the further fate of the Nord Stream 2 project.

“The principle of energy solidarity is fundamental and EU institutions are obliged to apply it when making decisions on energy matters,” said Paweł Majewski, President of the Management Board of PGNiG. “We expect the energy solidarity principle to be applied to the Nord Stream 2 project. The CJEU judgment significantly strengthens our position in this matter.”

The proceedings before the CJEU concerned the rules of use of the OPAL gas pipeline, approximately 470 kilometres in length which runs in a southerly direction from the Nord Stream landing point in Lubmin near Greifswald as far as the Czech Republic. In 2016, the European Commission issued a new decision exempting OPAL from the need to apply EU rules prohibiting the monopolisation of transmission infrastructure. In doing so, it allowed all of the pipeline’s capacity to be used by a single user, Gazprom.

Source: OPAL Gastransport

The Commission’s decision was challenged by the Polish government, which was supported by PGNiG and the intervention on the Polish side was filed by the Lithuanian and Latvian governments. In their view, the European Commission failed to examine the impact of the regulatory exemption for OPAL on the energy security of these countries. In 2019, the General Court of the European Union in Luxembourg agreed with Poland and found that the Commission’s decision violated the principle of energy solidarity. This ruling was challenged by the German government, which appealed to the Court of Justice questioning the legal meaning of the energy solidarity principle.

The CJEU judgment of 15 July 2021, favourable to Poland, is final. This means that OPAL will be subject to regulations limiting the dominant supplier’s ability to use the entire capacity of the pipeline, as provided for in the European Commission’s 2009 decision.

At the same time, the ruling clarifies the importance of the principle of energy solidarity which provides an important basis for the articulation of Polish interests, for example in the matter of the legal regime to which the Nord Stream 2 gas pipeline should be subject.

Although OPAL Gastransport, the operator of the pipeline, was not one of the parties to the proceedings in the decision of the CJEU, the company has nevertheless noted with regret the judgment. For OPAL Gastransport, the judgment, merely confirmed a decision already adopted on 10 September 2019 while a decision on whether Poland had actually been damaged by the full utilisation of OPAL by various shippers was not explicitly made.

Thus, the pipeline’s operator continues to maintain its opinion that the EU Single Market was not and will not be disadvantaged through the use of OPAL transit capacities.

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