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The Lisbon Treaty and Sustainable Energy

December 2010

On the 1st of December 2009, Brussels, the Treaty of Lisbon entered into force, thus ending eight years of struggle and a lengthy process, where each of the EU’s 27 member states ratified it. The Treaty of Lisbon amends the previous EU and EC treaties, but without replacing them. It consists of amendments to the Union’s two main treaties, Treaty on European Union (TEU) and Treaty establishing the European Community (TEC), with the latter being renamed as Treaty on the Functioning of the European Union (TFEU)

While the main principles and objectives of EU environmental policy remain largely unchanged, the Treaty reinforces the EU’s commitment to sustainable development, the fight against climate change, and development of renewable energy sources.

New Part on Energy
An important policy in relation to energy is that a new part on energy is added to the TFEU with one article (Title XXI with article 194 in the consolidated TFEU, title XX with article 176A in the Lisbon Treaty). The article is relatively short, it reads:

"1.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:
(a) ensure the functioning of the energy market;
(b) ensure security of energy supply in the Union;
(c) promote energy efficiency and energy saving and the development of new and renewable forms of energy; and
(d) promote the interconnection of energy networks.

2. Without prejudice to the application of other provisions of the Treaties, the European Parliament and the Council, acting in accordance with the ordinary legislative procedure, shall establish the measures necessary to achieve the objectives in paragraph 1. Such measures shall be adopted after consultation of the Economic and Social Committee and the Committee of the Regions.

Such measures shall not affect a Member State's right to determine the conditions for exploiting its energy resources, its choice between different energy sources and the general structure of its energy supply, without prejudice to Article 192(2)(c).

3. By way of derogation from paragraph 2, the Council, acting in accordance with a special legislative procedure, shall unanimously and after consulting the European Parliament, establish the measures referred to therein when they are primarily of a fiscal nature.

Analyze of the new Energy Article
The new Article 194 relates to the European Union’s push toward a harmonized common energy policy. The EC treaty has not previously established a EU competence on energy. However, the EU has been shaping the energy sector through its competencies with regards to the internal market, competition policy, and environment. The Union has been using its powers in other areas as the internal market and the environment to regulate energy policy issues.

Increased cooperation on energy has been emerging over several years. The 2007 Spring European Council of Head of States adopted the EU Energy Action Plan for the period 2007-2009 which comprehends several priority actions concerning energy efficiency, use of renewable energies, completion of the EU’s internal market for gas and electricity, and targets for renewable energy, energy efficiency and climate. The European Council has also stressed “the need to enhance security of supply for the EU as well as for each Member State.” It has further called for the “development of a common approach to external energy policy.”

The Lisbon Treaty introduces a new legal basis, allowing the Union to establish measures relating to energy policy. The insertion of the title in the Lisbon Treaty specifically on energy is a huge step forward towards the common energy policy. Energy is one of the Union’s supposed “shared competences” with the Member States. In brief, national governments would only be able to legislate on policy areas on which the EU has decided not to.
The Union gains the competency to direct the objectives of energy policy. Par. 2 of the article states that energy policy shall follow its aims in a “spirit of solidarity” between EU countries, effects of which are hard to foresee. The Lisbon Treaty allows the Union to direct the objectives for energy policy.

Decisions on energy should be taken with normal procedures: proposal by EU Commission, decision-making among EU countries with qualified majority and in cooperation with the Parliament. This is, however, limited by maintaining the imperative that EU measures “should not affect the right of a member state to determine the conditions for exploiting its energy resources, its choice between different energy sources
and the general structure of its energy supply. Therefore article states that decisions “significantly affecting a member state’s choice between different energy sources and the
general structure of its energy supply” are to be adopted by unanimity. This may be considered as unacceptable for some countries to accept these conditions – Parliament may be refused the right to act on any decision to implement either nuclear energy solutions and even worse, dispute the sovereignty of coal reserves.

Under the terms of the Lisbon Treaty, the basic control of national energy policy is partly being transferred from Member States to the EU.

Energy in Other Parts of the Lisbon Treaty
The Environment Title (title XX, article 191 - 193 of the TFEU) reaffirms the EU’s commitment to regional and worldwide environmental protection and introduces a specific reference to the goal of combating climate change. It thus recognizes the EU’s leading role on the world stage in this area and reflects the prominent place climate change has gained on the EU’s environmental agenda.

The Energy policy also includes guaranteeing “security of energy supply.” The reference to solidarity is strengthened by new text in the chapter 1, Economic Policy, Article 122 of TFEU stating that:
“… the Council, on a proposal from the Commission, may decide, in a spirit of solidarity between Member States, upon the measures appropriate to the economic situation, in particular if severe difficulties arise in the supply of certain products, notably in the area of energy."
This text was included as a concession to Poland, which wanted guarantees that it would receive help from other Member States if their energy supplies were cut off.
It is not clear what the spirit of solidarity will entail , but "the measures appropriate" can include that some countries would be required to supply energy to another Member State in the case of a crisis. The Council will act on this by qualified majority vote.

Lisbon Treaty's Effects on Sustainable Energy
The Lisbon Treaty maintains the possibilities to support renewable energy and energy efficiency from previous treaties and adds an energy article that sets as an aim of EU policy to " promote energy efficiency and energy saving and the development of ......renewable forms of energy".
Therefore the Lisbon Treaty gives better opportunities than before to develop EU policies that are supporting a transition to sustainable energy. The main new oportunity is that promotion of renewable energy and energy efficiency can be aims of EU policies in their own right, while before they were just means to achieve other aims.
Of course, each EU policy measure will have to achieve a number of aims, and it is not lilely that energy efficiency or renewable energy can be supported by policies that do not have other aims; but the proof of contrubuting to other aims are less strict with the Lisbon Treaty. This gives an improved basis for policies that promote renewable energy and energy efficiency, also for policies that are not necessarily cost-effective at present, but where the benefits are more indirect in the form of a future society with more energy efficiency and renewable energy for the benefit of future generations.

The new provisions of security of energy supply, in art 194 and 122, can also be used to promote energy efficiency and renewable energy, if they are chosen as part of the measures to increase security of energy supply.

In conclusion the EU Commission and the other EU institutions have more room to support sustainable energy and energy efficiency with the Lisbon Treaty than before. On the other hand, the support of renewable energy and og energy efficiency are only two of several new aims in the Lisbon Traty (others include promotion of new energy, promotion of internal energy markets, promotion of energy interconnectors), so if the EU insttutions decide to prioritise other aims higher than promotion of sustainable energy, they are equally able to do so with the Lisbon Treaty, just as before.

Note by Dorthe Wolfsgruber and Gunnar Boye Olesen for INFORSE-Europe, December 2010.

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