The Federal Network Agency (BNetzA) of Germany on May 15 rejected the application from Nord Stream 2, the company building a controversial pipeline from Russia to Germany under the Baltic Sea, for exemption from the EU gas directive.
Germany’s Bundesnetzagentur regulator said in an online announcement that Nord Stream 2 did not qualify for an exemption because the pipeline had not technically been completed by May 23, 2019.
Nord Stream 2 said on May 15 the company disagrees with the decision of the Bundesnetzagentur to reject the application for a derogation and maintains that on the effective date of May 23, 2019, the pipeline had been completed from the perspective of economic functionality. “Based on the applicable legal framework at that time, the company had made irrevocable investments worth billions of euros long before the European Commission announced its plan to amend the Gas Directive,” Nord Stream 2 EU representative Sebastian Sass
Sass argued that international legal experts have confirmed that narrowing the definition of “completed” to the conclusion of the physical construction of a gas pipeline would violate the protection of legitimate expectations and other fundamental rights in EU law. It would also be in breach of constitutional guarantees from the German Basic Law.
“The rejection of Nord Stream 2’s application for a derogation exposes the discriminating effect of the amended EU Gas Directive. Nord Stream 2 has challenged the amendment before the EU General Court and under the Energy Charter Treaty,” Sass argued. “We await receiving the official decision and will then evaluate it and consider further actions to preserve our rights, including appealing this decision in the German courts. The appeal is possible within one month following the decision,” he said.
The operation of Nord Stream 2 will comply with all applicable legal requirements, Sass said, noting that the construction permits are based on a different set of legal rules than the EU rules for the operation of the pipeline. He stressed that therefore, the procedures concerning the Gas Directive have no impact on the finalisation of construction works.