The OPAL Exemption Decision: a comment on the Advocate General’s Opinion on its annulment and its implications for the Court of Justice judgement and OPAL regulatory treatment

In October 2016 the European Commission (EC) adopted an exemption decision, which exempted 50% of capacity in OPAL (one of the onshore pipelines connecting to Nord Stream 1) from third party access. It also prescribed non-discriminatory access to another 50% of capacity via auctions where both Gazprom and third parties were able to participate, guaranteeing the latter’s access to 20% of capacity. In September 2019, the General Court (GC) of the EU unexpectedly ruled to annul the decision on the grounds of it being in ‘breach of the principle of energy solidarity’, thus re-instating the 2009 exemption decision under which Gazprom cannot have access to more than 50% of OPAL capacity. In November 2019 Germany appealed the ruling at the Court of Justice (CJ) and in March 2021, a CJ Advocate General, Campos Sánchez-Bordona, delivered an Opinion in support of the GC ruling and recommending rejection of the appeal.

This Insight analyses the Opinion – which is contradictory in many respects – with a view to understanding its impact on the CJ judgement and future regulatory treatment of the OPAL pipeline. The Insight argues that, should the CJ agree with the Opinion and confirm that the principle of energy solidarity is a legal concept, then the assessment of its impact is likely to be made an integral part of the EC exemption decision-making process. However, it would be dubious if the CJ were not to define the criteria for such an assessment before requesting the EC to conduct it. The Insight considers Revision, Annulment, and Restoration as possible scenarios for the future of the 2016 exemption decision, with the Revision scenario – which could stipulate a fluctuating cap on OPAL capacity – being most likely.

By: Katja Yafimava