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German court rejects Nord Stream 2 AG application for derogation from Third Energy Package

Published by , Editorial Assistant
World Pipelines,

PGNiG SA and PST welcomed [the] judgment of the Higher Regional Court in Düsseldorf, recognising the arguments of both companies and upholding the decision of the Federal Network Agency (BNetzA) to reject the application submitted by Nord Stream 2 AG for derogation from the provisions of the Third Energy Package.

The German court shared the arguments raised by both companies from PGNiG Group, stating that Nord Stream 2, as a gas pipeline not completed before the date of the entry into force of amendment of the Gas Directive (i.e. 23 May, 2019), does not meet the basic condition entitling to apply for a derogation.

“In the judgment Higher Regional Court in Düsseldorf shared the arguments of our companies raised consistently in the course of proceedings before the German regulator and the Court. Thus, it was unequivocally confirmed that Nord Stream 2 must operate in accordance with the rules resulting from the Third Energy Package,” emphasised Pawel Majewski, President of the Management Board of PGNiG SA.

The derogation procedure was initiated at the request of Nord Stream 2 AG on 10 January, 2020. In its request, the company applied for a derogation from the fundamental rules resulting from the Third Energy Package: ownership unbundling, third-party access and transparent and cost-reflective tariffs. PGNiG SA and PST joined the proceedings before the German regulatory authority, presenting extensive arguments confirming the lack of fulfillment of formal and substantive conditions for granting a derogation. On 15 May, 2020, the German regulatory authority shared the arguments presented by both companies and rejected the application submitted by Nord Stream 2 AG. The Swiss company appealed against this decision to the Higher Regional Court in Düsseldorf, which in today's judgment agreed with PGNiG SA and PST’s arguments, upholding the decision of BNetzA.

On 11 June, 2021, Nord Stream 2 AG submitted an application to the German regulatory authority for certification under the preferential ITO model. As in the case of the derogation procedure, PGNiG SA and PST submitted an application for admission to the procedure, presenting preliminary arguments that there are no legal grounds for granting certification under the requested model. The PGNiG Group is consistently taking steps to ensure the enforcement of EU law in the case of Nord Stream 2.

The PGNiG Group, in cooperation with the Polish Government, has consistently taken steps to ensure that EU law is enforced both with regard to the Nord Stream 2 and other gas pipelines in CEE region. It is worth to recall that Poland won the case concerning the OPAL pipeline, an onshore extension of Nord Stream 1, before the Court of Justice of the European Union. In its verdict the Court indicated that the European Commission violated the principle of energy solidarity by issuing a decision on revision of the exemption from principles of EU law.

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