Accession Negotiations with Croatia - Chapter 15:Energy - Montesquieu Instituut

 

COUNCIL OFBrussels, 31 August 2009

THE EUROPEAN UNIONPUBLIC

12651/09

LIMITE

ELARG 49

DOCUMENT PARTIALLY ACCESSIBLE TO THE PUBLIC

COVER NOTE from :

General Secretariat

to : Working Party on Enlargement and Countries Negotiating Accession to the EU

Subject : Accession Negotiations with Croatia

• - 

  Chapter 15: Energy

Delegations will find attached a draft Common Position on the above-mentioned chapter, submitted

by the Commission1.

EUROPEAN COMMISSION

Enlargement Directorate-General

Director-General

Brussels, 28 August 2009

ACCESSION NEGOTIATIONS

CROATIA

DRAFT COMMON POSITION

(Revision in response to additional information provided by Croatia and following Croatia's

Addendum, CONF-HR 4/09, to the Negotiating Position CONF-HR 21/07)

_____________________________________________________________________

Negotiating chapter 15

Energy

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I. INTRODUCTION

Position of Croatia

In its addendum (CONF-HR 4/09) of 26 June 2009 to its position CONF-HR 21/07 Croatia accepts

the acquis under chapter 15 as in force on 15 June 2009, and declares that it will be ready to

implement it by the date of its accession to the European Union, DELETED

On 11 July 2009, Croatia also adopted and sent to the Commission a "Report on the fulfilment of

obligations under chapter 15 Energy", in response to the closing benchmarks as set in the EU

common position CONF-HR 5/08.

In its report Croatia concludes that it has achieved a high level of alignment with the acquis under

this chapter, as well as considerable progress in its implementation. In particular, it has aligned its

legislation with the acquis relating to the security of supply, electricity and gas market liberalisation

and the promotion of renewable energy sources and energy efficiency.

DELETED

Overall evaluation

Croatia's overall alignment with the acquis in the area of energy is well advanced.

Croatia's alignment in the area of the internal energy market complies with the acquis of the

second internal energy market package. Nonetheless, efforts are still needed as regards adequate

implementation and the proper functioning of the Croatian energy regulatory agency (HERA).

Furthermore, it is noted that by date of accession Croatia will have to comply with the recent Third

Internal Market Package. In its report on the fulfilment of obligations under Chapter 15-Energy,

Croatia has indicated that it undertakes to ensure further alignment to this package.

Alignment with the acquis in the area of renewable energy sources (RES) is advanced but

substantial efforts will be required as regards its implementation. Croatia will not be able to achieve

its 2010 target for electricity production from incentivised renewable energy sources. However,

Croatia's Action Plan for Renewable Energy Sources provides a roadmap with the objective to

achieve an increase of its share of renewable energy sources to 20% of final energy consumption in

2020. Croatia's alignment in the area of energy efficiency is advanced, too, and progress has been

made in the transposition of the acquis related to the energy performance of buildings.

In the area of nuclear energy, Croatia has adopted implementing legislation related to the provision

of funds for covering Croatia's liabilities concerning the decommissioning of the Krsko Nuclear

Power Plant, including the disposal of radioactive waste and spent nuclear fuel. The overall

alignment with the Community acquis in this area is well advanced. In addition, Croatia has

adopted a Radioactive Waste Management and Spent Fuel Strategy. As regards nuclear safety and

radiation protection Croatia has upgraded the administrative capacity of the responsible Croatian

authorities, i.e. the State Office for Radiation Protection and the State Office for Nuclear Safety in

2008 and 2009 and decided to merge them into one institution to raise its efficiency.

However, Croatia needs to continue its efforts towards full alignment with the acquis under this

chapter and to continue upgrading its administrative capacities, in particular in the areas of RES and

energy efficiency and as regards completion of the administrative structure changes related to the

nuclear safety and radiation protection. In the case of RES, staffing needs to be completed at the

new department for renewable energy and energy efficiency and in the case of nuclear safety and

radiation protection the merging of the State Office for Radiation Protection and the State Office for

Nuclear Safety needs to be completed comprising all relevant inspection functions. Also, Croatia

needs to continue to complete the Radioactive Waste Management and Spent Fuel Strategy in

respect to storage and disposal options on Croatian territory. Furthermore, as regards Croatia's

Action Plan for Renewable Energy Sources Croatia needs to continue its efforts to increase its share

of renewable energy consumption to 20% in 2020.

On the basis of these considerations it can be concluded that the present chapter does not require

further negotiations at this stage.

II. DRAFT COMMON POSITION

This position of the European Union is based on its general position for the Accession Conference

with Croatia (CONF-HR 2/05), and is subject to the negotiating principles endorsed by the

Accession Conference (CONF-HR 5/05), in particular:

• - 

  any view expressed by either party on a chapter of the negotiations will in no way prejudge

the position which may be taken on other chapters;

• - 

  agreements - even partial agreements - reached during the course of the negotiations on

The EU encourages Croatia to continue the process of alignment with the acquis and its effective

implementation and enforcement, and in general develop already before accession, policies and

instruments as close as possible to those of the EU.

The EU notes that Croatia, in its addendum to its position CONF-HR 21/07 accepts the acquis

under chapter 15 as in force on 15 June 2009, and that Croatia declares that it will be ready to

implement it by the date of its accession to the European Union, DELETED

With regard to this request, the EU takes note of the Action Plan provided by Croatia for the

fulfilment of the relevant acquis requirements until 31 July 2012. On the basis of the information

provided in this Action Plan, which is clear and feasible, the EU considers Croatia's request

acceptable.

Security of supply

The EU notes that the required legislation on the minimum stocks of crude oil and petroleum

products and the Agency for Compulsory Stocks of Crude Oil and Petroleum Products is in place

and that the process of increasing physical stocks of crude oil will continue in line with the target

date of 31 July 2012.

DELETED

The EU takes note that Croatia has developed intervention plans in line with the acquis to be

deployed in case of difficulties that might occur with regard to the supply of crude oil and

petroleum products.

In this context, the EU calls attention to the newly adopted directive on oil stocks, which will make

several substantial modifications to Member States' obligations in this area.

The EU takes note of Croatia's adoption of a new Mining Act which guarantees that the

authorizations for the prospection, exploration and production of hydrocarbons will be granted on

the basis of a non-discriminatory principle. The EU notes that that Mining Act, aiming at full

alignment with Directive 94/22/EC will enter into force by accession.

In view of the above considerations, the EU considers that Croatia has met the requirements of the

first closing benchmark as set out in the EU Common Position (CONF-HR 21/07).

Internal energy market

The EU welcomes the legislative efforts Croatia has undertaken as regards the internal energy

market for gas and electricity.

The EU notes that the liberalisation of Croatia's electricity and gas markets has been completed with

the opening of the electricity market for all electricity customers on 1 July 2008, and the opening of

the gas market as of 1 August 2008, thus fully implementing Directive 2003/54/EC concerning

common rules for the internal market in electricity, and Directive 2003/55/EC concerning common

rules for the internal market in natural gas.

In addition as regards the cross-border exchanges in electricity, the EU underlines that at the

beginning of 2010 Croatia will need to submit a report on the outcome of the cross-border

transmission capacity allocation procedures covering the year 2009. This will include the

description and the result of the procedures on all borders and for all allocated timeframes including

the yearly capacity allocations for 2010.

The EU calls attention to the newly adopted acquis as regards the internal energy market and

welcomes Croatia's confirmation to ensure further alignment of its legislation to the following

acts:

Directive 2009/72/EC of the European Parliament and of the Council of 13 July 2009 concerning

common rules for the internal market in electricity and repealing Directive 2003/54/EC;

Regulation (EC) No 714/2009 of the European Parliament and of the Council of 13 July 2009 on

conditions for access to the network for cross-border exchanges in electricity and repealing

Regulation (EC) No 1228/2003;

Directive 2009/73/EC of the European Parliament and of the Council of 13 July 2009 concerning

common rules for the internal market in natural gas and repealing Directive 2003/55/EC ;

Regulation (EC) No 715/2009 of the European Parliament and of the Council of 13 July 2009 on

conditions for access to the natural gas transmission networks and repealing Regulation (EC)

No 1775/2005 ;

Regulation (EC) No 713/2009 of the European Parliament and of the Council of 13 July 2009

Renewable energy

Alignment to the acquis on renewable energy sources is advanced, although the system of

Guarantees of Origin remains to be established. The EU takes note of Croatia's Action Plan for

Renewable Energy Sources providing a roadmap with the objective to achieve an increase in its

share of renewable energy sources to 20% of final energy consumption in 2020, in accordance with

the EU's renewable energy sources objectives as reflected in Directive 2009/28/EC. The EU takes

further note of Croatia's commitment to prepare a National Renewable Energy Action Plan

(NREAP) in accordance with the timing and the format as set by the recently adopted EU directive

2009/28/EC. Furthermore, the EU takes note of the commitment to a binding national target for

Croatia of 20% gross final renewable energy consumption in 2020. This is equivalent to the targets

which Member States need to meet under Directive 2009/28/EC. Considering the current level of

development and the delays encountered by Croatia for achieving its target set for incentivised

renewable electricity sources by 2010, the EU underlines that Croatia will need to undertake

intensive efforts to reach the 2020 target. The EU stresses that developments in this area will be

monitored closely.

In view of the above considerations, the EU considers that Croatia has met the requirements of the

third closing benchmark as set out in the EU Common Position (CONF-HR 21/07).

Furthermore, as regards biofuels the EU takes note of the 2008 adoption of legislation on the

percentage of biofuels in the total share of fuels as well as on the quantity of biofuels to be placed

on the domestic market.

The EU notes that in May 2009 Croatia adopted the act on biofuels for transport, in line with the EU

acquis, particularly with Directive 2003/30/EC on the promotion of use of biofuels. The Act

regulates the production, trade and storing of biofuels, the use of biofuels in transport, the adoption

of programmes and plans for promotion of production and use of biofuels, authorities and the

responsibilities for defining and implementation of the policy of promotion of production and use of

biofuels, as well as the incentives for biofuels use. The EU recalls that under the new Renewable

Energy directive, the target for the share of renewable energy sources in the transport sector has

been set at 10% for 2020 and underlines that Croatia will need to undertake intensive efforts to

reach the 2020 target. The EU stresses that developments in this area will be monitored closely.

Energy efficiency

The EU takes note of the fact that Croatia adopted the Energy End-Use Efficiency Act in December

2008, aiming at increasing energy efficiency in end-use energy consumption sectors (households,

services, industry, transport).

The EU notes that the first National Energy Efficiency Action Plan from 2008 foresees an overall

indicative energy savings target of 9% for decreasing the final energy consumption in the period

2008-2016, in line with the Energy End-use Efficiency and Energy Services Directive.

The EU takes note of the adoption of the Action Plan for the implementation of the Energy

Performance of Buildings Directive, which has been transposed into the national legislation via the

Physical Planning and Building Act and the Energy End-Use Efficiency Act.

Nuclear energy, including nuclear safety and radiation protection

The EU takes note that in line with the Joint Convention on the Safety of Spent Fuel Management

and on the Safety of Radioactive Waste Management Croatia addressed the issues related to the

financing of the decommissioning and disposal of radioactive waste in relation to Krsko Nuclear

Power Plant, which is situated on Slovenian territory near the border with Croatia, and which is

jointly owned by both countries.

The EU takes further note that Croatia adopted a Strategy for Management of Radioactive Waste

and Spent Nuclear Fuel in July 2009.

In particular, the EU welcomes Croatia's confirmation to search for common solutions with

Slovenia on the management of low and intermediate level radioactive waste (LILW) and spent

nuclear fuel, while the final agreement still remains to be taken. The EU takes note of Croatia's

commitment to continue in the meantime with activities related to site exploration for a potential

LILW and spent fuel storage and disposal site on Croatian territory in case all other options fail.

In view of the above considerations, the EU considers that Croatia has met the requirements of this

part of the fourth closing benchmark as set out in the EU Common Position (CONF HR 21/07).

The EU notes that Croatia has upgraded the administrative capacity of the responsible Croatian

authorities, i.e. the State Office for Radiation Protection and the State Office for Nuclear Safety in

2008 and 2009.

The EU notes that to increase overall efficiency in this area and to ensure the required

* * *

In view of all of the above considerations, the EU notes that, at this stage, this chapter does not

require further negotiations.

Monitoring of progress in the alignment with and implementation of the acquis will continue

throughout the negotiations. The EU underlines that it will devote particular attention to monitoring

all specific issues mentioned above with a view to ensuring Croatia's administrative capacity, and in

particular its capacity to achieve an increase in its share of renewable energy consumption to 20%

in 2020. Particular consideration needs to be given to the links between the present chapter and

other negotiation chapters. A final assessment of the conformity of Croatia's legislation with the

acquis and of its implementation capacity can only be made at a later stage of the negotiations. In

addition to all the information the EU may require for the negotiations in this chapter and which is

to be provided to the Conference, the EU invites Croatia's to provide regularly detailed written

information to the Stabilisation and Association Council on progress in the implementation of the

acquis.

In view of all the above considerations, the EU will, if necessary, return to this chapter at an

appropriate moment.

As stated in the relevant sections above, the EU recalls that there may be new acquis between 15

June 2009 and the conclusion of the negotiations.

ANNEX

to the revised DCP on chapter 15

Energy

I. CLOSING BENCHMARK CHAPTER 15 (ENERGY)

The EUCP (CONF-HR 5/08) stated that the provisional closure of negotiations on chapter 15

(energy) could be envisaged, once the following closing benchmarks have been met:

· Croatia adopts a new mining act, aiming at full alignment with Directive 94/22/EC on the

conditions for granting and using authorizations for the prospection, exploration and production

of hydrocarbons and coming into effect by the date of accession at the latest.

· Croatia fully implements Directive 2003/54/EC concerning common rules for the internal market

in electricity, Directive 2003/55/EC concerning common rules for the internal market in natural

gas, and Regulation (EC) No. 1228/2003 on conditions for access to the network for cross-border

exchanges in electricity.

· In accordance with Directive 2001/77/EC on the promotion of electricity produced from

renewable energy sources in the internal electricity market, Croatia sets an appropriately

ambitious target for the percentage of electricity produced from renewable energy sources to be

achieved by the deadline set in the directive, and commensurate with the objective to achieve an

increase in the EU's share of renewable energy consumption from around 7% in 2005 to 20% in

2020, as agreed by European Council in March 2007.

· Croatia demonstrates that it will have by the time of accession the adequate administrative

capacity to properly implement and enforce the relevant legislation in all areas related to nuclear

safety. In particular, Croatia presents to the Commission a waste management strategy in line

with the Joint Convention on the Safety of Spent Fuel Management and on the Safety of

II. ASSESSMENT OF THE FULFILMENT OF THE CLOSING BENCHMARKS

On 11 July 2009 Croatia adopted and sent to the Commission the Report on the fulfilment of

obligations under Chapter 15 energy, in response to the closing benchmarks established by the

Council under this chapter.

Croatia has significantly aligned its legislation with the acquis in this chapter and achieved

considerable progress in its implementation. In particular, Croatia has made substantial progress as

regards the internal energy market, which is now essentially fully in line with the acquis. Croatia

has withdrawn its request for a transitional period as regards cross-border exchanges in electricity

and brought its legislation on the allocation and the use of cross-border capacities fully in line with

the acquis. Moreover, a new mining act has been adopted in line with the EU acquis and to be

implemented by accession. In the area of nuclear energy, Croatia has adopted implementing

legislation related to the provision of funds for covering Croatia's liabilities concerning the

decommissioning of the Krsko Nuclear Power Plant. Croatia has adopted a Nuclear Waste

Management Strategy and upgraded the administrative capacity of the responsible Croatian

authorities, i.e. the State Office for Radiation Protection and the State Office for Nuclear Safety in

2008 and 2009. In July 2009 Government has taken a decision to merge these two offices into one

to increase the efficiency, and with inclusion of the relevant inspection functions, to increase the

required independence. It is the Commission's assessment that, on this basis, Croatia fulfils the

closing benchmarks for this chapter.

II.a. Assessment of the fulfilment of the first closing benchmark (New Mining Act)

Thus, Croatia ensures that from accession authorisations are granted on the basis of objective,

published criteria and following a procedure in accordance with Directive 94/22/EC, meeting the

benchmark fully.

II.b. Assessment of the fulfilment of the second closing benchmark (Internal energy market

and cross-border exchanges in electricity)

The liberalisation of Croatia's electricity and gas markets has been completed with the opening of

the electricity market for all electricity customers on 1 July 2008, and the opening of the gas market

as of 1 August 2008.

Furthermore, as regards electricity, Croatia's transmission system operator (HEP-TSO) adopted in

December 2008 an Ordinance on the allocation and the use of cross-border capacities that is fully

aligned with Regulation (EC) No 1228/2003 and its Annex (Congestion Management Guidelines).

This ensures that from 1 January 2009 onward market-based allocation methods as defined by said

Regulation and its Annex are applied In practical terms, joint monthly auctions take place at the

Hungarian-Croatian border. Discussions have also been initiated with the rest of neighbouring

TSOs to introduce joint auctions at all borders.

DELETED

As regards gas, Croatia has adopted the Gas Market Act and its Amendments providing for the

Furthermore, pursuant to legal requirements, the Croatian energy regulatory agency (HERA) has

started to develop the remaining two pieces of legislation relating to the gas sector, the Ordinance

on the Fee for the Connection to the Gas Distribution or Transmission System and for the Increase

of the Connection Capacity and the Methodology for the Provision of Natural Gas Balancing

Services in the Gas Pipeline System, whose adoption is expected in the second half of 2009.

The reforms carried out by Croatia in the electricity and gas sector as well as the legislation that has

been passed on the allocation and the use of cross-border capacities mean that the benchmark has

been fully met.

As regards the cross border exchanges in electricity, Croatia will submit a report on the outcome on

the end of the year auctions on allocation of cross-border capacities.

II.c. Assessment of the fulfilment of the third closing benchmark (Renewable energy sources)

Croatia has put in place most of the necessary primary and secondary legislation to align with

Directive 2001/77/EC on the Promotion of Electricity Produced from Renewable Energy Sources in

the Internal Electricity Market.

Croatia's Action Plan for Renewable Energy Sources provides a roadmap with the objective to

achieve an increase in its share of renewable energy sources to 20% of final energy consumption in

2020.

Overall, the Action Plan provides an overview of all policy measures to be implemented and actors

involved in order to achieve the appropriately ambitious targeted increase. Croatia has furthermore

II.d. Assessment of the fulfilment of the fourth closing benchmark (Nuclear energy, including

nuclear safety and radiation protection)

The Croatian Strategy for Management of Radioactive Waste and Spent Nuclear Fuel provides both

an analysis of the state, circumstances and methods for the management of radioactive waste and

spent nuclear fuel from 2009 to 2019. The strategy refers to the Joint Convention on the Safety of

Spent Fuel Management and on the Safety of Radioactive Waste Management.

In particular, the Strategy confirms Croatia's intention to search for common solutions with

Slovenia on the management of low and intermediate level radioactive waste (LILW) and spent

nuclear fuel. The Strategy confirms Croatia's commitment to continue in the meantime with

activities related to site exploration for a potential LILW and spent fuel storage and disposal on

Croatian territory in case all other options should fail

As regards the upgrading of its administrative capacity Croatia has significantly strengthened the

relevant Croatian authorities in 2008 and 2009. Three additional civil servants were recruited for the

State Office for Radiation Protection, and another two for the State Office for Nuclear Safety. To

increase overall efficiency in this area and independence, Croatia has also decided to merge both

offices under the authority of the Croatian government, in line with the Commission's and IAEA's

recommendations. All budgetary resources of both offices will go to the newly created institution,

which will provide for sufficient funding for its operations. In addition Croatia will ensure that the

relevant inspection functions are included in the merged setting. The strategy ensures that sufficient

qualified staff and adequate financial services are available to support the safety of facilities for

III. CONCLUSIONS

In view of the above, in particular the assessment presented in Part II, the closing benchmarks under

chapter 15 (energy) can be considered as being met.

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