Meeting the energy challenge: EU cooperation with its Eastern Neighbours

A vital cooperation
Working with neighbours for a secure energy supply
Sustainable Energy for All
Regional cooperation
The INOGATE international energy cooperation programme
Energy and the Eastern Partnership
The Covenant of Mayors
The Energy Community
Bilateral relations
EU-Russia energy relations
EU-Ukraine energy relations
Features, photos, videos and more
Useful links
A vital cooperation
The European Union’s energy requirements are growing, as is its need to import fuel. At the same time, the countries to the east of the EU are seeking to improve the use of the region's significant energy resources. Cooperation between the EU and its Eastern Neighbours can create predictable and transparent energy markets, capable of stimulating investment and economic growth as well as security of energy supply.
This is the challenge, as spelled out by the European Commission's DG Development and Cooperation EuropeAid in its webpage dedicated to energy cooperation with Europe's Eastern Neighbours.
In November 2004, the Baku Ministerial Conference opened the door to expanded energy co-operation between the EU and the countries of the Black Sea, the Caspian Basin and their neighbours, namely: Armenia, Azerbaijan, Belarus, Georgia, Kazakhstan, Kyrgyzstan, Moldova, the Russian Federation (which has observer status only), Turkey, Turkmenistan, Ukraine and Uzbekistan. Tajikistan joined in 2006.
In November 2006, an energy ministers’ conference held in Astana, Kazakhstan, specifically mapped out directions for future co-operation, with a particular focus on convergence of energy markets, enhancement of security of supply, diversification of energy sources (especially towards renewable energies) and energy efficiency, as well as on the need for furthering investments. These are turned into practical projects via the INOGATE international energy cooperation programme (see below for more info).
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Working with neighbours for a secure energy supply
In an increasingly interconnected world, cooperation with its neighbours is also essential to the EU's own energy needs, as spelled out in the opening statement from the External Dimension webpage of the EU's Directorate General on Energy: "If it is to achieve its goal of secure, competitive and sustainable energy, the EU must involve and cooperate with other countries, be they producers, transit countries or consumers."
EU neighbours include both producers and transit countries essential to the EU's energy supply, at a time when, according to the European Commission, the share of imported energy in the EU – currently 80% for oil and over 60% for gas – continues to rise.
In September 2011, the European Commission adopted a Communication on security of energy supply and international cooperation, setting out for the first time a comprehensive strategy for the EU's external relations in energy, which proposes greater transparency among Member States on energy agreements with third countries and stronger coordination in relations with partner countries.
Presenting the Communication, Energy Commissioner Günther Oettinger said: “EU energy policy has made real progress over the last several years. Now, the EU must extend the achievements of its large internal energy market beyond its borders to ensure the security of energy supplies to Europe and foster international energy partnerships.”
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Sustainable Energy for All
Sustainable energy is a key contributor to energy security. Welcoming the United Nations' rallying call in the framework of the 2012 UN Year of Sustainable Energy for All, the EU has set out an ambitious agenda to help achieve this key objective by 2030. As spelled out in the EU's Agenda for Change, access to energy is one of the top priorities of the European Commissioner for Development, Andris Piebalgs.
The European Commission supports the UN initiative with the three interlinked objectives:
       ensuring universal access to modern energy services;
       doubling the rate of improvement in energy efficiency;
       doubling the share of renewables in the global energy mix.
Speaking at the European launch of the Year of Sustainable Energy for All in February 2012, Commissioner Piebalgs said: "With around €2 billion of grants allocated to the energy sector in the developing countries during the last 7 years, the EU is a leader in empowering the world. Through the promotion of our technology and expertise combined with a targeted use of our aid funding, we will aim to increase access to modern energy services for the world's poorest."
The European Commission is organising a Sustainable Energy for All summit, gathering high-ranking decision-makers to engage the development community to achieve the Sustainable Energy for All initiative. The summit will take place on 16 April in Brussels.
The CIUDAD programme
As part of its commitment to sustainable energy, the EU funds the €14 million interregional CIUDAD programme devoted to sustainable urban development. The programme funds 21 projects that aim to help local governments in the ENPI region address urban development problems in a sustainable manner, promoting cooperation between local actors and their EU counterparts. One of its three thematic priorities is environmental sustainability and energy efficiency.
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Regional cooperation
The INOGATE international energy cooperation programme
INOGATE – which originally stood for 'Interstate Oil and Gas Transport to Europe' – is an international energy co-operation programme between the European Union and the Partner Countries of Armenia, Azerbaijan, Belarus, Georgia, Kazakhstan, Kyrgyzstan, Moldova, Tajikistan, Turkmenistan, Ukraine and Uzbekistan.
They have agreed to work together, implementing a number of projects aimed at achieving the following four major objectives:
  1. Converging energy markets on the basis of the principles of the EU internal energy market taking into account the particularities of the involved countries;
  2. Enhancing energy security by addressing the issues of energy exports/imports, supply diversification, energy transit and energy demand;
  3. Supporting sustainable energy development, including the development of energy efficiency, renewable energy and demand side management;
  4. Attracting investment towards energy projects of common and regional interest.
On behalf of the European Union, the INOGATE Programme is represented by three Directorates-General of the European Commission:
On behalf of the Partner Countries, the INOGATE Programme is represented by the respective Energy Ministries of the 12 Partner Countries.
The INOGATE programme has been a trailblazer for energy co-operation in this region. It originally aimed to promote the regional integration of pipeline systems and to facilitate oil and gas transport within the Newly Independent States (NIS) and onwards to EU markets. In recent years, INOGATE's scope has been extended to cover issues relating to electricity, renewable energy and energy efficiency. In addition, the programme encourages private investment and support from international financial institutions. INOGATE’s technical secretariat is based in the Ukrainian capital Kyiv.
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Energy and the Eastern Partnership
Energy security is a major aspect of the Eastern Partnership between the European Union and Armenia, Azerbaijan, Belarus, Georgia, Moldova and Ukraine. For this purpose, an Eastern Partnership Platform on Energy Security (Platform 3) was established by the Eastern Partnership Summit of May 2009 and has held biannual meetings since then.
In its 2012-13 work programme, Platform 3 has confirmed the four core objectives pursued from 2009 until 2011:
·      enhancement of framework conditions and solidarity;
·      support for infrastructure development, interconnection and diversification of supply;
·      promotion of increased energy efficiency and use of renewable sources;
·      regulatory framework and approximation of energy policies.
To facilitate regional cooperation between partner countries and EU Member States, meetings will be held in Brussels and in partner countries. These will allow for a ‘special focus’ on a host country, with presentations dedicated to its energy policy, investment opportunities, and legislative framework facilitating foreign investment and international cooperation in energy field.
A new activity will also be undertaken on ‘Cooperation in establishment and strengthening of a regulatory framework in nuclear safety’, with a focus on two main elements: comprehensive risk and safety assessments (‘stress tests’) and the Instrument for Nuclear Safety Cooperation.
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The Covenant of Mayors
The Covenant of Mayors is a European movement through which local and regional authorities voluntarily commit to increase energy efficiency and the use of renewable energy sources on their territories, which is also open to local authorities beyond the borders of the European Union. By their commitment, Covenant signatories aim to meet and exceed the European Union’s 20% CO2 reduction objective by 2020. Local and regional authorities have a particularly important role to play given that 80% of energy consumption and CO2 emissions is associated with urban activity.
As of April 2011, 3,754 cities and towns in all 27 EU Member States and in third countries as far afield as Kyrgyzstan and Argentina had signed the Covenant, representing a population in excess of 159 million people.
Support to the Covenant of Mayors was given political impulse within the framework of the Eastern Partnership, with the Work Programme of the Energy Security Platform identifying the promotion of participation in the Covenant of cities from the Eastern Partnership as one of the major priorities.
In the Eastern Neighbourhood, 41 towns and cities had signed the Covenant by April – 25 in Ukraine (including the capital Kyiv), 10 in Moldova (including the capital Chisinau), 4 in Georgia (including Tbilisi), 1 in Armenia and 1 in Belarus.
In March 2012, the EU awarded five grants under a €2.5 million call for proposals for actions supporting the participation of Eastern Partnership and Central Asian cities in the Covenant of Mayors, while it is also funding a €2.15 million support project 'Covenant of Mayors Going East', with a Covenant of Mayors branch office in Lviv to help advise Eastern Partnership cities wanting to participate in the initiative. A separate EU-funded project, ‘Sustainable Urban Energy in the ENPI region – towards the Covenant of Mayors (SURE)’, implemented under the CIUDAD programme, has helped Polotsk in Belarus to join the Covenant.
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The Energy Community
The Energy Community entered into force in 2006, and aims to extend the EU internal energy market to South East Europe and beyond, and enhance the overall security of supply. The parties have committed themselves to liberalise their energy markets and implement key EU legal acts in the area of electricity, gas, environment and renewable energy.
Among the Eastern Partners, Moldova (since May 2010) and Ukraine (as of February 201) are both full members of the Energy Community. The Parties to the Treaty establishing the Energy Community are theEuropean Unionon the one side, andthe contracting parties, namely Albania, Bosnia and Herzegovina, Croatia, theformer Yugoslav Republic of Macedonia, Moldova, Montenegro, Serbia, Ukraine and theUnited Nations Interim Administration Mission in Kosovo, on the other. Armenia and Georgia, as well as Norway and Turkey, have observer status.
The general objective of the Energy Community is to create a stable regulatory and market framework in order to:
  • Attract investment in power generation and networks in order to ensure stable and continuous energy supply that is essential for economic development and social stability;
  • Create an integrated energy market allowing for cross-border energy trade and linked to the EU market;
  • Enhance security of supply;
  • Improve the environmental situation in relation to energy supply in the region.
In order to pursue these objectives, the main instrument of the Energy Community Treaty is the implementation of key parts of EU legislation:
  • The electricity and gas directives and regulations (including security of supply);
  • Key environment directives relevant for the energy sector;
  • Key directives on the promotion of renewable energy, energy efficiency and biofuels;
  • The main principles of the EU competition policy.
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Bilateral relations
EU-Russia energy relations
Russia is the largest oil, gas, uranium and coal exporter to the EU. Likewise, the EU is by far the largest trade partner of the Russian Federation in energy goods. Based on this mutual interdependency and common interest in the sector, the EU and Russia have developed a close energy partnership, launching the EU-Russia Energy Dialogue in 2000.
The energy partnership within the EU-Russia Energy Dialogue aims to improve investment opportunities in the energy sector to ensure continued energy production, to secure and expand transportation infrastructure, as well as to reduce the environmental impact. Other important objectives are to encourage the opening up of energy markets, to facilitate the market penetration of more environmentally friendly technologies and energy resources, and to promote energy efficiency and energy savings on the way to a low-carbon economy.
Following the gas dispute from 2009, the EU and Russia consider it essential to further reinforce mutual confidence by establishing an Early Warning Mechanism. This instrument ensures rapid communication and aims to prevent further supply interruptions in the field of gas, oil or electricity.
On 24 February 2011, Commissioner for Energy Günther Oettinger and Russian Energy Minister Sergej Shmatko signed a Common Understanding on the Preparation of the Roadmap of the EU-Russia Energy Cooperation until 2050.
The EU-Russia Energy Dialogue is led by the EU’s Commissioner for Energy and by the Russian Minister for Energy. Political steering takes place in the Permanent Partnership Council (PPC) on energy, which comprises the European Commissioner for Energy, the current and incoming EU Presidency and the Russian Minister for Energy.
Since 2012, the daily work of the PPC is carried out by four Thematic Groups, on Energy Markets and Strategies, on Electricity, on Nuclear Energy, and on Energy Efficiency and Innovations.
In addition, a Gas Advisory Council consisting of representatives of leading EU and Russian gas companies and of experts from Russian and European academic research organisations has been set up. It assesses the development of the gas markets and will provide recommendations for long-term EU-Russia gas cooperation.
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EU-Ukraine energy relations
Ukraine is a key transit country for energy resources from Russia to the EU, particularly for gas, where some 20% of the gas consumed in the EU is transited. A major challenge is the need to guarantee the overall performance, safety and security of the Ukrainian natural gas transit network and this has been one of the main objectives of EU-Ukraine energy co-operation since 2001.
Energy cooperation between the EU and Ukraine is guided by the 2005 Memorandum of Understanding on Energy signed between the two sides, setting out four roadmaps for bilateral co-operation, to which a fifth was added later. These cover:
  • The safety of operating Ukrainian Nuclear power plants
  • The integration of electricity and gas markets
  • The security of energy supplies and the transit of hydrocarbons
  • The coal sector
  • Energy efficiency and renewable energies
Progress was highlighted in the sixth joint EU-Ukraine report on the implementation of the Memorandum of Understanding, which was published in March 2012.
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Features, photos, videos and more
The ENPI Info Centre has brought together a host of materials illustrating the impact on the ground of energy cooperation between the EU and its Eastern Neighbours.
Feature stories, including:
Photo galleries, including Energy: EU cooperation with neighbours and photos from projects in Ukraine, Georgia, and Moldova.
A video gallery including an ENPI Info Centre video on Energy cooperation with Eastern Neighbours, and also bringing together a range of EU and project videos on energy cooperation.
The EU Neighbourhood library, hosting key documents on energy cooperation.
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Useful links
ENPI Info Centre – energy webpage
ENPI Info Centre – energy features
ENPI Info Centre – energy photo galleries
ENPI Info Centre – energy quotes
ENPI Info Centre – EU Neighbourhood Library energy documents
DG Energy external dimension – Security of supply and international cooperation
DG Energy external dimension – EU-Russia energy relations
DG Energy external dimension – EU-Ukraine energy relations
DG Energy external dimension – Eastern Partnership
DG Energy external dimension – Caucasus and Central Asia
DG Energy external dimension – Energy Community
Energy Community website
EU Sustainable Energy for All Summit
United Nations Sustainable Energy for All
DG Development and Cooperation EuropeAid – Energy
DG Development and Cooperation EuropeAid regional cooperation east – energy
European External Action Service – External action and energy policy
The Covenant of Mayors
INOGATE international energy cooperation programme
Eastern Partnership Platform 3 Energy Security work programme 2012-13:

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