DAILY NEWS
Brussels, 25 April 2023
EU Energy Platform: Commission launches first call for companies to jointly buy gas
Today, the Commission is launching a first-of-a-kind process for European companies to register their gas purchase needs via the AggregateEU mechanism, to prepare for the joint purchasing of gas at EU level. This is a key milestone for the EU to prepare for next winter by refilling its gas storage in a coordinated and timely manner, using its collective market power to negotiate better prices with international suppliers.
Registered companies have one week, until 2 May, to respond to this first call for demand aggregation. After the individual companies' demands have been submitted, the required volumes will be aggregated and put out to tender on the global market. Once the AggregateEU mechanism matches the collective European demand with offers from international gas suppliers, the participating companies will enter into negotiations with suppliers on the contractual terms for the purchase and delivery of the gas. The Commission will not play any role in the negotiations. The first purchase agreements are expected before the summer.
Further tenders will be carried out on a regular basis, every two months over the next 12-month period. The possibility for companies to subscribe to the AggregateEU mechanism remains open. So far, 76 companies have registered, while others are in the process of subscribing. In addition, 11 companies are ready to provide services as a Central Buyer or an Agent on Behalf (see Questions and Answers).
Member States have committed to participate in demand aggregation for a minimum of 15% of their national gas storage targets, representing around 13.5 billion cubic metres of gas per year. The gas storage and joint gas purchasing targets were agreed in 2022 as emergency measures to respond to Russia's weaponisation of its energy supplies, and to the unprecedented energy prices since the Russian invasion of Ukraine. They aim to reduce price volatility, ensure secure and predictable energy supplies, and harness Europe's collective market weight. To deliver on the REPowerEU Plan and diversify the EU's energy supplies, Russian gas is excluded from joint purchasing.
Background
AggregateEU is the EU's mechanism enabling gas demand aggregation and joint purchasing. It was set up as a central component of the EU Energy Platform to support the EU's efforts to get rid of Russian gas by replacing it with more reliable alternatives. It aims to ensure sufficient gas supplies, whilst reducing the risk of companies outbidding each other on the global market. The Commission has contracted service provider Prisma European Capacity Platform GmbH to establish the demand aggregation and joint purchasing mechanism through a secure online platform. The Platform is accessible to companies from EU countries and Energy Community contracting parties. Ukraine, Moldova and Serbia have so far expressed interest in taking part.
The EU Energy Platform was created in April 2022, following the mandate of the European Council and in response to the need to diversify away from Russian gas. In October 2022, the European Council endorsed the joint purchasing of gas, to facilitate negotiations with reliable partners and seek mutually beneficial partnerships by exploiting the Union's collective political and market weight.
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Questions and Answers
EU Energy Platform
AggregateEU
REPowerEU
Quote(s)
Today marks a major step towards making the common purchase of gas at EU level a reality. The energy crisis has taught us that the EU works better when it acts in unity and solidarity. By allowing EU companies to pool gas demand together, AggregateEU will leverage the Union economic weight and help us ensure sufficient gas in our storage to get through next winter safely. It is equally important that we help restore full production capacity of EU energy-intensive industry, by tackling the high energy prices, so instrumental to our overall competitiveness.
Maroš Šefčovič, Vice-President for Interinstitutional Relations and Foresight - 25/04/2023
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Joint gas purchasing: The AggregateEU mechanism to increase energy security for Europe
1. What is AggregateEU and how is it linked to the EU Energy Platform?
AggregateEU is the new EU mechanism enabling demand aggregation and joint gas purchasing at the European level. It was set up following the adoption of Council Regulation (EU) 2022/2576 (the so-called “Solidarity Regulation”) which introduced EU-level gas demand aggregation and joint purchasing for the first time.
This piece of legislation was proposed by the Commission on 18 October 2022, agreed by Energy Ministers on 24 November, and formally adopted on 19 December as part of the EU's toolkit to tackle the energy crisis. The Regulation obliges Member States to aggregate demand for volumes of gas equivalent to at least 15% of their respective storage filling obligations.
The AggregateEU mechanism is managed by a service provider contracted by the Commission, Prisma European Capacity Platform GmbH. The mechanism allows companies to aggregate their gas demand and to match it with the most competitive supply offers on the global market. AggregateEU will establish a series of tenders for suppliers, through which EU companies will be able to buy both pipeline gas and LNG from the global market, with the exclusion of Russian supplies. It will create a transparent marketplace complementing the existing trading venues to bring many companies closer to the wholesale market and possibly new entrants into the LNG market. This should represent an opportunity not only to large resellers, but will also bring smaller customers, especially in landlocked countries, closer to the regional or global gas market.
Demand aggregation and joint purchasing is one pillar of the work of the EU Energy Platform, which was created to work on the diversification of EU gas supplies after Russia invaded Ukraine and Europe collectively decided to end its dependence on Russian fossil fuel imports.
The EU Energy Platform also carries out international outreach to external energy suppliers, including for the negotiation of political commitments and regulatory conditions to increase gas supplies. It is also responsible for coordinating efficient use of EU gas infrastructure, including LNG import capacity optimisation, to avoid bottlenecks and ensure smooth gas deliveries to all Member States.
2. Who can participate in AggregateEU?
The AggregateEU mechanism aims to collect and pool gas demand from companies established in the EU or in Energy Community countries and match it with the most competitive supply offers in time for the next storage filling season. This means that aggregation of demand is open to both gas consuming and gas trading companies from all EU countries and from Energy Community contracting parties (Albania, Bosnia-Herzegovina, Georgia, Kosovo, Moldova, Montenegro, Republic of North Macedonia, Serbia, Ukraine).
To be eligible to participate in tenders, the companies must first register with the service provider, PRISMA and subscribe to the AggregateEU mechanism. Both EU and non-EU companies can participate as suppliers, with the exclusion of Russian companies.
EU Member States must ensure that local companies submit their demand for an equivalent of 15% of each Member State's gas storage filling obligations, as set out in the gas storage regulation. However, the purchasing of gas by companies will remain entirely voluntary. Each company can participate either as a seller or as a buyer in any single tender at AggregateEU, but not both.
3. What does today's first call to submit gas demand mean for joint purchasing and what are the next steps?
The call launched today marks an important step in the process towards joint gas purchasing, as it is the first time companies are able to submit their gas demand through an EU-level aggregation mechanism. This is instrumental to prepare jointly for next winter and make the best use of the storage filling season.
The first window to place demand to buy gas via the AggregateEU mechanism will be open until 2 May and the submitted demand volumes will subsequently be aggregated. This will be followed in mid-May by a tendering exercise to attract bids from global gas suppliers to fulfil this demand. The tenders will be organised by the AggregateEU mechanism to attract competitive supply offers. After that, EU companies will be matched with suppliers and will be able to negotiate the terms of the supply contracts.
Such tenders will happen on a regular basis, approximately every two months until the end of 2023, allowing companies each time to contract gas for the next 12 months. This will assist the EU in reaching its goal to jointly purchase 15% of its annual gas storage targets and support a timely storage refilling process ahead of the next winter season.
EU Member States must fill their gas storage facilities to 90% of their capacity by 1 November 2023. Gas storage stood at 57% on 24 April 2023.
4. Is the Commission actively involved in negotiating contracts and buying gas?
The Commission will not engage in the purchase of gas and will not own any gas. Any contracting of gas takes place outside the mechanism and supply contracts will not be signed by the Commission, nor Prisma, but rather by the companies involved. This is important to ensure confidentiality of the transactions, preserve business secrets and ensure compliance with the EU competition rules. Competition rules will apply to information exchanges taking place in the framework of joint purchasing of gas.
Commercially sensitive information should only be exchanged bilaterally between the Agent/shipper on Behalf or the Central Buyer, on the one hand, and their respective individual customers, on the other hand. These bilateral exchanges should be limited to what is necessary for the purposes of negotiating and implementing the respective gas purchase agreements.
The Commission's role is to create the AggregateEU mechanism, design the aggregation and tendering process with the service provider PRISMA, and engage with Member States and companies to inform them and encourage their participation. The Commission will be informed of the purchasing process results with some data shared for tracking and transparency.
5. What is the added value for companies to participate in demand aggregation and joint gas purchasing?
AggregateEU offers a new opportunity to procure gas in addition to existing market places or practices, with enhanced transparency and cooperation. Participation of companies as buyers and sellers in AggregateEU will be cost-free. It is particularly valuable to smaller entities or those in landlocked countries to secure stable supplies of gas at lower prices, by gaining access to new suppliers and harnessing the EU's collective market weight. They might benefit from demand aggregation given the size of their demand or their lack of experience in contracting LNG. In particular, this access could be achieved with the assistance of central buyers or agents on behalf who will provide support in negotiating and transporting gas supplies. For suppliers, the Platform offers a possibility of securing contracts for aggregated volumes of gas and gaining access to new markets and customers.
6. How will companies negotiate the collective purchase and delivery of supplies?
It will be for buyers and sellers to negotiate supply contracts and terms of delivery. Such negotiations will take place outside the AggregateEU mechanism and are beyond the remit of the service provider. AggregateEU only serves as a mechanism to aggregate demand, tender it and match demand with supply.
To facilitate cooperation between the companies interested in acquiring gas jointly, the Commission proposes two types of cooperation model, referred to as Central Buyer and Agent on Behalf.
A Central Buyer is a company (possibly a large gas company) agreeing to purchase gas on behalf of other companies based on a bilateral contract. In cases where an individual company requesting a certain volume does not reach the minimum threshold of 300,000 MWh for LNG and 5,000 MWh for pipeline gas and/or does not have the necessary creditworthiness and expertise in negotiating and concluding purchase contracts, it can choose to cooperate with other buyers and place a joint demand bid through a Central Buyer.
An Agent on Behalf can provide complementary services to companies that have already negotiated directly with a supplier to buy a certain volume of gas. For example, an Agent on Behalf may provide services such as reservation of a delivery slot at an LNG terminal, transport from a ship to a point of consumption, or balancing services to companies that do not have the ability or the licenses to do so. In this case, companies that have concluded supply contracts with the support of the AggregateEU mechanism may want to entrust another company, likely a mid-stream operator, to provide these services so that the gas is delivered where it is needed.
PRISMA, the service provider of AggregateEU, has invited companies to express their interest in acting as a Central Buyer or Agent on Behalf. The list of such companies – so far 11 - has been published on the AggregateEU website. Companies willing to participate in the joint purchasing of gas with the support of a Central Buyer or Agent on Behalf may contact one of the companies listed on the AggregateEU website.
Cooperating with other companies is not mandatory, but it is an option that is available and aims to facilitate the purchase and delivery of gas that flows from the demand aggregation process. The two above-mentioned models are not exclusive, as there may be other forms of cooperation achieving the same objective. Companies may also contract a Central Buyer or an Agent on Behalf that is not listed on AggregateEU.
7. How will compliance with EU competition rules be ensured?
Participating companies need to ensure that the joint purchasing mechanism is compliant with the EU competition rules.
Commercially sensitive information should only be exchanged bilaterally between the companies offering the services as Agent on Behalf and Central Buyer and their individual customers, and this bilateral exchange should be limited to what is necessary for the purposes of negotiating and implementing the respective agreements. Commercially sensitive information exchanged in this context can be considered necessary if the companies concerned can explain how it relates to the agreement they are negotiating, why it needs to be exchanged and why it would be proportionate to the objective of the agreement.
If the companies offering the service as Agent on Behalf and Central Buyer are operating in the same market as one of their customers, they need to make sure that access to commercially sensitive information obtained from their customers for the purposes of carrying out their function as Agent on Behalf and Central Buyer is limited to staff dedicated to this function, and that such information is not shared with any other staff within the company.
The Commission stands ready to assist interested companies through informal guidance, including a guidance letter under the Commission Notice on informal guidance relating to novel or unresolved questions concerning Articles 101 and 102 of the Treaty on the Functioning of the European Union that arise in individual cases (guidance letters) 2022/C 381/07 and based on a reasoned request pursuant to paragraphs 10 to 12 of said Notice.
Press release
Technical questions and answers on AggregateEU
Joint gas purchasing
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Commission pays a further €1.5 billion in macro-financial assistance to Ukraine
The Commission has today made a third payment of €1.5 billion under the Macro-financial Assistance (MFA)+ package for Ukraine, worth up to €18 billion. With this instrument, the EU seeks to help Ukraine cover its immediate funding needs, with stable, predictable and sizeable financial support in 2023.
This support will help Ukraine to keep on paying wages and pensions and maintain essential public services running, such as hospitals, schools, and housing for relocated people. It will also allow Ukraine to ensure macroeconomic stability and restore critical infrastructure destroyed by Russia in its war of aggression, such as energy infrastructure, water systems, transport networks, roads and bridges.
Today's payment comes after the Commission found that Ukraine continued to make satisfactory progress towards implementing the agreed policy conditions and complied with reporting requirements, which aim to ensure the transparent and efficient use of the funds. Ukraine has notably achieved important progress to strengthen the rule of law, enhance financial stability, improve the functioning of the gas system and promote a better business climate. This finding will also enable the disbursement of two further monthly payments of €1.5 billion each in May and June.
Overall, since the start of the war, the support to Ukraine and Ukrainians amounts to around €68 billion. This includes financial, humanitarian, emergency budget and military support to Ukraine from the EU, Member States and the European financial institutions, as well as resources made available to help Member States cater for needs of Ukrainians fleeing the war.
President Ursula von der Leyen said: “Ukraine is successfully repelling Russia's aggression and at the same time driving forward essential reforms for its future. The brave people of Ukraine want their everyday lives to be as normal as possible. With the third tranche of €1.5 billion and a total of €18 billion in Macro-Financial Assistance the EU is making an indispensable contribution to ensure that Ukraine continues paying wages and pensions, keeps hospitals and schools running and is able to restore its infrastructure.”
More information is available in this factsheet.
(For more information: Veerle Nuyts – Tel.: +32 2 299 63 02; Laura Bérard - Tel.: +32 2 295 57 21)
Pact for Skills: Launch of large-scale Skills Partnership in the space sector
Today, with the support of the Commission, a large-scale Skills Partnership for the space sector dedicated to data, services and applications has been launched. It aims to empower workers with the skills needed for the development of future innovations and to achieve the aims of the EU's Space Strategy for Security and Defence.
In particular, the partnership will promote the collaboration between the space industry, training centres, academia and other partners; attract young professionals; develop new and existing regional initiatives and contribute to other training programmes, such as the Copernicus Academies, Copernicus Relays and other activities performed under the CASSINI initiative. This new partnership complements the existing Skills Partnership on aerospace and defence.
The EU's vibrant space economy for earth observation and positioning, navigation and timing accounted for around €40 billion in 2021. With the increasing need to develop space-based solutions for various industrial sectors, the space downstream market is expected to double in size and reach revenues of over €80 billion by 2030.
Commissioner for Jobs and Social Rights, Nicolas Schmit, said: “Skills and talents are a must to ensure the long-term leadership, innovation and competitiveness of our space industry. I welcome this new Skills Partnership which will help to match industry needs with education and training input and increase the availability of experts in the space sector.”
Commissioner for Internal Market, Thierry Breton, said: “The launch of the large-scale Skills Partnership on space services, data, and applications will strengthen Europe's leadership in the space sector. It will ensure the resilience and competitiveness of this vibrant sector that serves numerous Union policy priorities and a wide range of industrial needs.”
Following commitments in other economic ecosystems, this 17th Skills Partnership is a concrete implementation of the Pact for Skills, a flagship initiative under the European Skills Agenda. It contributes to the European Year of Skills and to the EU headline target that by 2030, at least 60% of all adults should participate in training every year.
(For more information: Sonya Gospodinova – Tel.: +32 2 296 69 53; Veerle Nuyts — Tel.: + 32 2 299 63 02; Flore Boutier - Tel.: +32 2 296 60 43; Flora Matthaes — Tel.: + 32 2 298 39 51)
State aid: 2022 Scoreboard shows that in 2021 State aid levels remained high to tackle economic effects of the pandemic
The annual State Aid Scoreboard provides a comprehensive overview of EU State aid expenditure based on the reports provided by the Member States. Today, the European Commission publishes the 2022 State Aid Scoreboard, relates to State aid expenditure in 2021. The 2022 edition shows the important contribution of State Aid policy in enabling Member States to continue to support companies in the difficult economic context brought about by the coronavirus pandemic, while preserving the level-playing-field in the Single Market.
In 2021, Member States spent approximately €335 billion under State aid measures for all objectives, excluding aid to railways and Services of General Economic Interest (‘SGEI'). Results show that about 57% of this support (i.e. around €191 billion) helped businesses seriously affected by the coronavirus pandemic to remain viable.
The 2022 State Aid Scoreboard shows in particular, that, for 2021 aid expenditure:
The COVID State aid Temporary Framework was adopted on 19 March 2020 to enable Member States to use the full flexibility foreseen under State aid rules to support the economy in the context of the coronavirus outbreak. The COVID Temporary Framework has been amended on 3 April, 8 May, 29 June, 13 October 2020, 28 January and 18 November 2021. As announced in May 2022, the COVID Temporary Framework has not been extended beyond the set expiry date of 30 June 2022, with some exceptions.
The COVID Temporary Framework complemented the ample possibilities available to Member States, such as measures providing compensation to companies for damages directly suffered due to exceptional circumstances or measures helping companies cope with liquidity shortages and needing urgent rescue aid.
Furthermore, on 23 March 2022, the Commission adopted a State aid Temporary Crisis Framework to enable Member States to use the flexibility foreseen under State aid rules to support the economy in the context of Russia's invasion of Ukraine. The Temporary Crisis Framework has been amended on 20 July and 28 October 2022 to complement the Winter Preparedness Package and in line with the REPoweEU Plan, as well as with the Regulation on an emergency intervention to address high energy prices (‘Regulation (EU) 2022/1854') and the Commission's proposal on a new emergency regulation to address high gas prices in the EU and ensure security of supply this winter.
On 9 March 2023, the Commission adopted a new Temporary Crisis and Transition Framework to foster support measures in sectors which are key for the transition to a net-zero economy, in line with the Green Deal Industrial Plan. The new Framework amends and prolongs in part the Temporary Crisis Framework, adopted on 23 March 2022 to enable Member States to use the flexibility foreseen under State aid rules to support the economy in the context of Russia's war against Ukraine. Together with the amendment to the General Block Exemption Regulation (‘GBER') that the Commission endorsed on the same day, the Temporary Crisis and Transition Framework helps speeding up investment and financing for clean tech production in Europe. It also assists Member States in delivering on specific projects under National Recovery Plans which fall within their scope.
Finally, since May 2012, the Commission has implemented an ambitious State aid reform programme (‘State Aid Modernisation') with three closely linked objectives: (i) foster growth in a strengthened, dynamic and competitive internal market; (ii) focus enforcement on cases with the biggest impact on the internal market; and (iii) streamlined rules and faster decisions.
The State Aid Modernisation exercise has allowed Member States to quickly implement State aid that fosters investment, economic growth and job creation, leaving the Commission to focus its State aid control on cases most liable to distort competition.
On 7 January 2019 the Commission launched, in line with the Commission's Better Regulation Guidelines, the evaluation of the rules, which were adopted as part of the State aid Modernisation exercise, including the Guidelines on State aid for environmental protection and energy and the Communication on important projects of common European interest (IPCEI) among others. The evaluation took the form of a “fitness check”. The aim was to provide a basis for decisions about whether to further prolong or possibly update the existing rules.
The results of the evaluation exercise are summarised in a Commission Staff Working Document. The milestones of the Fitness Check are listed on the Better Regulation Portal. All relevant State aid rules, including the already amended ones, can be found here.
The State Aid Scoreboard published today shows that also in 2021, Member States continued to mobilise massive levels of support to keep afloat businesses hit hard by the pandemic crisis. Data demonstrates that the temporary measures adopted were proportionate and necessary, corresponding to the economic damage suffered during the crisis.
Margrethe Vestager, Executive Vice-President in charge of competition policy - 24/04/2023
2022 Scoreboard
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