EU court upholds gas directive, dismisses Nord Stream 2 appeal

The European Union Court dismissed Nord Stream 2's complaint against the EU directive concerning natural gas transmission. The company, a Swiss subsidiary of Russia's Gazprom, sought to exempt a section of the pipeline from Russia to Germany from EU regulations.

However, the court found that these rules prevent competitive disruptions and safeguard supply security.

In April 2019, the European Union amended the gas directive, extending its scope to pipelines from third countries. The aim was to ensure equal competition rules in the EU market, which involved separating the roles of the pipeline owner and operator, thus allowing access to other companies.

Nord Stream 2 AG argued that it should not be subject to the new regulations because the pipeline's construction began before these rules were introduced. In May 2020, the EU Court dismissed the complaint. After the company's appeal, the Court of Justice of the EU deemed the complaint partially admissible and referred the case for reconsideration in July 2022.

On Wednesday, the EU Court again dismissed the complaint, emphasizing that applying EU law to the Nord Stream 2 pipeline section within member states prevents competitive disruptions and adverse effects on supply security. The court stated that the company could have anticipated the extension of internal market rules to pipelines originating from third countries.

Nord Stream 2, a twin pipeline from Russia to Germany through the Baltic Sea, was supposed to transport approximately 55 billion cubic metres of gas annually. Poland, Ukraine, the Baltic states, and the U.S. opposed the project because it increased Europe's dependence on Russian gas. The pipeline was completed but not launched due to Russia's invasion of Ukraine in February 2022.

In September 2022, Nord Stream 1 and 2 were damaged due to explosions. According to the Wall Street Journal, the sabotage was carried out by Ukrainian special services, supported by Poland.