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Brussels, 19 March 2009

EU – Russia Energy Dialogue

I Objectives and functioning of the EU – Russia Energy Dialogue

On the occasion of the sixth EU-Russia Summit (Paris, 30 October 2000), it was agreed to institute an Energy Dialogue between the EU and Russia in order to enable progress to be made in the definition and arrangements for an EU-Russia Energy Partnership.

a. Objectives

The overall objective of the energy partnership is to enhance the energy security of the European continent by binding Russia and the EU into a closer relationship in which all issues of mutual concern in the energy sector can be addressed while, at the same time, ensuring that the policies of opening and integrating energy markets are pursued. With the strong mutual dependency and common interest in the energy sector, this is clearly a key area of EU-Russia relations.

The energy partnership aims at improving the investment opportunities in Russia’s energy sector in order to upgrade and expand energy production and transportation infrastructure as well as improve their environmental impact, to encourage the ongoing 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.

The Dialogue continues to be a valuable tool for enhancing EU-Russian energy relations providing that there is commitment on both sides and that the Dialogue has the political impetus provided by energy PPC' s. It has permitted a good and frank debate at different levels between the EU and Russia and has allowed broad participation and involvement of the various Russian governmental bodies, the Commission, EU Member states and International Financial Institutions such as the EIB and EBRD, as well as a wide variety of EU and Russian energy companies.

b. Functioning

The functioning of the EU-Russia energy dialogue is based on several working levels. The Permanent Partnership Council (PPC), comprising the Russian Minister responsible for Energy, (Sergei Shmatko), Commissioner Piebalgs, and the Minister responsible for Energy from the current Presidency and the next Presidency. It is up to the EU Presidency to convene an Energy PPC. The next PPC will take place on 30 April 2009, with the presence of the Minister of Trade and Industry of the Czech Presidency, Martin Riman, Ms Maud Olofsson, Minister for Enterprise and Energy and Deputy Prime Minister of Sweden, the Energy Commissioner Andris Piebalgs and the Minister of Energy of the Russian Federation Sergei Shmatko.

At the political level, regular contacts are maintained by the Coordinators of the Energy Dialogue, Commissioner Piebalgs and Russian Minister Sergei Shmatko. At working level, regular contacts are maintained between the European Commission and Russian Ministry of Energy officials.

Following the last PPC in December 2008, it was agreed to restructure the Energy Dialogue Joint Thematic Groups into three new formations: Energy Strategies, Forecasts and Scenarios (i), Market Developments (ii) and Energy Efficiency (iii).

The Thematic Groups involve experts nominated by the Member States and Russia, the European industrial federations, IFI's and the European Commission. Organisational work in each Thematic Group is handled by the Secretariat, which consisted of representatives of the European Commission's Directorate-General Energy and Transport and the Ministry of Industry and Energy of the Russian Federation. The groups are co-chaired by an EU Member State and a Russian official, with the Commission (DG TREN) ensuring the Secretariat.

In addition, the EU-Russia Industrialists Round Table often covers energy issues and typically meets back-to-back with other Dialogue events.

c. Priorities and structure of the Thematic Groups

The Group on Energy Strategies, Forecasts and Scenarios (ESFS) exchange views on the EU and Russian strategies, policies and forecasts in the energy field. One of its main objectives is also to develop bilateral energy information systems. The first meeting of the Working group took place on 26 September 2007 in Moscow. The Group met twice in 2008, last time on the 3 December.

The Subgroup on Energy Economics was established in 2007. Its activities focus mainly on the raw material demand and supply matters.

The Group on Energy Market Developments aims at promoting trust and transparency in EU-Russia energy relations. In general the Thematic Group provides a good forum for exchanges of information on legal and regulatory developments in the energy market, including inter alia such issues as investment climate, third party access to infrastructure or electricity market liberalization. It also promotes increased security and predictability of energy markets in the supply, demand and transit sectors, especially through its contribution to the Early Warning Mechanism. The first meeting of the Working group took place on 18 September 2007 in Moscow. Last time the Group met on 4 December 2008 in Moscow.

A Subgroup on Investments was established and is focusing mainly on barriers to investments and enhancement of the investment climate.

A Subgroup on Infrastructure is currently establishing its work programme.

The work of the Group on Energy Efficiency is focused on the exchange of information on legislative and regulatory frameworks. Its main objective is to share the experience and knowledge on concrete projects in the field of energy efficiency, energy savings, gas flaring and renewable energy sources. The first meeting of the Group took place on 27 September 2008. The TG met twice in 2008: on 11 April in Brussels and 11 December in Moscow.

Meetings of the three Thematic Groups, their respective sub-groups and related joint EU – Russia conferences/seminars organised in 2008 served as a basis for the EU-Russia Energy Dialogue Progress Report signed by Russian Minister of Energy Sergei Shmatko and Commissioner Andris Piebalgs at the third ministerial meeting of the EU - Russia PPC on Energy on 8 October 2008 in Paris.

The next meeting of the EU - Russia Permanent Partnership Council on Energy will take place on 30 April 2009 in Russia (most probably in Moscow). Commissioner Andris Piebalgs, Czech Minister for Industry and Trade Martin Říman and Swedish Minister for Enterprise and Energy Maud Olofsson are expected to attend the EU-Russia Energy PPC. Other participants will be confirmed in the upcoming weeks.

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