European Commissioner for Competition Policy
GDF Suez commits to open French gas market
Opening remarks at Press conference
Brussels, 3 December 2009
Ladies and gentlemen,
Today, I can announce that the Commission has adopted another important antitrust decision in the energy sector, this time to open up the French gas market to more competition to the benefit of domestic and industrial gas consumers.
The decision concerns specific commitments by major French gas supplier GDF Suez to make available capacity in gas pipelines and liquefied gas terminals so that competitors can import gas into France.
This is the Commission's sixth major antitrust decision concerning the energy sector since we concluded the pan-European energy sector competition inquiry in January 2007, which identified serious competition problems.
The sector inquiry has allowed the Commission to identify where best to focus its antitrust resources on competition problems in energy markets. It has also served as a sound basis for drafting the third package of Directives to liberalise gas and electricity markets, which strengthen the rules on separation of supply and network companies and will facilitate cross-border trade in energy.
Today's decision renders legally binding commitments offered by GDF Suez to address Commission concerns about a possible abuse of its dominant position in the French gas sector.
The Commission's specific concern was that GDF Suez was blocking competitors' access to the infrastructure needed to import gas into France. It was doing this by reserving virtually all capacity on the relevant pipelines and liquefied natural gas terminals for very long periods (up to 20 years).
Any new potential supplier wanting to enter the French gas market obviously needs access to gas pipelines and liquefied natural gas terminals. Without sufficient access to this infrastructure, a company will be unable to import gas to offer to customers, no matter how competitive it may be. Consequently, preventing new market entrants from gaining access to infrastructure hinders the development of competition in energy markets by depriving industrial customers and household consumers of a choice of supplier.
GDF Suez has now committed to significantly reduce its share of long-term capacity reservations on French gas import pipelines and at liquefied natural gas terminals.
As a first step, GDF Suez will deliver large immediate releases of import capacity in 2010 and 2011. This will be about 10% of the total long-term import capacity into France. In addition, GDF Suez will continue to reduce its share of total long-term import capacity to below 50% by 2014. And 50% will remain the maximum threshold for their operations for ten years following that, until 2024.
In the light of GDF Suez's commitments, the Commission has now closed its investigation because it is satisfied that any competition concerns have now been removed. However, if ever GDF Suez were to break its commitments, the Commission could impose a fine of up to 10 percent of GDF Suez's total turnover.
This decision again showcases the great advantages of commitment decisions: the economic damage is ended quickly and there immediate benefits on the market.
The remedies will give competitors a real chance to enter the French gas market and so give consumers more choice of supplier and more competitive prices. This will in turn contribute towards an integrated and competitive single European energy market. This is essential to provide secure energy supplies at affordable prices.
In other words, today's decision is another concrete demonstration of the Commission's success in tackling the serious malfunctioning of energy markets identified by the sector inquiry. It follows:
the Distrigas commitment decision on the opening up of the Belgian gas market
the E.ON and RWE commitment decisions on the opening up of the German electricity and gas markets respectively
the decision to condemn the market sharing agreement between E.ON and GDF on the German and French gas markets and
the decision on ensuring fair access for electricity generators to Greece's lignite deposits.
I identified the need to tackle competition problems in energy markets as a top priority at the beginning of my mandate. This is because of the crucial importance of functioning energy markets for Europe's overall competitiveness and Europe's strategic goals of secure, affordable and greener energy.
I am delighted that the Commission has made concrete steps to meet this objective, as demonstrated by today's antitrust decision, the five that preceded it and the others that will follow.