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European Commission - Speech - [Check Against Delivery]

Speech by Vice-President Maroš Šefčovič at the High-level Conference "EU energy cooperation with the Eastern Neighbourhood and Central Asia"

Brussels, 17 March 2016

Minister Kaladze, Minister Demchyshyn, my friend, Commissioner Hahn,

Colleagues from the EU institutions, Director General Ristori, Deputy SG Leffler, and Deputy DG Mathernová,

Ladies and gentlemen,

 

Looking around this room I can recognise some of the most prominent figures from the EU, Partner Countries, international financial institutions, think tanks, the private sector and academia. And such a gathering is timely and appropriate as we have a good reason to celebrate. INOGATE, as you all know, is one of the longest running energy technical assistance programmes funded by the EU with a total amount of over €150 million. INOGATE paved the way to the Baku Initiative of 2004 and the Astana Ministerial Conference 2006.

I am sure you have had very interesting discussions this morning about these two decades of fruitful energy cooperation across the entire region of Europe, our eastern neighbours, and Central Asia.

Indeed, a lot has been achieved since the establishment of the INOGATE Technical Secretariat in Kiev back in the 1990's. Since then INOGATE has worked on mapping and examining the infrastructure across the region, it has brought about the 1999 treaty for governing cross-border oil and gas transit, and it has strongly supported the EU's sustainable energy initiatives when it comes to both renewables and energy efficiency. All in all, INOGATE implemented some 70 projects, bringing together hundreds of stakeholders across this vast area.

But INOGATE's success is even more impressive when keeping in mind the geographic, political, and temporal scope of this cooperation. Think back on how our region looked when INOGATE started back in 1996; the EU consisted of 15 countries; the Dayton Agreement had just been signed, and many of our neighbours were newly-independent, some of which were in the midst of building their democratic institutions. Gas and oil prices in 1996 were actually similar to today's but over the course of 20 years we have seen them fluctuate as never before. The existing infrastructure was by far less expansive, and of course available technologies were nowhere near what we have today. Back then, renewables energies were not on everybody's lips and storage solutions hardly existed.

I am mentioning this in order to remind ourselves why it is time to refresh our cooperation framework, shake off the dust and align it with the geopolitical realities of 2016 and those of the years to come. Today we understand even better the difficulty to ensure energy security when depending on too few sources of energy supply. Today we better understand the devastating effects of pollution and CO2 emissions but we have also found alternative sources. Today, we are committed by the legally binding Paris Agreement to reduce CO2 emissions. This applies to the EU as well as our partners in the Eastern neighbourhood and Central Asia; it applies to the whole world.

The 20th anniversary of INOGATE therefore represents a turning a new page in our energy cooperation; by no means will we loosen our cooperation – but the mechanisms will be updated. We are concluding a very successful programme and introducing a new one to replace it. As you know we are about to launch the follow up to INOGATE in two months' time and the new programme will last until 2020 with a budget of €21 million. The new programme will reflect the current reality I just described. We are making sure it's future proof.

What does that mean in practice?

First, we are entrusting the continuation of the programme with the International Energy Agency, the Energy Community, and the Energy Charter. This is no coincidence, it is a sign of the level of trust and close relationship that the EU enjoys with these international organisations. It also insinuates the role that the EU plays today on international energy fora, as the largest energy importer in the world.

The new actions will focus on collecting comparable data which can feed into policy-making across our regions; on policy analysis and recommendations based on best practices and experiences; on improving our legislative and regulatory framework; and sharing all this information with all the relevant stakeholders.

And these actions are perfectly in line with the Energy Union Strategy which we published in February of last year, as the Energy Union is an outward looking project which places great importance on our relations with the EU's partner countries. It is also perfectly in line with the Security of Supply Package which we published in February of this year, where a great deal of importance was placed on diversifying the EU's energy sources, on ensuring legal coherence of our intergovernmental agreements and the transparency of contracts with our energy suppliers.

As you can see, our eastern neighbourhood and Central Asia play a central role in the Energy Union – which is one of the EU's most strategic projects and top priorities. And the presence of senior officials from across the EU services here today shows the great implication of energy cooperation, not only our energy policy but also on our neighbourhood and foreign policy. And of course energy security impacts overall security including social security and leads eventually to economic growth and jobs and to political stability and resilience.

In this respect, it is worth noting that the review of the European Neighbourhood Policy, which was conducted last year by Commissioner Hahn, devotes an entire chapter to energy security and climate action. It responds to the messages of political leaders expressed at the Eastern Partnership Summit in Riga in May 2015. It provides for better taking into account all security related aspects and the different socio-economic and political situation in EU partner countries when designing joint action.

I know that this partnership is as crucial for each of the partner countries. The pace of integration might be different, the political context may vary but we have come to join this common project out of recognition of its common benefit – to all its members.

Beyond mere interests, we also share values. Among those values are the commitments we all made last December in the Paris Agreement which I mentioned earlier. It is also about the principles set out in the Energy Union strategy, at the Riga Summit and in the ENP review: all of which emphasise the importance of diversification as a means to increase our security of supply.

 

Ladies and gentlemen,

In the past few months I have repeatedly said that 2016 would be a crucial year. If last year was about setting political objectives, adapting our policies, and crystallising one coherent over-arching strategy -- this year is about delivering on all of those. It is therefore the Energy Union's Year of Delivery; the year of new and follow-up initiatives like this regional cooperation which is evolving in shape and form.

This includes, of course other regional frameworks such as the Central Eastern and South-Eastern European Gas Connectivity (CESEC) which brings together 15 EU and Energy Community countries in joining forces to speed up the creation of missing gas infrastructure and creating conducive regulatory environment. CESEC will increase the competitiveness of the energy markets by allowing countries to diversify their sources and trade more among themselves. As you know, CESEC held its first summit in February 2015 and in July last year the participating countries already put forward a rigorous implementation roadmap. This year we will meet again in Budapest to take stock and agree on any remaining issues to solve.

East Med is another pipeline which the Commission has identified as a Project of Common Interest, given its potential to further diversify our sources. I have recently discussed its advancement with both Prime Minister Tsipras and Minister Lakkotrypis of Cyprus, both of whom are enthusiastic about the project.

Let me also say a word about Ukraine which I visited just two weeks ago. When meeting with Minister Demchyshyn who is with us today and with Prime Minister Yatsenyuk and President Poroshenko, I reiterated the fact that we in the EU see Ukraine as an important transit country of Russian gas into the EU. This is enshrined in the Energy Union Strategy. I also called on the Ukrainian government to complete the reforms which are still pending and I am hopeful we will see major progress on this front during the first half of this year.

Finally, a very important area where I expect we make significant progress this year is the Southern Gas Corridor. This pipeline chain of 3,500 km whose value USD 45 Billion is one of the biggest construction projects of our times. With this, Europe will start receiving Caspian gas in 2020.

Of course, these infrastructure projects are part of our broader vision of an energy transition, of decarbonisation, of using innovation and new technologies in order to reduce our environmental footprint. In this year's World Economic Forum in Davos they called it the Fourth Industrial Revolution. I am convinced that we can lead this revolution. And when I say 'we', I mean the EU together with our close partners in our neighbourhood and in Central Asia.

Let me conclude by saying that I want the new regional programme which is taking over many strands of activities from INOGATE, to open a new era of energy cooperation. It should be based on a real partnership and leading to better interconnections, to secure, reliable and affordable energy services and eventually to an energy transition towards low-carbon economies.

With the IEA, Energy Community and Energy Charter on board, we are in good hands. We have three implementing partners of very high expertise, good reputation and acceptance in all countries. The Commission has had very constructive cooperation and good experience with all three. I am therefore convinced that this will lead to tangible results with direct impact on the energy systems, the regional cooperation and to the benefit of the citizens of all 3 regions concerned.

I wish you all a productive afternoon programme of today's conference and I wish us all very productive four years of cooperation ahead!

Thank you very much.

SPEECH/16/881


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