CJEU, 4th chamber, September 17, 2020, No C-648/18

THE COURT (Fourth Chamber),

1 This request for a preliminary ruling concerns the interpretation of Article 35 TFEU.

2 The request has been made in proceedings between Autoritatea naţională de reglementare în domeniul energiei (ANRE) (National Energy Sector Regulatory Authority, Romania) and Societatea de Producere a Energiei Electrice în Hidrocentrale Hidroelectrica SA (‘Hidroelectrica’) concerning report No 36119 of 11 May 2015 drawn up by ANRE against Hidroelectrica on the ground that the latter had failed to offer for sale all the electricity available to it on the centralised competitive market in Romania and had exported part of that electricity directly to the electricity market in Hungary.

Legal context

European Union law

Directive 2009/72/EC

3 Recitals 3, 5, 25 and 51 of Directive 2009/72/EC of the European Parliament and of the Council of 13 July 2009 concerning common rules for the internal market in electricity and repealing Directive 2003/54/EC (OJ 2009 L 211, p. 55) state:

‘(3) The freedoms which the [TFEU] guarantees the citizens of the Union – inter alia, the free movement of goods, the freedom of establishment and the freedom to provide services – are achievable only in a fully open market, which enables all consumers freely to choose their suppliers and all suppliers freely to deliver to their customers.

…

(5) A secure supply of electricity is of vital importance for the development of European society, the implementation of a sustainable climate change policy, and the fostering of competitiveness within the internal market. …

…

(25) The security of energy supply is an essential element of public security and is therefore inherently connected to the efficient functioning of the internal market in electricity and the integration of the isolated electricity markets of Member States. …

…

(51) Consumer interests should be at the heart of this directive and quality of service should be a central responsibility of electricity undertakings. Existing rights of consumers need to be strengthened and guaranteed, and should include greater transparency. Consumer protection should ensure that all consumers in the wider remit of the [European Union] benefit from a competitive market. Consumer rights should be enforced by Member States or, where a Member State has so provided, the regulatory authorities.’

4 Article 3 of the directive, entitled ‘Public service obligations and customer protection’, states, in paragraph 1 thereof:

‘Member States shall ensure, on the basis of their institutional organisation and with due regard to the principle of subsidiarity, that, without prejudice to paragraph 2, electricity undertakings are operated in accordance with the principles of this directive with a view to achieving a competitive, secure and environmentally sustainable market in electricity, and shall not discriminate between those undertakings as regards either rights or obligations.’

5 Articles 36 to 38 of the directive, concerning the general objectives and the duties and powers of the national regulatory authorities and the regime applicable to cross-border issues respectively, provide for several tools for cooperation between those authorities.

Regulation (EU) No 1227/2011

6 Article 1(1) of Regulation (EU) No 1227/2011 of the European Parliament and of the Council of 25 October 2011 on wholesale energy market integrity and transparency (OJ 2011 L 326, p. 1) provides:

‘This regulation establishes rules prohibiting abusive practices affecting wholesale energy markets which are coherent with the rules applicable in financial markets and with the proper functioning of those wholesale energy markets whilst taking into account their specific characteristics. It provides for the monitoring of wholesale energy markets by the Agency for the Cooperation of Energy Regulators … in close collaboration with national regulatory authorities and taking into account the interactions between the Emissions Trading Scheme and wholesale energy markets.’

7 Articles 7 to 9 of Regulation No 1227/2011, concerning the monitoring of the wholesale energy market, data collection and the registration of participants in that market respectively, establish the competence of the Agency for the Cooperation of Energy Regulators, in collaboration with the national regulatory authorities, require the actors in that market to provide certain information to that agency and create a European register of participants in that market, accessible to the national regulatory authorities, on which the most important information relating to the trades carried out in that market is kept.

Regulation (EU) 2015/1222

8 Article 5(1) of Commission Regulation (EU) 2015/1222 of 24 July 2015 establishing a guideline on capacity allocation and congestion management (OJ 2015 L 197, p. 24) provides:

‘If a national legal monopoly for day-ahead and intraday trading services which excludes the designation of more than one NEMO [nominated electricity market operator] already exists in a Member State or Member State’s bidding zone at the time of the entry into force of this regulation, the Member State concerned must notify the [European] Commission within two months after entry into force of this regulation and may refuse the designation of more than one NEMO per bidding zone.’

Romanian law

9 Legea nr. 123 energiei electrice și a gazelor naturale (Law No 123 on electricity and natural gas) of 10 July 2012 (Monitorul Oficial al României, Part I, No 485, of 16 July 2012) in the version applicable to the dispute in the main proceedings (‘the Law on electricity and natural gas’), provided:

‘Article 2

Activities in the sector of electricity and heat produced in cogeneration shall be carried out in order to achieve the following basic objectives:

…

(c) to create and ensure the operation of competitive electricity markets;

…

(h) to improve the competitiveness of the internal electricity market and active participation in the formation of both the regional market and the internal energy market of the European Union and participation in the development of cross-border exchanges;

…

Article 3

For the purposes of this Title, the terms and expressions set out below shall have the following meanings:

…

38. electricity market operator: the legal person that organises and administers the centralised market, with the exception of the balancing market, for the purposes of the short-, medium- and long-term wholesale trading of electricity.

…

49. centralised electricity market: the framework within which trading in electricity is carried out between various economic operators, with the involvement of the electricity market operator or the manager of the transmission system, on the basis of specific rules, approved by the competent authority;

…

Article 10

…

2. The competent authority shall issue licences for:

…

(f) the operation of the centralised markets; a single licence shall be issued to the electricity market operator …

…

Article 20

1. The electricity market is composed of the regulated market and the competitive market, and energy transactions shall be either wholesale or retail.

…

Article 23

1. Trading in electricity shall be conducted on the competitive market in a transparent, public, centralised and non-discriminatory manner. …

…

Article 28

Producers shall, principally, have the following obligations:

…

(c) to trade all the available electricity on the regulated and competitive market in a transparent and non-discriminatory manner;

…’

The dispute in the main proceedings and the question referred for a preliminary ruling

10 Hidroelectrica is a Romanian private-law company of which the State is the majority shareholder, the activity of which includes the production, transport and distribution of electricity. It holds both an electricity production licence and an electricity supply licence in Romania and a trading licence issued by the Magyar Energetikai és Közmű-szabályozási Hivatal (MEKH) (National Energy Sector and Public Utilities Regulatory Authority, Hungary).

11 On 11 May 2015, ANRE notified Hidroelectrica by way of a report No 36119 (‘the report’) of its decision to impose a fine on it for an administrative offence pursuant to the combined provisions of Article 23(1) and Article 28(c) of the Law on electricity and natural gas. ANRE found that, between December 2014 and February 2015, Hidroelectrica had directly concluded electricity sales contracts on a Hungarian electronic trading platform operated by Tradition Financial Services Ltd, an operator registered in the United Kingdom, whereas it was required to offer for sale all the electricity available to it in a transparent, public, centralised and non-discriminatory manner on the centralised electricity market in Romania, that is, on the platforms of OPCOM SA, sole operator of the electricity market in Romania.

12 On 27 May 2015, Hidroelectrica brought an action before the Judecătoria Sectorului 1 București (Court of First Instance, Sector 1, Bucharest, Romania) against the report and sought the annulment of the fine imposed by ANRE. Hidroelectrica submitted, first, that the requirement to conduct transactions exclusively through certain operators supervised or authorised by the State amounted to a restriction of distribution channels, which is incompatible with Article 35 TFEU and, second, that that requirement, as a measure restricting the free movement of electricity, was not justified in the light of Article 36 TFEU. Furthermore, Hidroelectrica noted that, in a report of January 2014 on the results of the sectoral inquiry into the electricity market, the Consiliul Concurenței (competition authority, Romania) stated that the Law on electricity and natural gas must be interpreted as meaning that electricity producers are free to make export sales directly (or through companies within their group).

13 The Judecătoria Sectorului 1 București (Court of First Instance, Sector 1, Bucharest) annulled the report and discharged Hidroelectrica from payment of the fine that had been imposed on it by ANRE. It held that trading outside Opcom’s centralised platforms does not necessarily constitute an infringement of Article 23(1) of the Law on electricity and natural gas.

14 ANRE lodged an appeal against that judgment before the referring court, the Tribunalul București (Regional Court, Bucharest, Romania).

15 That court states, first of all, that, according to the communiqué entitled ‘ANRE’s interpretation of the provisions of [the Law on electricity and natural gas] in relation to whether producers may export electricity’, published on 13 February 2015 on ANRE’s website, ‘all available electricity must be offered for sale in a transparent manner, publicly, without discrimination and centrally on Opcom’s platforms’. That court points out in that regard that classifying the direct export of electricity as an administrative offence has the effect of preventing such activity from being carried out, given the severe penalties that ANRE can impose.

16 The referring court next notes that, in an analogous case, the Judecătoria Sectorului 2 București (Court of First Instance, Sector 2, Bucharest, Romania) held that, although Article 23(1) of the Law on electricity and natural gas provides that electricity transactions must be transparent, public, centralised and non-discriminatory, that provision does not require that they be carried out only on Opcom’s centralised platforms. That court inferred therefrom that trading outside Opcom’s centralised platforms does not necessarily constitute an infringement of that provision and that, as a result, in order to substantiate the allegation that the act of the electricity producer concerned constitutes an administrative offence, ANRE should have established that the transaction concerned was concluded outside the competitive market in a manner that was not transparent, public, centralised and non-discriminatory.

17 Finally, the referring court points out that the Court has not yet given a ruling on the interpretation of Article 35 TFEU with regard to a law, regulation or administrative practice establishing a restriction on exports such as that at issue in the main proceedings.

18 In those circumstances, the Tribunalul București (Regional Court, Bucharest) decided to stay the proceedings and to refer the following question to the Court of Justice for a preliminary ruling:

‘Does Article 35 TFEU preclude an interpretation of Article 23(1) and Article 28(c) of the [Law on electricity and natural gas] according to which electricity producers in Romania are obliged to trade all the electricity they produce exclusively on a centralised competitive market in Romania, given that there is the possibility of exporting energy, albeit not directly but through trading companies?’

Consideration of the question referred

Admissibility

19 ANRE argues that the request for a preliminary ruling is inadmissible, submitting that that request does not relate to the interpretation of a provision of EU law, but rather to the interpretation of national legislation adopted by a national authority. It claims that the Court does not have jurisdiction to rule on differences in the interpretation or application of rules of national law.

20 In that regard, it should be borne in mind that, although it is not for the Court, in the context of Article 267 TFEU, to rule on the compatibility of national provisions with EU law or the interpretation of national legislative or regulatory provisions by the national courts, the Court nonetheless has jurisdiction to give the national court full guidance on the interpretation of EU law in order to enable that court to determine the issue of the compatibility, with the rule of EU law relied on, of a national provision, or its interpretation (see judgments of 10 March 1983, Syndicat national des fabricants raffineurs d’huile de graissage and Others, 172/82, EU:C:1983:69, paragraph 8, and of 2 July 1987, Lefèvre, 188/86, EU:C:1987:327, paragraph 6).

21 As it is, as observed by the Advocate General in point 29 of his Opinion, the referring court is not asking the Court to rule on the interpretation of the Law on electricity and natural gas, but raises doubts as to whether the interpretation of that law by a national authority is compatible with Article 35 TFEU.

22 It follows that the argument concerning the inadmissibility of the reference for a preliminary ruling raised by ANRE must be rejected.

Substance

23 By the question referred, the referring court asks, in essence, whether Articles 35 and 36 TFEU must be interpreted as meaning that national legislation, which, as interpreted by the authority responsible for applying it, requires national electricity producers to offer for sale all the electricity available to them on the platforms managed by the only operator designated for national electricity market trading services, constitutes a measure having equivalent effect to a quantitative restriction on exports that cannot be justified in the light of Article 36 TFEU or by an overriding requirement relating to the public interest.

The applicability of Article 35 TFEU

24 ANRE and the Romanian Government submit that Article 35 TFEU does not apply in the present case, given that there is legislative harmonisation, at EU level, in the sector concerned. They claim, first, that Article 5 of Regulation 2015/1222 allows the Member States to designate a single operator for national electricity market trading services and, second, that if a legal monopoly for day-ahead and intraday trading services already existed in a Member State, that State was required to notify the Commission of this within two months after the entry into force of that regulation. Pursuant to that provision, the Romanian Minister for Energy, SMEs and the Business Environment informed the Commission that, under the Law on electricity and natural gas, Opcom is the single designated electricity market operator for trading services in Romania. It is therefore in the light of Regulation 2015/1222 that that law must be assessed.

25 It is settled case-law that any national measure relating to an area which has been the subject of exhaustive harmonisation at EU level must be assessed in the light of the provisions of that harmonising measure and not in the light of the provisions of primary law (judgment of 18 September 2019, VIPA, C‑222/18, EU:C:2019:751, paragraph 52 and the case-law cited).

26 In that regard, it is sufficient to note that the events in the main proceedings are not within the temporal scope of Regulation 2015/1222. Those events took place between December 2014 and February 2015, whereas that regulation entered into force, in accordance with Article 84 thereof, only on 14 August 2015, the 20th day following that of its publication in the Official Journal of the European Union on 25 July 2015.

27 Furthermore, as noted by the Advocate General in point 35 of his Opinion, Directive 2009/72, as a set of rules governing the internal market in electricity, does not fully harmonise that market and does not set out specific rules for electricity trading. As is apparent from Article 3 of that directive, the directive establishes merely a number of general principles that Member States must follow with a view to achieving a competitive, secure and environmentally sustainable market in electricity.

28 It follows that Article 35 TFEU is applicable in the present case, as the Court has held that electricity comes within the scope of the TFEU rules on the free movement of goods (see, to that effect, judgments of 27 April 1994, Almelo, C‑393/92, EU:C:1994:171, paragraph 28, and of 11 September 2014, Essent Belgium, C‑204/12 to C‑208/12, EU:C:2014:2192, paragraph 122).

Whether there is a measure with equivalent effect within the meaning of Article 35 TFEU

29 In order to answer the question of whether national legislation, as interpreted by the authority responsible for applying that law, amounts to a measure having equivalent effect to a quantitative restriction within the meaning of Article 35 TFEU, it must be borne in mind that, first, the Court has held that national measures applicable to all traders active in the national territory which have a greater effect on goods leaving the market of the exporting Member State than on the marketing of goods in the domestic market of that Member State are measures having equivalent effect to a quantitative restriction (judgment of 28 February 2018, ZPT, C‑518/16, EU:C:2018:126, paragraph 43 and the case-law cited). Second, the Court has held that any restriction, even of minor significance, of one of the fundamental freedoms provided for in the FEU Treaty is prohibited by that treaty, unless its effects are considered to be too indirect or too uncertain for such a restriction to be regarded as a restriction within the meaning of Article 35 TFEU (see, to that effect, judgments of 28 February 2018, ZPT, C‑518/16, EU:C:2018:126, paragraph 44, and of 21 June 2016, New Valmar, C‑15/15, EU:C:2016:464, paragraphs 37 and 45 and the case-law cited).

30 ANRE and the Romanian Government submit that the requirement imposed by Article 23(1) and Article 28(c) of the Law on electricity and natural gas on producers to offer for sale all the electricity available to them on the centralised national market does not apply to exports alone. In order to establish that the legislation at issue in the main proceedings does not have restrictive effects on electricity exports, they refer to statistical data showing a rise in those exports.

31 It is, however, apparent from the order for reference that the effect of the provisions at issue in the main proceedings, as interpreted by ANRE, deprive Romanian electricity producers who have obtained trading licences in other Member States, the electricity markets of which function together with that of Romania, of the opportunity to trade in electricity bilaterally and, as the case may be, to export electricity directly to those markets. However, by preventing bilateral trading between electricity producers and their potential clients, those provisions impliedly prohibit direct exports and mean that electricity produced in the Member State in question is intended more for internal consumption, as the Romanian Government itself acknowledged.

32 The statistical data relied on by ANRE and the Romanian Government showing a rise in exports from the electricity market in Romania are not such as to invalidate those considerations, in so far as it cannot be excluded that the level of exports would be even higher but for the provisions at issue in the main proceedings. Those data allow only the conclusion that the legislation at issue in the main proceedings does not have the effect of preventing all exports from the electricity market in Romania, which is not disputed in the main proceedings.

33 Accordingly, the legislation at issue in the main proceedings has a greater effect on electricity exports in that it prohibits direct exports from electricity producers from Romania by prioritising the supply of electricity on the national market. Such legislation therefore constitutes a measure having equivalent effect to a quantitative restriction within the meaning of Article 35 TFEU.

Whether the measure having equivalent effect to a quantitative restriction within the meaning of Article 35 TFEU is justified

34 A national measure contrary to Article 35 TFEU may be justified on one of the grounds stated in Article 36 TFEU, and by overriding requirements relating to the public interest, provided that the measure is proportionate to the legitimate objective pursued (see judgment of 16 December 2008, Gysbrechts and Santurel Inter, C‑205/07, EU:C:2008:730, paragraph 45). It is for the national authorities to invoke the reasons justifying such measures as prohibitions constituting a derogation from the principle of the free movement of goods.

35 In the present case, the Romanian Government first submitted, in general terms, in its written submissions, that Article 23(1) and Article 28(c) of the Law on electricity and natural gas were introduced in order to ensure the transparency of the conclusion of contracts on a functioning market, while encouraging fair competition and ease of access for the various providers, with the purpose of ensuring a secure energy supply to consumers. Next, at the hearing, in response to a question from the Court, that government specified that that law pursues the objective of protecting a secure energy supply.

36 The Court has held that the protection of a secure energy supply can constitute a ground of public security within the meaning of Article 36 TFEU (see, to that effect, judgment of 10 July 1984, Campus Oil and Others, 72/83, EU:C:1984:256, paragraph 34).

37 It is in the light of those factors that an assessment must be made of whether national legislation, interpreted as meaning that national electricity producers are required to offer for sale all the electricity available to them on the platforms managed by the only operator designated for national electricity market trading services, is proportionate to the legitimate objective pursued. To that end, it is necessary to ascertain not only whether the means which they implement are appropriate to ensure attainment of the objective pursued, but also that those means do not go beyond what is necessary to attain that objective (judgment of 16 December 2008, Gysbrechts and Santurel Inter, C‑205/07, EU:C:2008:730, paragraph 51).

38 As regards the ability of that legislation to attain the objective of a secure electricity supply, it must be noted that the requirement imposed on national electricity producers to offer for sale all the electricity available to them on trading platforms managed by the only operator designated for national electricity market trading services, by prohibiting bilateral trading between those producers and their clients, does not appear to be, as such, inappropriate for securing the attainment of the objective of a secure electricity supply, in that it is intended to ensure that the electricity available is directed more towards internal consumption.

39 That being said, it must be borne in mind that a restrictive measure can be considered to be an appropriate means of securing the attainment of the objective pursued only if it genuinely reflects a concern to secure the attainment of that objective in a consistent and systematic manner (judgment of 23 December 2015, Scotch Whisky Association and Others, C‑333/14, EU:C:2015:845, paragraph 37).

40 As observed by the Advocate General in point 78 of his Opinion, the fact that traders can buy electricity on the wholesale market and subsequently export it to other Member States without restrictions similar to those imposed on producers shows that the measure in question is inconsistent with the objective pursued. If, according to the Romanian Government, direct electricity exports compromise a secure electricity supply, there is a similar risk that exports will be concluded by producers or traders.

41 As regards whether the legislation at issue in the main proceedings does not go beyond what is necessary to attain the objective it pursues, the Romanian Government submits that bilateral trading distorts the electricity market, especially when a producer holds a significant market share, as is allegedly the case with Hidroelectrica. According to that government, direct electricity exports have an adverse effect on the availability of electricity on the national market and on the evolution of the price of electricity. The requirement to offer for sale all the electricity available on trading platforms managed by the sole designated operator of that market is, as a result, proportionate, in the light of the risk that non-transparent and discriminatory trading in electricity would create.

42 However, as observed by the Advocate General in points 73 and 74 of his Opinion, the requirement to offer for sale all the electricity available on trading platforms managed by the only operator designated for national electricity market trading services, as a measure intended to prevent the negative effect of direct exports on the evolution of the price of electricity on the national market, goes beyond what is necessary to ensure a secure supply of electricity.

43 Securing the supply of electricity does not mean securing the supply of electricity at the best price. The purely economic and commercial considerations underlying the national legislation at issue in the main proceedings are not grounds of public security within the meaning of Article 36 TFEU, or requirements relating to the public interest which make it possible to justify quantitative restrictions on exports or measures having equivalent effect. If such considerations were able to justify a prohibition on direct export of electricity, the very principle of the internal market would be undermined.

44 As regards the risk which, according to the Romanian Government, non-transparent and discriminatory trading in electricity for the supply to the national market would entail, it must be noted that there are, in the present case, less restrictive measures on the freedom of movement of electricity on the internal market than the national legislation at issue in the main proceedings.

45 As observed by the Advocate General in points 64 to 70 of his Opinion, such measures are set out in, inter alia, Articles 7 to 9 of Regulation No 1227/2011 and Articles 36 to 38 of Directive 2009/72. Those provisions establish mechanisms for cooperation between national regulatory authorities concerning the monitoring of wholesale energy markets and provide for rules intended to strengthen the transparency and integrity of that market.

46 It follows from the foregoing that the requirement imposed on producers to offer for sale all the electricity available to them on platforms managed by the only operator designated for national electricity market trading services goes beyond what is necessary to attain the objective pursued.

47 Having regard to all the foregoing considerations, the answer to the question referred is that Articles 35 and 36 TFEU must be interpreted as meaning that national legislation, as interpreted by the authority responsible for applying it, which requires national electricity producers to offer for sale all the electricity available to them on the platforms managed by the only operator designated for national electricity market trading services, constitutes a measure having equivalent effect to a quantitative restriction on exports that cannot be justified on grounds of public security connected to the security of energy supply, in so far as such legislation is not proportionate to the objective pursued.

Costs

48 Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable.

On those grounds, the Court (Fourth Chamber) hereby rules:

Articles 35 and 36 TFEU must be interpreted as meaning that national legislation, as interpreted by the authority responsible for applying it, which requires national electricity producers to offer for sale all the electricity available to them on the platforms managed by the only operator designated for national electricity market trading services, constitutes a measure having equivalent effect to a quantitative restriction on exports that cannot be justified on grounds of public security connected to the security of energy supply, in so far as such legislation is not proportionate to the objective pursued.

[Signatures]

* Language of the case: Romanian.