1. 1 TREATY ESTABLISHING THE ENERGY COMMUNITY - A WAY FORWARD Slavtcho Neykov ENERGY COMMUNITY SECRETARIAT Vienna/AUSTRIA

2. 2 WHY A NEW TREATY? ENERGY - QUICK CHANGES IN THE RECENT YEARS – world wide, in the European Union, in South and Eastern Europe THE ENERGY POLICY IN EUROPE - generally - approach towards common principles (security of supply, competition, environment); BUT big EU vs. SEE differences; - currently in SEE – mostly bilateral relations; - the basis aimed – the relations with the EU as a backbone; - a necessity for a common framework.

3. 3 WHY THE TREATY IS A NEW ONE - 1 Signed recently; entry into force – 01.07. 2006. The Treaty is new as it is based on a new approach. It does not establish principles; it establishes a concrete framework, which is part of the Acquis Communautaire; minimum soft law obligations The framework is familiar - to the investors; - to the donors; - to the EU member states; - to the Parties to the Treaty i.e. It is a framework much easier to implement.

4. 4 WHY THE TREATY IS A NEW ONE - 2 Clear and easy to explain objectives; Envisages contemporary mechanisms and the relevant institutions for the achievement of the objectives, which unite: - the political will (The Ministerial Council); - the experts’ experience (the Permanent High Level Group); - the focus of the market reforms (the Regulatory Board); - transparency and direct involvement of the business (The Fora) – investments needed; - the EU experience and - the support of the Donors’ Community.

5. 5 THE MAIN OBJECTIVES Create a single and stable regulatory space and stable market framework Enhance the security of supply of the single regulatory space Develop network energy market competition on a broader geographic scale Via application of the EU Acquis Communautaire on energy: -Electricity Directive -Natural Gas Directive -Acguis on Environment -Acquis on Renewables -Acquis on Competition

6. 6 ACQUIS COMMUNAUTAIRE - ENERGY  The European Community Electricity Directive 2003/54/EC  The European Community Natural Gas Directive 2003/55/EC  The European Community Regulation on conditions for access to the network for cross-border exchanges in electricity 1228/2003/EC. (FOR ALL – IMPLEMENTATION ONE YEAR AFTER THE TREATY ENTERS INTO FORCE) The eligible customers - Each Contracting Party must ensure: From 1 January 2008, all non-household customers From 1 January 2015, all customers.

7. 7 ACQUIS COMMUNAUTAIRE - ENVIRONMENT Each Contracting Party shall;  endeavour to accede to Kyoto Protocol  implement Council Directive 85/337/EEC (including amendments) on the assessment of the effects of certain public and private projects on the environment, on the entry into force of Treaty  implement Council Directive 1999/32/EC (including amendments) on reduction in the sulphur content of certain liquid fuels by 31 December 2011  implement Directive 2001/80/EC on the limitation of emissions of certain pollutants into the air from large combustion plants by 31 December 2017  implement Article 4(2) of Directive 79/409/EEC on the conservation of wild birds on the entry into force of this treaty

8. 8 ACQUIS COMMUNAUTAIRE - RENEWABLES Each Contracting Party shall provide to the European Commission within one year of the date of entry into force of Treaty to:  implement Directive 2001/77/EC on the promotion of electricity produced from renewable energy sources in the internal electricity market  implement Directive 2003/30/EC on the promotion of the use of bio fuels or other renewable fuels for transport

9. 9 ACQUIS COMMUNAUTAIRE - COMPETITION  the Treaty establishing the European Community is the leading document; The following shall be incompatible with the proper functioning of the Treaty:  all agreements between undertakings, decisions by associations of undertakings and concerted practices which have as their object or effect the prevention, restriction or distortion of competition  abuse by one or more undertakings of a dominant position in the market  any public aid which distorts or threatens to distort competition by favouring certain undertakings or certain energy resources

10. 10 The European Community PARTIES The Republic of Albania, The Republic of Bulgaria, Bosnia and Herzegovina, The Republic of Croatia, The Former Yugoslav Republic of Macedonia, The Republic of Montenegro, Romania, The Republic of Serbia The United Nations Interim Administration Mission in Kosovo

11. 11 PARTICIPANTS AND OBSERVERS  Upon a request to the Ministerial Council, any Member State of the European Community may be represented in the Ministerial Council, the Permanent High Level Group and the Regulatory Board as a Participant  Upon a reasoned request of a neighbouring third country, the Ministerial Council may, by unanimity, accept that country as an Observer.  Observers may attend the meetings of the Ministerial Council, the Permanent High Level Group, the Regulatory Board and the Fora, without participating in the discussions (unlike participants)

12. 12 DURATION  This Treaty is concluded for a period of 10 years from the date of entry into force  The Ministerial Council, acting by unanimity, may decide to extend its duration

13. 13 WHAT IS TO COME The Roadmaps - 2006 The Implementation Process – 2007 onwards The Projects – ongoing THE SOCIAL FACTOR – PARTICULAR ATTENTION OF THE ENERGY COMMUNITY

14. 14 AND TO CONCLUDE No doubt about the success of the initiative – the Treaty is an appropriate expression of: - political will; - economic reasoning; - clear, familiar and effective legal framework.

15. 15 AND MORE, AND MORE …… WWW.ENERGY-COMMUNITY.ORG THANK YOU FOR YOUR ATTENTION!