On 10 October 2008, the European Energy Council, which is composed of national energy ministers, reached agreement over the European Commission’s “third energy package”, a set of legislative measures designed to fully liberalise the European energy markets. The Energy Council reached an outline agreement in June of this year and has now reached a compromise in the three key areas that stalled the proposals.

One of these key areas concerned the Commission’s plan to force integrated energy firms to sell off their transmission assets. Under the compromise, former State monopolies can retain ownership of electricity and gas grids subject to outside supervision. In exchange for this concession, energy companies will not be able to buy transmission networks in European countries where the transmission networks have already been “unbundled” from incumbent operators.

Ministers also reached agreement on what has been termed the “Gazprom clause”. This sought to prevent non-European energy companies from buying transmission assets in Europe, unless the home country of the company granted European energy companies equivalent legal certainty and access rights to its markets. Under the compromise, only bilateral agreement is required for foreign investment, rather than Europe-wide consensus. The voting system for the new European Agency for the Cooperation of Energy Regulators was also finalised.

The compromise is now subject to the approval of the European Parliament, with the Commission aiming to adopt the measures in the first half of 2009.