Judgment of the Court Fourth Chamber of 2 September 2021, Commission v Germany Transposition des directives 2009/72 et 2009/73, C-718/18

• Date: 02 September 2021
• Year: 2021

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X.ENERGY

Judgment of the Court (Fourth Chamber) of 2 September 2021, Commission v Germany

(Transposition des directives 2009/72 et 2009/73), C-718/18

Link to the complete text of the judgment

Failure of a Member State to fulfil obligations – Internal markets for electricity and natural gas –Directive

2009/72/EC–Article 2(21) –Article 19(3), (5) and (8) – Article 37(1)(a) and (6)(a) and (b)–Directive

2009/73/EC – Article 2(20) – Article 19(3), (5) and (8) – Article 41(1)(a) and (6)(a) and (b) – Concept of a

‘vertically integrated undertaking’– Effective unbundling of networks from the activities of production and

supply of electricity and natural gas –Independent transmission operator – Independence of the staff and

the management of the transmission system operator – Transitional periods – Shares held in the capital

of the vertically integrated undertaking – National regulatory authorities –Independence – Exclusive

powers – Article 45 TFEU – Freedom of movement for workers –Charter of Fundamental Rights of the

European Union– Article 15– Right to engage in work and to pursue an occupation – Article 17– Right to

property – Article 52(1) – Restrictions – Principle of democracy

The purpose of Directives 2009/72

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and 2009/73

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is to provide all EU consumers with a real choice

in domestic electricity and natural gas markets. In order to avoid discrimination, the directives provide

for the effective separation of transmission networks from activities of generation and supply

(‘effective unbundling’). Compliance with the provisions of the directives is ensured through the

creation of independent, impartial and transparent national regulatory authorities (‘NRAs’).

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By its judgment, the Court of Justice upholds, in its entirety, the action for failure to fulfil obligations

brought by the European Commission against the Federal Republic of Germany. The four complaints

put forward by the Commission in support of its action all relate to the incorrect transposition by the

Federal Republic of Germany of several provisions of Directives 2009/72 and 2009/73 into the Energy

Industry Act.

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Findings of the Court

The Court upholds the first complaint, by which the Commission claims that the Federal Republic of

Germany failed to transpose correctly into national law the concept of a ‘vertically integrated

undertaking’ (‘VIU’), by restricting its definition to activities carried on within the European Union.

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The Court points out that the concept of a ‘VIU’ is an autonomous concept of EU law which does not

impose any territorial restriction and must be interpreted in the light of the concept of ‘effective

unbundling’ in order to avoid a risk of discrimination as regards network access. There may be

conflicts of interest between a transmission system operator located in the European Union and

electricity or natural gas producers or suppliers carrying on activities in those fields outside the

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Directive 2009/72/EC of the European Parliamen t 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). That dire ctive was repealed with effect from 1 Januar y 2021 by Directive

(EU) 2019/944 of the European Parliament and of the Council of 5 June 2019 on common rules for the i nternal market for electricity and

amending Directive 2012/27/EU (OJ 2019 L 158, p. 125). However, it r emains applicable to the case at issue ratione temporis.

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Directive 2009/73/EC of the European Parliamen t and of the Council of 13 July 2009 concerning common rules for the internal market in

natural gas and repealing Directive 2003/55/EC (OJ 2009 L 211, p. 94).

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Article 35(4) of Directive 2009/72 and Article 39(4) of Directive 2009/73.

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Energiewirtschaftsgesetz (Energy Industry Act) of 7 July 2005 (BGBl. I, pp. 1970 and 3621), as amended by Paragraph 2(6) of the Law of 20 July

2017 (BGBl. I, p. 2808, 2018 I p. 472).

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Infringement of Article 2(21) of Directive 2009/72 and of Article 2(20) of Dir ective 2009/73.