Abstract
The Eurasian Economic Union was established on May 29, 2014. The members of the union are the Russian Federation, Kazakhstan, Belarus, Armenia and the Kyrgyz Republic. Energy dialogue forms an important part of this union. Currently, the parties aim to conclude the formation of the common energy market by 2025, however there are a number of hurdles blocking the successful achievement of this goal. This article argues that formation of common energy market is hindered through the lack of trust between the members, monopolization of the energy sectors, non-coordination of national energy policies, lack of fair competition in the energy market and dependence on single source of energy, mainly fossil fuel in overall energy mix.
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Notes
- 1.
98% of energy in Belarus originate from Russia. Armenia can only meet 35% of its energy demand. Kyrgyz Republic’s dependence on energy import is 50%.
- 2.
WTO Council for Trade Special Session, USA proposal on energy services S/CSS/W/24, 18 December 2000.
- 3.
Cottier et al. (2011), p. 211.
- 4.
VanGrasstek (2013), p. 137.
- 5.
Leal-Arcas et al. (2016), p. 5.
- 6.
Energy issues are also tackled within international energy organizations which tire to unify and coordinate energy policies of their member states on different aspects, such as transit policies, stabilization of energy prices in world market, promotion of use of renewable energy, mitigation of effects of energy on climate change. Among these multilateral platforms we can name Energy Charter, Organization for Petroleum Exporting Countries, International Renewable Energy Agency, International Energy Agency, as well as forums of environmental organizations dealing with multilateral energy regulation.
- 7.
NAFTA, the North American Free Trade Agreement: a guide to customs procedures (1994), Washington, DC: Dept. of the Treasury, U.S. Customs Service: Supt. of Docs., U.S. G.P.O.
- 8.
Leal-Arcas et al. (2014), p. 33.
- 9.
Memorandum of Understanding on Electricity Exchange and Electrical Integration in MERCOSUR MERCOSUR/CMC/DEC No. 10, 23 July 1998.
- 10.
Memorandum of Understanding on Gas Exchanges and Gas Integration among Mercosur Member States MERCOSUR/CMC/DEC No. 10/99, 7 December 1999.
- 11.
MERCOSUR Framework Agreement on Regional Energy Complementation, 9 December 2005.
- 12.
MERCOSUR Action Plan for Cooperation in Biofuels MERCOSUR/CMC/DEC No. 49/07, 17 December 2007.
- 13.
ASEAN Plan of Action for Energy Cooperation 2016–2025 is the fourth action plan. The previous action plans covered the period 1999–2004, 2004–2009 and 2010–2015.
- 14.
Other relevant provisions are: Article 122 on security of supply, Articles 170–172 on energy networks, Articles 216–218 on external energy policy, as well as Article 114 on internal energy market. Treaty on the Functioning of the European Union OJ C 326, 26.10.2012, pp. 47–390.
- 15.
Serena (2014), pp. 14–15.
- 16.
Communication from the European Commission: a framework strategy for a resilient energy union with a forward-looking climate change policy, COM (2015) 080 final, 25 February 2015.
- 17.
Communication from the European Commission: clean energy for all Europeans, COM (2016) 860 final, 30 November 2016.
- 18.
Qlazyev et al. (2013), p. 10.
- 19.
Treaty on the Establishment of the Customs Union between Russia, Belarus and Kazakhstan (6 October 2007).
- 20.
Treaty on the Eurasian Economic Commission, 18 November 2011, https://docs.eaeunion.org/ru-ru (last accessed 30 October 2016).
- 21.
Treaty on the Establishment of the Eurasian Economic Union, 29 May 2014, https://docs.eaeunion.org/en-us (last accessed 30 October 2016).
- 22.
Armenia signed the EAEU treaty on October 10, 2014 and Kyrgyz Republic signed it on December 23, 2014.
- 23.
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Yesdauletova (2009), p. 38.
- 31.
See more at http://www.kmg.kz/eng/ (last accessed 29 October 2017).
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Aminjonov (2016), p. 6.
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Aminjonov (2016), p 7.
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- 36.
Balmaceda (2006), p. 6.
- 37.
Balmaceda (2006), p. 8.
- 38.
Currently Belarus pays 132 USD for thousand cubic meters of gas. The country demands lower prices for gas because the world prices have gone down, Russia refuses to do so. From 2016, Belarus started to pay 73 USD for thousand cubic meters of gas. As retaliation, Russia decreased the export of the oil to Belarus which resulted in the loss of export duty revenues to Belarus. The trade war between the countries on the gas prices is still ongoing.
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- 44.
Treaty on the Establishment of the Eurasian Economic Union: Article 81, 83 and 84, 29 May 2014), www.docs.eaeunion.org (last accessed 2 November 2017).
- 45.
Treaty on the Establishment of the Eurasian Economic Union: Article 104, 29 May 2014, www.docs.eaeunion.org (last accessed 2 November 2017).
- 46.
Annex 22 to the EAEU Treaty, Protocol on Rules for the access to the services of natural monopolies in the sphere of transportation of gas through gas transporting systems, as well as price formation and tariff policy, Article: 3.1, 29 May 2014, www.docs.eaeunion.org (last accessed 2 November 2016).
- 47.
Annex 22 to the EAEU Treaty, Protocol on Rules for the access to the services of natural monopolies in the sphere of transportation of gas through gas transporting systems, as well as price formation and tariff policy, Article: 3.4–3.5, 29 May 2014, www.docs.eaeunion.org (last accessed 2 November 2016).
- 48.
Annex 22 to the EAEU Treaty, Protocol on Rules for the access to the services of natural monopolies in the sphere of transportation of gas through gas transporting systems, as well as price formation and tariff policy, Article: 5, 29 May 2014, www.docs.eaeunion.org (last accessed 2 November 2016).
- 49.
Annex 22 to the EAEU Treaty, Protocol on Rules for the access to the services of natural monopolies in the sphere of transportation of gas through gas transporting systems, as well as price formation and tariff policy, Article: 7, 29 May 2014, www.docs.eaeunion.org (last accessed 2 November 2016).
- 50.
Decision N7, dated 31 May 2016 of the Eurasian Economic Council on the concept of the formation of common gas market of the EAEU.
- 51.
Decision N7, dated 31 May 2016 of the Eurasian Economic Council on the concept of the formation of common gas market of the EAEU, Article 3.
- 52.
Decision N7, dated 31 May 2016 of the Eurasian Economic Council on the concept of the formation of common gas market of the EAEU.
- 53.
Annex 23 to the EAEU Treaty, Protocol on Rules for organization, governance, functioning and development of common oil and petroleum products market, 29 May 2014, www.docs.eaeunion.org (last accessed 2 November 2016).
- 54.
Annex 23 to the EAEU Treaty, Protocol on Rules for organization, governance, functioning and development of common oil and petroleum products market, Article 7, 29 May 2014, www.docs.eaeunion.org (last accessed 2 November 2016).
- 55.
Decision N8, dated 31 May 2016 of the Supreme Eurasian Economic Council on the adoption of the Concept of common EAEU oil and petroleum products market.
- 56.
Decision N8, dated 31 May 2016 of the Supreme Eurasian Economic Council on the adoption of the Concept of common EAEU oil and petroleum products market, Article 4.
- 57.
Decision N8, dated 31 May 2016 of the Supreme Eurasian Economic Council on the adoption of the Concept of common EAEU oil and petroleum products market, Article 4.
- 58.
Decision N8, dated 31 May 2016 of the Supreme Eurasian Economic Council on the adoption of the Concept of common EAEU oil and petroleum products market, Article 9.
- 59.
Decision N8, dated 31 May 2016 of the Supreme Eurasian Economic Council on the adoption of the Concept of common EAEU oil and petroleum products market, Article 10.
- 60.
Decision N12, dated 8 May 2015 of the Supreme Eurasian Economic Council on the adoption of the Concept of common EAEU electricity market.
- 61.
Decision N12, dated 8 May 2015 of the Supreme Eurasian Economic Council on the adoption of the Concept of common EAEU electricity market, Article 2.
- 62.
Decision N12, dated 8 May 2015 of the Supreme Eurasian Economic Council on the adoption of the Concept of common EAEU electricity market, Article 9.
- 63.
Newnham (2011), p. 134.
- 64.
Yukos ruling of Permanent Arbitration Court demanding 50 billion USD is the largest amount of arbitration award in the world history, which was later rejected by local court in the Hague. See: Newcombe (2015), p. 283.
- 65.
Smith K (2010), Lack of transparency in Russian Energy Trade: The Risks to Europe. Center for International and Strategic Studies Publication, https://csis-prod.s3.amazonaws.com/s3fs-public/legacy_files/files/publication/100702_Smith_LackOfTransparency_Web.pdf (last accessed 11 January 2018), p. 2.
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Gusev (2013) How to profit from rising energy prices in Russia. Energy post, http://energypost.eu/how-to-profit-from-rising-energy-prices-in-russia/ (last accessed 27 March 2018).
- 67.
Paris convention, adopted within the United Nations Framework Convention for Climate Change, aims to put the rise of global temperature below 2 C above pre-industrial levels and avoid further increase. The agreement is implemented through nationally determined contributions by each party.
- 68.
All the commitments of the EAEU members in achieving aims of Paris Convention can be accessed at Paris Convention INDC submissions portal: http://www4.unfccc.int/submissions/indc/Submission%20Pages/submissions.aspx (last accessed 27 March 2018).
- 69.
The reference point is the period from the start of functioning of the EAEU Court up until 1 August 2017.
- 70.
Russian Federation - Republic of Belarus Case N CE-1-1/1-16-BK (Russian Federation).
- 71.
Statute of the Court of Eurasian Economic Union, Annex 2 to the EAEU Treaty, Article 101.
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Verdiyeva, S. (2018). Trade in Energy: The Case of the Eurasian Economic Union. In: Bungenberg, M., Krajewski, M., Tams, C.J., Terhechte, J.P., Ziegler, A.R. (eds) European Yearbook of International Economic Law 2018. European Yearbook of International Economic Law, vol 9. Springer, Cham. https://doi.org/10.1007/8165_2018_24
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