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INSIGHTS BRUSSELSA regular alert on key EU policy developments Issue 27 February 2016

Digital and Energy drives 2016 legislative work programme

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EU, what else? 3

Digital – Paving the way for a Digital Single Market 4

E-Commerce and Online Services 5

Networks and Cybersecurity 8

EU Digital Single Market, Packages of Initiatives for 2015 10

Energy – 2016: translating the EU strategy into new legislative proposals 11

Sustainability 11

Security of Supply 13

Competitiveness 14

EU Energy Policy: A multi-faceted approach for 2016 15

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EU, what else?

The complexity and diversity of issues on the table of EU policy makers is set to increase in the coming months. This comes on top of European challenges old and new which threaten the very essence of the European Union project.

The EU and its institutions have never had to bear the weight of so many pressures at any one time. From minimising the risks and impact of a new economic slow-down to the stabi-lization and governance of the Eurozone, from enhanced co-operation on the security front and de-escalation of conflicts in the Middle East and the Mediterranean region to the scru-tiny of doubtful national measures that may breach European legal standards and the resettlement of the UK within the EU, it’s unsurprising that public confidence in the Union’s actions is at an ebb.

Decades of vague and ungainly communication of and around EU activities, the conflict between people’s expectations and the EU’s empowerment, waning political energy and leader-ship, as well as inaction at the national level despite declared engagement, continue to overshadow the question of the cost for citizens, business and the wider world of not having the EU in place.

The response to that question cannot be maintenance of the status quo. Nor can it be a retreat of the EU bureaucracy into its bubble or a restructuring whereby “everything needs to change, so everything can stay the same” in the words of To-masi di Lampedusa in his novel “The Leopard”. The debate

at the EU summit later in February and the exchanges on the UK’s position in the EU to follow throughout the year around the “new settlement for the United Kingdom within the Euro-pean Union” can and should offer an opportunity for candid and thorough reflection on what the EU should stand for. A new ambitious project for the EU with a mission and goals with the potential to re-engage European citizens.

Some early signs of a change of mind-set can be perceived in the Commission’s work programme for 2016. It looks much more focused in terms of the number of legislative pro-posals to be tabled and oriented towards sectors and issues that have a direct impact on people and business life. In this edition of Insight Brussels we examine two of the 23 policy areas covered by the EC programme that in our view are more subject to review, chiefly Energy and Digital. Meanwhile, there are still around 400 legislative proposals under exam-ination by the European Parliament and the Council, and a number of so-called delegated and implementing legislative acts to be finalised, primarily by the European Commission in consultation with experts from the 28 Members States to ensure effective implementation at the national level of EU laws that have already been adopted.

This last stretch of the EU law-making process is at least as important as forthcoming legislative proposals to be tabled.

Leonardo Sforza, Managing Director

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Paving the way for a Digital Single MarketIn 2016, the European Commission plans to translate all the initiatives announced in the Digital Single Market (DSM) strategy of May 2015 into individual legislative and non-legislative proposals. Besides the first two pro-posals presented in December 2015 on cross-border port-ability of online content services and on the revision of the copyright framework, the Commission will this year address several other major topics, such as geo-block-ing, cybersecurity, online platforms and allocation of the radio spectrum.

The European Parliament is already making its voice heard, with the adoption of a non-legislative report on 19 January, in which it calls on the Commission to table its reforms without delay, while focusing on increasing consumer choice online. European stakeholders are also actively contributing to the debate given the many finan-cial, legal and cultural interests at stake. This January, there still seems to be a long way to go before achieving an operational DSM, but 2016 will undoubtedly be an in-tensive legislative year on the digital dossiers.

Digital

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E-Commerce and Online Services > Proposal on phasing out Geo-blocking

Proposal in MayGeo-blocking refers to commercial practices that prevent on-line customers from accessing and purchasing a product or a service from a website based in another Member State. The European Commission considers this practice to be unjusti-fied because it fragments the internal market, preventing con-sumers from buying products that are only available outside of their own Member State. The Commission is planning to break down unjustified commercial barriers, for example the charging of different prices or the offer of a different range of goods depending on a consumer’s country of residence. It could also include targeted change to the e-commerce rules. During a Council meeting at the end of January, the Euro-pean Ministers for Industry expressed their support for the Commission’s approach. On this occasion, the first results of a public consultation on geo-blocking held in 2016 were also presented. A large majority believe that geo-blocking creates significant obstacles to the single market and therefore call for a legislative solution, but many companies are strongly opposed to requiring traders to sell and deliver goods outside of the areas where they would normally do business. The Commission is expected to present a dedicated legislative proposal in May 2016.

Reforming geo-blocking across the EU is a sensitive issue as it impacts the business model of many service providers and broadcasters. The English Premier League underlined that “any legislative initiative must be approached with great care and should respect both contractual freedom and territo-rial exclusivity which are key for a successful and sustainable future for the creative industries”. On the contrary, the Europe-an Consumer Organisation BEUC claimed that, “if consumers could purchase content available in other Member States, they would have less of a reason to turn to piracy”.

> Proposal for a cross-border Parcel Delivery Directive

Proposal in MayOn 22 December 2015, the European Commission confirmed its intention to propose rules to make cross-border parcel de-livery cheaper in order to boost e-commerce. Almost 4 billion parcels are ordered online every year in the EU, but very few citizens order parcels from other Member States, as the costs are broadly considered too expensive. This conclusion was drawn from the public consultation on parcel delivery that was held in 2015, in which many consumers who indicat-ed that they had considered buying online tended to decide against the purchase due to high delivery prices.

The Commission will now work on measures to improve regulatory oversight in the sector, and ensure transparency of prices. It aims to present initiatives to this effect in May 2016, but rules out price regulation of the parcel sector. For the moment, the Commission has announced some “targeted measures” but has not clarified what form these will take.

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> Revision of the Copyright Framework

Proposals in JuneThe copyright reform will be one of the hot topics for the Eu-ropean institutions this year. In December last year, the Com-mission published an “action plan” to modernize EU copy-right rules, citing several areas of work which will lead to legislative proposals in 2016. More specifically, the Commis-sion intends to put forward measures to ensure a balanced distribution of the value generated by the diffusion of cop-yright-protected content between rights holders and online intermediaries. It also plans to adapt copyright exceptions to digital and cross-border environments, especially text and data mining for research and education purposes. Most im-portantly, the Commission will eventually put forward meas-ures to improve copyright enforcement across the EU.

Many stakeholders reacted to this announcement, triggering a heated debate on EU copyright reform. The Society of Audio-visual Authors welcomed the Commission’s commitment on authors’ remuneration and tackling piracy. Equally, the Au-thors’ group (representing over 500,000 authors) agreed with the Commission’s plans to provide an effective and balanced enforcement system. On the other hand, associations defend-ing users’ rights criticised the Commission’s lack of ambition and clarity, as well as its piecemeal strategy of fragmenting the reform instead of tackling all issues at once.

To reform the EU copyright regime, the Commission’s ap-proach will be manifold. The first legislative proposals, ex-pected in June 2016, will tackle the issues of the extension of exceptions (text and data mining for education purposes, illustration for teaching and panorama) and cross-border dis-tribution of television and radio programmes. Later this Au-tumn, the Commission will present a legislative proposal on the enforcement of the legal framework of intellectual prop-erty rights. A public consultation on this issue is currently underway and will close on 1 April.

> Review of the Audiovisual Media Services Directive

Proposal in JuneIn 2016, the European Commission intends to review the Audiovisual Media Services Directive which governs EU-wide coordination of national legislation on all audiovisual media, both traditional TV broadcasts and on-demand ser-vices. The main objective of its review is to adapt the regula-tory framework to the latest technological developments and the emergence of new audiovisual media (on demand plat-forms, streaming services, etc.). The European Commission also plans to take the opportunity in this review to update rules related to the promotion of European works, the pro-tection of minors and consumers, and the fight against racial and religious hatred.

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In a preliminary assessment of the answers given to its public consultation, the European Commission observed that stakeholders were in favour of maintaining the status quo as regards accessibility for people with disabilities, the provisions related to events of public interest and measures dealing with the right of reply. On the other hand, it noted that there is no clear consensus on protection of minors and promotion of European works. The results will feed into the preparation of the legislative proposal which is expected to be presented in June.

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> Comprehensive Assessment on the Role of Online Platforms

Communication in Q2In the coming months, the European Commission is expect-ed to publish the results of its public consultation on the role of online platforms, which closed in January. The Commis-sion believes that the emergence of platforms can bring many benefits to consumers and suppliers via e-commerce, but is concerned about the use of personal data, the protection of consumers and the growing bargaining power of these plat-form on smaller market players. The Dutch presidency of the Council claimed at an informal meeting on competitiveness that online platforms raise several questions, notably in the areas of taxation and responsibility. In a public consultation on this issue closed held in 2015, respondents identified un-certainties regarding rights and obligations for users and pro-viders as a major problem for the development of platforms and collaborative economy. They pointed out that platforms should be more transparent, especially regarding current ser-vice providers, search results, mechanisms for making criti-cism, and terms and conditions for the use of data. A com-bination of regulatory solutions, self-regulatory and market dynamics could solve these problems, according to them.

Many stakeholders expressed concerns over the Commis-sion’s plan to create a uniform regulatory framework. EDIMA, the European association representing major online plat-forms (Amazon, Apple and Facebook), stated that platforms should “not be subjected to any increased legal obligations or unreasonable or unworkable conditions”, pointing out that cur-rent legislation already addresses many of the Commission’s concerns and there is “no reason to create a rule for online platforms that is different than a physical store”. On the other hand, academic institutions such as the Cologne Research Institute recommended that the EU guarantee a level playing field and that “transparency of online platforms is important in order to ensure trust in them”. Jean Tirole, 2014 Nobel Laure-ate in Economics, stated that the “regulation should not build up entry barriers to new players” and that authorities will have to face many challenges, such as discrimination of users on the basis of their preferences or labour, and fiscal issues caused by the sharing economy (such as Airbnb or Uber).

It is the first time that this sensitive issue is being addressed by the Commission. The results of the consultation will feed into a “comprehensive assessment” on the role of platforms the results of which will be published in the first half of 2016. It is not certain yet if the European Commission will translate this exercise into a more binding legislative proposal.

> Proposal for a Regulation on Cross-border Portability of Online Content Services

Proposal in 2015 – Agreement in Q4Films, music or e-books purchased in one EU country are not always accessible when people travel to other Member States, for example on holidays or a business trip. Consid-ering this as an obstacle to free movement of goods, the Eu-ropean Commission in December presented a proposal for a regulation to allow cross-border portability of online content services. In practice, this means that EU residents who are temporary in another European country will be able to have access to the digital content they have purchased or sub-scribed to at home.

While the proposal was well received by consumer organi-sations, it has raised concerns among creative stakeholders such as producers, distributors and broadcasters, who com-plain of a lack of legal certainty, especially surrounding the vague notion of “temporary presence” in another Member State. Concerns were also raised on the impact it might have on current licensing practices for rights holders. The Interna-tional Federation of Film Producers Associations underlined their position that “licensing distribution rights by territory re-mains fundamental to the financing, production and distribu-tion of content not just in the EU, but worldwide”.

The proposal will be examined by the Parliament and the Council in the coming months, with a view to reach an agree-ment by the end of the year.

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Networks and Cybersecurity > Proposal on a Decision on the 700MHz Band

Proposal in FebruaryThe Commission is also planning to harmonise the use of radio spectrum in the EU, focusing on the 700 MHz band. This Ultra High Frequency (UHF) band is currently used by terrestrial broadcasting networks and wireless microphones, and will be fundamental in coming years for the development of many more new devices with online connections (i.e. the Internet of Things). However, EU Member States still consid-er the allocation of UHF band to be a national competence and have already started to distribute it according to their domestic rules. In order to allocate the UHF band in a har-monised manner, the Commission presented this February a decision which aims to reorganise, by 2020, the allocation of radio spectrum by dividing it into two parts: the upper part of radio spectrum (the 700 MHz band) will be dedicated exclu-sively to mobile operators, whereas audiovisual services and TV broadcasters will be moved to the lower part (the sub-700 MHz band), including digital terrestrial television (DTT) channels. The chosen legislative instrument is a decision, which will now be examined by the Parliament and Member States in the coming months, for an adoption expected at the end of 2016.

> Communication on Cloud Computing

Communication in MarchOn 15 January 2016, the European Commission announced that it will present in spring a proposal on the development of cloud computing in the EU. The results of a recent con-sultation addressing cloud computing indicate that a clear distinction between personal and non-personal data should be made, according to the respondents. A majority of citi-zens and businesses agree with the default policy that would make data generated by publicly funded research available through open access. Finally, respondents consider the exist-ing legal framework to be obsolete, especially regarding the development of the Internet of things and data related issues, affecting the use of the related services and goods, as well as users’ trust in them. These results will feed into the Com-mission’s upcoming Communication, which is expected in March.

> Proposal for a Network and Information Security Directive

Formal approval in Q1-Q2Early in December 2015, the European Parliament and the Council of Ministers achieved a key component of the Euro-pean cybersecurity strategy by reaching an informal agree-ment on the Network and Information Security (NIS) direc-tive.

The provisional deal aims to improve cybersecurity capabili-ties in Member States, with the establishment of a list of es-sential services operators, which refer to companies active in the energy, financial services, banking, transport or health-care sectors. They will be required to ensure that they are robust enough to resist cyber-attacks and will have to notify public authorities designated by Member States of any sig-nificant cyber incidents. Digital services providers also fall within the scope of the Directive, including online market-places, search engines and cloud services. Concretely, inter-net companies such as Google, Amazon or eBay will have to ensure that their infrastructures are safe and to report major incidents.

This directive still needs to be formally approved by both the Council and the Parliament in spring 2016. Thereafter, Mem-ber States will have 21 months to implement the Directive into their own national law systems, and will have another 6 months to identify the essential service operators.

The European Commission also plans to launch in June-July 2016 a public-private partnership with the industry which will focus on research and innovation in order to develop the EU’s competitiveness in the cybersecurity field. A public consultation is open until 11 March 2016 in order to gather stakeholders’ views on the areas of work or on additional measures to be included.

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> Review of the Satellite and Cable Directive

Proposal in JuneThe Commission plans to review the 1995 Satellite and Cable directive with a view to improving the cross-border distribution of television and radio programmes via satel-lite broadcasting and cable retransmission. The rationale is to update the legislation in response to technological devel-opments and new business models of content distribution. A public consultation in late 2015 aimed to assess whether the current country-of-origin regime needs to be enlarged to cover broadcasters’ online transmissions and whether fur-ther measures are needed to improve cross-border access to broadcasters’ services in Europe. Some stakeholders suggest that this would be the most effective way of implementing the Commission’s portability proposals. The results of the con-sultation are expected to be published in the coming months before the presentation of the corresponding legislative pro-posal in June.

> Revision of the Telecom Package

Proposal in June-JulyThe Commission’s DSM strategy foresees a revision of the ‘telecoms’ package in 2016. While provisions on roaming charges and net neutrality were set out last October with the adoption of the previous package, the European Commission already plans to revise the telecom regulatory framework by tackling the issue of the wholesale market mechanism for roaming, introducing investment incentives in ultrafast broadband and ensuring openness of the telecom market to new market entrants. In its report entitled “Towards a Digital Market act” adopted on 19 January 2016, the European Par-liament emphasised that investment in ultra-fast broadband and a stable regulatory framework were a requirement for any digital progress, but warned that competition rules should be enforced in order to avoid the creation of oligopolies at Eu-ropean level, which would cause a negative impact for con-sumers. The Commission announced that it will present its proposals in June-July 2016.

> Revision of the e-privacy directive

Consultation in Q2 – proposal in 2017The European institutions have been struggling to agree on the EU Data Protection Reform since 2012. On 15 Decem-ber 2015, the European Parliament and the Council finally reached an agreement that will make way for data protection systems at European level, replacing the current patchwork of national data protection legislation. Users will have much greater control over their data, such as the right to be delet-ed, forgotten or have personal information corrected. A ‘one stop shop’ mechanism will also be created. In case of conflict, companies will refer to this single entity, which will be a data protection authority of the country where their headquarters are. The agreement must still be formally adopted by the

European Parliament and Council at the beginning 2016.The new rules will come into force two years later.

Following formal adoption of the Data Protection Reform, the Commission intends to prepare a legislative proposal for a directive that reforms the ePrivacy directive. Its aim will be to align with the new data protection reform, and will focus more on provisions regarding cookies, traffic and location data, and unsolicited communications.

As a preliminary assessment of the challenges and objectives of its future reform, the Commission is likely to open a public consultation on the ePrivacy directive at the end of March. It will also hold workshops with stakeholders and telecom groups that have already expressed their concerns about the revision of the current directive, which could increase regu-lation of their sector while not imposing similar rules on big internet companies. Further details will be revealed this sum-mer, before a formal presentation of the proposal in 2017.

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Revision of the Satellite and Cable Directive

Proposal in June

Comprehensive assessment on the role

of Online platforms

Communication in Q2

Proposal on cloud

computing

Proposal in March

Revision of the Telecom Package

Proposal in June-July

Review of the Audiovisual

Media Services Directive

Proposal in June

Legislative proposals on Copyright

Proposal in June

Cross-border delivery of packages

Proposal in May

Proposal on a Directive on the 700MHz Band

Proposal in February

Proposal on Phasing out Geo-Blocking

Proposal in May

Launch of Cybersecurity PPP

June-July

Revision of the e-Privacy Directive

Consultation in Q2 – proposal in 2017

Proposal for a Regulation on Cross-border portability of online content services

Proposal in 2015 – Agreement in Q4

EU Digital Single Market:

Packages of Initiatives for 2016

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2016 : translating the EU strategy into new legislative proposals In its first “State of the Energy Union” released at the end of 2015, the European Commission reviewed the progress made since the release of the Strategy and identified key legisla-tive and non-legislative initiatives to be delivered throughout 2016. In the words of Maroš Šefčovič, the European Commis-sion vice president for energy union, 2016 will be the “year of delivery” putting in place most of the pieces of legislation linked to the three European energy objectives of sustainabil-ity, security of supply and competitiveness.

Sustainability The EU is well on track to meet its EU 2020 targets in green-house gas emissions, with levels expected to be 24% lower in 2020 than in 1990 (against the binding target of 20%). The EU is also likely to exceed its renewable energy goals with nineteen Member States expected to exceed their national re-newable energy targets. However, the European Commission believes that further efforts are needed to put the right decar-bonisation incentives in place, especially as regards energy efficiency and the 2030 long-term energy targets.

> Revision of the Renewable Energy Package

Proposal in Q3-Q4Building on the agreed target of 27% renewable energy in the EU energy mix by 2030, the European Commission intends to put forward a new Renewable energy Energy Package in 2016, comprising a new Renewable Energy Directive for 2030 and a proposal on bioenergy sustainability. The pack-age is expected to progressively harmonise national support schemes for renewables, with the objective of addressing market distortions and avoiding overcompensation. Repre-sentatives of renewables industries already fear a reduction in public support schemes for renewable energy sources and are calling for more legal certainty so as not to jeopardise long-term investments. In a separate proposal, which will come under strong scrutiny from biofuel producers, the Com-mission also plans to include measures related to biomass and biofuels, with a particular focus on their impact on the environment, land-use and food production.

Preliminary work started at the end of 2015 with the Euro-pean Commission opening a public consultation to collect stakeholders’ views on policy options for the upcoming re-newable energy directive by February. A separate consulta-tion on bioenergy sustainability policy will be conducted in the first quarter of 2016. Both consultations will inform the decision making process resulting in the presentation of the package by the end of 2016.

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> Revision of EU Emissions Trading System

Agreement in Q3In July 2015, the European Commission presented a propos-al to revise the EU Emissions Trading system for the peri-od after 2020. The proposal intends to increase the pace of emissions cuts after 2020 by reducing the overall number of emission allowances at an annual rate of 2.2% from 2021 on-wards, instead of the current 1.74%. This will result in an automatic increase in carbon costs, thus having a particular impact on energy intensive industries. The Alliance of En-ergy Intensive Industries already warned that a linear cut in ETS will de-industrialise Europe before it decarbonises Euro-pean manufacturing.

The European Parliament and the Council of the European Union are currently discussing the proposal. A public hear-ing is scheduled at the European Parliament on 18 February with a view to inform the debate before the finalisation of the Parliament’s report which is expected in November. The final adoption of the proposal will occur in 2017.

> Revision of the Energy Efficiency Directive

Proposal in Q3In a progress report on the implementation of the target of 20% energy efficiency by 2020, the European Commission remarks that collective efforts made by Member States would currently correspond to only 17.6% by 2020. Therefore, the Commission intends to reap the full potential of energy ef-ficiency in 2016 by putting forward a new Energy Efficiency Directive. The proposal will align the regulatory framework to the indicative EU-level target of at least 27% energy efficiency by 2030. It will also include provisions for large companies to carry out regular energy audits. Without waiting for the proposal to be actually presented, the European Commission already announced that it will be reviewed a second time by 2020 with the objective to elevate the EU target to 30% ener-gy efficiency by 2030.

In order to prepare its legislative proposal, the European Commission opened a public consultation to collect stake-holders’ views at the end of 2015. The consultation will close on 29 January, with an estimated presentation of the propos-al by the end of 2016.

> Revision of the Energy Labelling Directive

Agreement in Q3In July 2015, the European Commission proposed a revision of the Energy Labelling Directive, including provisions for a single energy labelling scale from ‘A to G’ and a digital da-tabase for new energy efficient products. For producers, the new measures implies that they will have to sell their new

products with the new scale and register their products in a database accessible to Member State authorities to facilitate compliance checks.

The legislative work is currently proceeding under the co-de-cision procedure between the European Parliament and the Council of the European Union. The Industry committee of the European Parliament is expected to adopt its report in May before an adoption in plenary session in June. Inter-in-stitutional negotiations are likely to start during summer.

> Strategy for heating and cooling

Communication in Q1Heating and cooling account for around half of the EU’s en-ergy use, and are expected to remain the largest energy de-mand drivers in the long term. While uncertainties remain about adapting heating and cooling use to meet the 2030 targets, the heating or cooling market is also fragmented and no single market has so far emerged either nationally or EU-wide. Instead, heating markets are local and are composed by many different technologies and economic players

In this context, the European Commission intends to release a Strategy for heating and cooling in February 2016 to drive the transformation of the sector, maximise the use of poten-tials and deploy solutions for demand reduction. It will give guidance to allow driving actions by stakeholders and Mem-ber States on areas where better synergies between current EU instruments could be exploited or where EU and national regulatory frameworks should be complemented.

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Security of supplyThe ongoing Ukraine crisis, persistent low oil prices, new projects for gas pipelines from Russia and the nuclear agree-ment with Iran have shown that Europe needs to support a more coherent foreign and energy policy to better take into account geopolitical developments. As such, in 2016, the Eu-ropean Commission will put forward a certain number of pro-posals to better address current challenges in energy supply.

> Revision of the Security of Gas supply Regulation

Proposal in Q1In February, the European Commission will present a revi-sion of the Regulation on the security of gas supply to im-prove the EU’s resilience to supply disruptions. The proposal is expected to include a clearer definition of the consumers to be protected in case of a crisis; mechanisms for enhanced cooperation between neighbouring Member States and tools to increase access to necessary confidential information in case of an alert.

In 2015, the European Commission undertook a stakeholder consultation which attracted around 100 contributions from companies and associations. While a majority supported an improvement in standards, a number of EU Governments and transmission system operators (TSOs) oppose any binding commitment, leaving a decision on regional approach to the Member States. Many submissions to the public consultation highlighted the importance of reverse flows, energy storage and LNG for security of supply. All these issues will be dis-cussed during the formal revision of the regulation which will start at the beginning of 2016.

> Revision of the Security of Electricity supply Regulation

Proposal in Q2The Commission intends to put forward a proposal to revise the Security of Electricity Supply by summer 2016. The re-vision will deal with risk identification and preparedness re-lating to security of electricity supply, in particular with how Member States should prepare themselves and co-operate with others.

Following a public consultation launched in 2015, the Eu-ropean Commission communicated that 75 respondents replied, mostly companies active in the field of generation, transmission, distribution and/or supply, as well as profes-sional associations. Whilst acknowledging the need for a common approach and more regional co-operation, a sig-nificant number of stakeholders stated that there should be sufficient room for tailor-made, national responses to secu-rity of supply concerns, as there are substantial differences between national electricity systems.

> Revision of the decision on Intergovernmental agreements in the field of energy

Proposal in Q1The Commission is also preparing a proposal to revise the current Decision on intergovernmental agreements in the field of energy. The proposal will aim at improving the in-formation exchange mechanism with regard to intergovern-mental agreements (IGAs) between Member States and third countries. The Commission wants to carry out compliance checks on IGAs with EU legislation and policies after the conclusion of such agreements. Given the sensitivity of the information included in the highly political and commercial agreements, the debate in Brussels promises to be lively dur-ing the negotiation process between EU officials and national representatives.

> Strategy for Liquefied Natural Gas and Gas Storage (LNG)

Communication in Q1In January, the European Commission put forward a strategy to explore the full potential of LNG and gas storage, espe-cially as a back-up in crisis situations. The strategy tackles the issues of LNG access points within the internal market and discuss options to overcome obstacles related to LNG imports, in particular from the United States. Over a hun-dred responses were received during the public consultation which was open until 30 September 2015.

> Communication on Energy interconnections

Communication in Q3With regard to electricity infrastructure, the European Com-mission has noted that 22 Member States are on track to reach the 10% electricity interconnection capacity target for 2020. In order to upgrade the objectives in the longer term, the Commission foresees a Communication in 2016 on the necessary measures to reach the 15% electricity interconnec-tion target for 2030.

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CompetitivenessThe European Commission acknowledges the underper-formance of the EU energy system in terms of investment, competition and regulatory fragmentation. To address such a gap, it will introduce in 2016 a new proposal on Electricity Market Design, a topic of utmost importance to the energy business community.

> Proposal for an Electricity Market Design Directive

Proposal in Q3In 2016, the European Commission will put together a pro-posal on Electricity Market Design to improve the full inte-gration of new market players, and particularly renewables. The objective of the proposal will also be to connect up the wholesale and retail markets by strengthening regional coop-eration and increasing cross-border trade. The presentation of the proposal is expected in the second half of 2016.

Taking stock of the 320 answers to its public consultation launched in 2015 to prepare its proposal, the Commission notes that a large number of stakeholders see a need for legal measures to speed up the development of cross-bor-der balancing markets. Most stakeholders also supports the full integration of renewable energy sources into the market through full balancing obligations for renewables, phasing out priority dispatch and removing subsidies during negative price periods. They also point at specific regulatory barriers to demand response, primarily with regard to the lack of a standardised and harmonised framework.

> Implementation of State aid guidelines for the environment and energy

OngoingIn its State of the Energy Union report, the European Com-mission also highlighted its will to make full use of the tools of its competition policy to guarantee that Member States’ support for their national energy market is in line with the EU State Aid Guidelines for the environment and energy, as adopted in 2014. In practical terms, this means that the Eu-ropean Commission may investigate in more depth Member States’ practices on granting aid to market players, in order to ensure that such practices are made in a competitive bidding process on the basis of clear, transparent and non-discrimi-natory criteria.

> Allocation of EU funds for Research and Innovation

OngoingTaking into account that research and innovation are para-mount to accelerating the EU energy transition, the European Commission will make full use in 2016 of its financing tools to support research projects. Throughout 2016, the Europe-an Union will focus on providing financial support via its Strategic Energy Technology Plan (SET), its European Fund for Strategic Investment (EFSI), its new Innovation Fund, its Modernisation Fund and its overarching Horizon 2020 Framework programme.

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Revision of the Security of Electricy Supply Regulation

Proposal in Q2

Revision of the Energy Efficiency Directive

Consultations in Q1 - Proposal in Q3

Allocation of EU funds for R&D

Ongoing

Revision of the Decision on Intergovernmental agreements in the field of energy

Proposal in Q1

Strategy for Heating and cooling

Communication in Q1

Revision of the EU Emissions Trading

System

Agreement in Q3

Revision of the renewable Energy

Package

Consultations in Q1 - Proposal in Q3

Proposal for an Electricity Market

Design Directive

Proposal in Q3

Strategy for liquiefied natural gas

Communication in Q1

Revision of the Security of Gas

Supply Regulation

Proposal in Q1

Revision of the Energy Labelling Directive

Agreement in Q3

EU Energy Policy:

A multi-faceted approach for 2016

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Leonardo Sforza leonardo.sforza@mslgroup.com

Olivier Hinnekens olivier.hinnekens@mslgroup.com

Romain Seignovert romain.seignovert@mslgroup.com

Alastair Bealby alastair.bealby@mslgroup.com

François Troussier francois.troussier@mslgroup.com

Web WWW.MSLGROUP.COM

Twitter @MSL_BRUSSELS

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