The EU Energy Council's has reached a decision on a new directive regarding emergency oil stocks. The decision looks set to align the EU methodologies and usage with those of the International Energy Agency (IEA).
EU Energy Commissioner Andris Piebalgs stated that the new legislation will bring the EU system of oil stocks closer to current international practices and strengthen the Community's capacity to use the stocks effectively so as to minimise the negative effect on consumers in case of a supply crisis.
Member States will now be required to hold emergency reserves equivalent to at least 90 days of net oil imports. However, the availability of such emergency stocks will be improved as the new directive insists that stocks may not be pledged or otherwise encumbered.
The new directive also requires that at least one-third of the emergency stocks must be composed of products in proportions corresponding to consumption patterns of the Member States. These stocks will have to be owned by the Member State or its stockholding agency, or held in arrangements ensuring the same level of public control.
The updating of the legislation, originally passed in 1968, will assure a coordinated EU-IEA response in case of an oil crisis, and was deemed necessarily due to some of the EUs Member States not being members of the IEA.
The new legislation also gives the EU new powers, such as allowing it to review and audit the stockholdings maintained by the different Member States to enable it to react more efficiently in situations of crises since no significant use of stocks will in practice be possible without an agreement at EU-level on its appropriateness.
In case of an IEA action, the Commission will be able to ensure a coordinated and timely contribution of the whole European Union to the IEA efforts on equal terms.
Member States will have until the 31 December 2012 to transpose the new directives proposals in their national laws.