(1)

The Russian Federation, the Union’s main external gas supplier, has started a military aggression against Ukraine, a Contracting Party of the Energy Community. The escalation of the Russian military aggression against Ukraine since February 2022 has led to gas supplies declining markedly, in a deliberate attempt to use gas supply as a political weapon. Pipeline flows of gas from Russia through Belarus have stopped and gas supplies through Ukraine have steadily decreased. Overall gas flows from Russia are now less than 30 % of average gas flows in the period 2016-2021. That supply reduction has led to historically high and volatile energy prices, contributing to inflation and creating a risk of further economic downturn in Europe.

(2)

Against this background, the Commission, further to its communication of 8 March 2022 entitled ‘REPowerEU: Joint European Action for more affordable, secure and sustainable energy’, presented the REPowerEU plan on 18 May 2022 with the aim to end the Union's dependence on Russian fossil fuels as soon as possible, and at the latest by 2027. To achieve that aim, the REPowerEU plan sets out measures related to energy savings and energy efficiency and proposes an accelerated roll-out of clean energy to replace fossil fuels in homes, industry and power generation. Further measures on the supply side could include, inter alia, better coordination of gas purchases and the facilitation of joint purchases by European gas market operators on the international gas market, as well as best efforts to preserve electricity production capacities that do not rely on imported gas supplies.

(3)

The Union has taken further measures to increase its level of preparedness as regards gas supply disruption. Regulation (EU) 2022/1032 of the European Parliament and of the Council (1) was adopted to ensure the filling of underground storage sites for the coming winter seasons.

(4)

Furthermore, in February 2022 and in May 2022 the Commission carried out in-depth reviews of all national emergency plans and has also carried out in-depth monitoring of the security of supply situation. The measures taken by the Union since February 2022 were designed to enable a full phase-out of Russian gas by 2027, and to reduce the risks stemming from a further major supply disruption.

(5)

However, the recent escalation of disruption of gas supply from Russia points to a significant risk that a complete halt of Russian gas supplies may materialise in the near future, in an abrupt and unilateral way. The Union should therefore anticipate such a risk and prepare, in a spirit of solidarity, for the possibility of a full disruption of gas supply from Russia at any moment. Immediate proactive action is necessary to anticipate further disruptive action and strengthen the resilience of the Union to future shocks. Coordinated action at Union level can avoid serious harm to the economy and to citizens resulting from a possible gas supply interruption.

(6)

The current legal framework for security of gas supply set by Regulation (EU) 2017/1938 of the European Parliament and of the Council (2) does not adequately address disruptions of a major gas supplier lasting more than 30 days. The lack of a legal framework for such disruption leads to a risk of uncoordinated action by Member States, which threatens to endanger security of supply in neighbouring Member States and may place an additional burden on the Union’s industry and consumers.

(7)

In its resolution of 7 April 2022 on the conclusions of the European Council meeting of 24-25 March 2022, the European Parliament called for a plan to continue ensuring the Union’s security of energy supply in the short term to be presented. In its meetings on 31 May and 23 June 2022, the European Council requested the Commission to make proposals for improving preparedness for possible major supply disruption as a matter of urgency, with a view to securing energy supply at affordable prices. Following that request from the European Council, the Commission is exploring together with the Union’s international partners ways to curb rising energy prices, including the feasibility of introducing temporary import price caps where appropriate. Further to that request, the Commission is also pursuing work on the optimisation of the functioning of the European electricity market, including the effect of gas prices on it, so that it is better prepared to withstand future excessive price volatility, delivers affordable electricity and fully fits a decarbonised energy system, while preserving the integrity of the single market, maintaining incentives for the green transition, preserving the security of supply and avoiding disproportionate budgetary costs.

(8)

Article 122(1) of the Treaty on the Functioning of the European Union enables the Council to decide, on a proposal from the Commission and in a spirit of solidarity between Member States, upon the measures appropriate to the economic situation, in particular if severe difficulties arise in the supply of certain products, notably in the area of energy. The risk of a complete halt of Russian gas supplies by the end of 2022 constitutes such a situation.

(9)

Given the imminent risk of disruption of gas supplies to the Union, Member States should take measures now to reduce their demand ahead of the 2022-23 winter season. Such voluntary demand reduction would contribute in particular to the filling of storage capacities, which would not be depleted by the end of the 2022-23 winter season and would therefore enable Member States to cope with possible cold spells in February and March of 2023 and facilitate the filling of storage capacities to ensure adequate levels of security of supply for the 2023-24 winter season. Reducing demand for gas will also help ensure adequate supply and drive energy prices down, to the benefit of Union consumers. Therefore, measures taken at Union level to reduce demand would benefit all Member States by decreasing the risk of a more substantial impact on their economies.

(10)

The volume of the voluntary demand reduction takes into account the volumes of gas demand which would be at risk of non-delivery in the event of a full disruption of Russian gas supply. The reduction effort should be the same for all Member States, based on a comparison with each Member State's average consumption over the last five years.

(11)

Voluntary demand-reduction measures may not by themselves be sufficient to ensure security of supply and market functioning. Therefore, in order to promptly address the specific challenges of the ongoing and anticipated severe worsening of gas supply shortages and avoid distortions between Member States, a new instrument introducing the possibility for a mandatory gas demand reduction for all Member States should be established. It should become operational sufficiently in advance of autumn 2022. Under such instrument, the Council could, on a proposal from the Commission, declare a Union alert by means of an implementing decision. Conferring an implementing power on the Council adequately takes into account the political nature of the decision to trigger a mandatory Union-wide demand-reduction obligation and its horizontal implications for Member States. Before presenting such a proposal, the Commission should consult the relevant risk groups, as set out in Annex I of Regulation (EU) 2017/1938 (‘risk groups’), and the Gas Coordination Group (GCG), established by that Regulation. A Union alert should only be declared in the event that the voluntary demand-reduction measures prove to be insufficient to address the risk of a serious supply shortage. Five or more competent authorities of Member States which have declared national alerts pursuant to Article 11(1), point (b), of Regulation (EU) 2017/1938 should be given the possibility to request the Commission to present a proposal to the Council to declare a Union alert.

(12)

The Union alert should serve as a Union-specific crisis level, which should trigger a mandatory demand reduction, independently of national crisis levels pursuant to Article 11(1) of Regulation (EU) 2017/1938. Once a Union alert has been declared, Member States should reduce their gas consumption within a pre-defined period. The volume of the mandatory demand reduction takes into account the volumes of gas demand which could be at risk in the event of a full disruption of Russian gas supplies to the Union and should fully take into account any demand reduction already achieved. The volume of the mandatory demand reduction should also take into account the level of storage filling as reported pursuant to Article 6d(1) and (2) of Regulation (EU) 2017/1938, the development concerning the diversification of sources of gas, including liquefied natural gas (LNG) supplies and the development of fuel substitutability in the Union.

(13)

Demand reductions achieved by Member States before the Union alert is declared will be reflected in the volume of the mandatory demand reduction.

(14)

In view of the significant distortions of the internal market which are likely to occur if Member States react in an uncoordinated manner to a potential or actual further disruption of Russian gas supply, it is crucial that all Member States reduce their gas demand in a spirit of solidarity. All Member States should therefore achieve the voluntary and mandatory demand-reduction targets. While some Member States might be more exposed to the effects of a disruption of Russian gas supplies, all Member States could be negatively affected and could contribute to limiting the economic harm caused by such disruption, be it by freeing up additional volumes of pipeline gas or LNG cargoes which can be used by Member States with significant gas deficits, by the positive effect on gas prices which a demand reduction is likely to have or by avoiding market distortion through uncoordinated and contradicting demand-reduction measures. This Regulation therefore reflects the principle of energy solidarity, which has recently been confirmed by the Court of Justice as a fundamental principle of Union law (3).

(15)

However, certain Member States are, due to their specific geographical or physical situation, such as not being synchronised with the European electricity system, or their lack of direct interconnection to the gas interconnected system of another Member State, not able to free up significant volumes of pipeline gas to the benefit of other Member States. Member States should therefore be given a possibility to rely on one or more grounds to limit their mandatory demand-reduction obligations. The Member States concerned should commit to making all efforts to remove the interconnection deficits as soon as possible.

(16)

Regulation (EU) No 347/2013 of the European Parliament and of the Council (4) puts in place a framework for Member States and relevant stakeholders to work together in a regional setting to develop better-connected energy networks with the aim, in particular, to connect regions currently isolated from European energy markets and to strengthen existing and promote new cross-border interconnections. Cross-border interconnections strongly contribute to the security of supply. In light of the current disruption of gas supply from Russia, such cross-border interconnections play a key role in ensuring the functioning of the internal energy market and in the distribution of gas to other Member States, in a spirit of solidarity. In this context, Member States should pursue their efforts to improve the integration of their networks, including by assessing the potential increase of new cross-border interconnection capacity in line with the objectives of Regulation (EU) 2022/869 of the European Parliament and of the Council (5).

(17)

In order to facilitate Member States’ efforts to fulfil the objectives of Regulation (EU) 2022/1032 with regard to gas storage, the volume of gas used by Member States for storage in excess of the intermediate target for 1 August 2022 should also be taken into account for the purpose of determining the volume of their mandatory demand reduction.

(18)

In addition, to take proper account of the high dependency on gas of Member States’ critical industries, Member States should be able to exclude gas consumption in those industries when determining the volume of their mandatory demand reduction. Monitoring by the Commission should ensure that national limitations do not lead to undue distortions of the internal market. Member States should also be able to limit the volume of their mandatory demand reduction where such limitation is necessary to maximise the supply of gas to other Member States and where they are able to produce evidence that their interconnector commercial export capacities to other Member States or their domestic LNG infrastructure are used to re-direct gas to other Member States to the utmost extent. The Commission should monitor that the conditions for the application of those derogations are fulfilled.

(19)

The Member States, with regard to specific demand circumstances from interconnected Member States, should be able to temporarily limit the mandatory demand reduction where necessary to ensure security of energy supply, including where a Member State faces an electricity crisis as referred to in Regulation (EU) 2019/941 of the European Parliament and of the Council (6). Account should also be taken of the storage capacity and the storage level in excess of the intermediate target, as set out in Annex Ia to Regulation (EU) 2017/1938.

(20)

Member States should be free to choose the appropriate measures to achieve the demand reduction. When identifying appropriate demand-reduction measures and prioritising customer groups, Member States should consider making use of the measures identified by the Commission in its communication of 20 July 2022 entitled “Save Gas for a Safe Winter”. Member States should in particular consider economically efficient measures such as auctions or tender schemes, by which they can incentivise a reduction of consumption in an economically efficient manner. The measures taken at national level may also include financial incentives or compensation to market participants affected.

(21)

Any measure taken by Member States to achieve the demand reduction must comply with Union law and in particular Regulation (EU) 2017/1938. In particular, such measures should be necessary, clearly defined, transparent, proportionate, non-discriminatory and verifiable, and should not unduly distort competition or the proper functioning of the internal market in gas or endanger the security of gas supply of other Member States or of the Union. It is necessary to consider the interests of protected customers also in relation to gas supply to centralised heating systems in the case of security of supply crisis.

(22)

In order to ensure that demand-reduction measures are implemented in a coordinated manner, Member States should establish regular cooperation within each of the relevant risk groups. Member States are free to agree on the coordination measures best suited in a given region. The Commission and the GCG should be able to have an overview of the national measures implemented by the Member States and share best practices for the coordination of measures within the risk groups. Member States should also use other bodies to coordinate their action.

(23)

In order to ensure that the national emergency plans reflect the voluntary or mandatory demand-reduction measures set out in this Regulation, the competent authority of each Member State should take the necessary steps to update the national emergency plan established pursuant to Article 8 of Regulation (EU) 2017/1938 by 31 October 2022. Given the short timeframe for that update, the coordination procedures pursuant to Article 8(6) to (11) of Regulation (EU) 2017/1938 should not apply. However, each Member State should consult other Member States on the update of its national emergency plan. The Commission should convene the risk groups, the GCG or other relevant bodies to discuss potential issues related to demand-reduction measures.

(24)

Regular and effective monitoring and reporting are essential for the assessment of progress made by the Member States in the implementation of the voluntary and mandatory demand-reduction measures, and for measuring the social and economic impact of those measures as well as the impact on employment. The competent authority of each Member State or another entity designated by the Member State should monitor the demand reduction achieved on its territory and regularly report the results to the Commission. The GCG should assist the Commission in monitoring the fulfilment of the demand-reduction obligations.

(25)

To prevent significant economic harm to the Union as a whole, it is crucial that each Member State reduce its demand after a Union alert has been declared. That reduction will ensure that there is sufficient gas for all, even during the winter. The demand reduction across the Union is an expression of the principle of solidarity, enshrined in the Treaty. It is therefore warranted that the Commission supervise strictly that the mandatory demand reductions are carried out by Member States. In the event that the Commission identifies a risk that a Member State may not be able to fulfil its mandatory demand-reduction obligation, the Commission should be able to request that Member State to submit a plan setting out a strategy and measures to effectively achieve the mandatory demand reduction. That Member State should take due account of any comments and suggestions made by the Commission regarding that plan.

(26)

As the solidarity principle gives every Member State the right to be supported by neighbouring Member States under certain circumstances, Member States who ask for such support should also act in a spirit of solidarity when it comes to reducing their domestic gas demand. Therefore, when requesting a solidarity measure under Article 13 of Regulation (EU) 2017/1938, Member States should have implemented all appropriate gas demand-reduction measures. The Commission should be able to request the Member State requesting a solidarity measure to submit a plan with measures to achieve possible further demand reductions. That Member State should take due account of the Commission’s opinion.

(27)

The Commission should inform the European Parliament and the Council regularly about the implementation of this Regulation.

(28)

Considering the imminent danger to the security of gas supply brought about by the Russian military aggression against Ukraine, this Regulation should enter into force as a matter of urgency.

(29)

Given the exceptional nature of the measures set out in this Regulation, this Regulation should apply for one year after its entry into force. By 1 May 2023, the Commission should report on its functioning to the Council and may, if appropriate, propose to prolong its period of application.

(30)

Since the objective of this Regulation cannot be sufficiently achieved by the Member States, but can rather be better achieved at Union level, the Union may adopt measures, in accordance with the principle of subsidiarity as set out in Article 5 of the Treaty on European Union. In accordance with the principle of proportionality, as set out in that Article, this Regulation does not go beyond what is necessary to achieve that objective,

(1)

Commission Regulation (EC) No 1881/2006 (2) sets maximum levels for certain contaminants, including ochratoxin A, in foodstuffs.

(2)

Ochratoxin A is a mycotoxin naturally produced by fungi of the genus Aspergillus and Penicillium and is found as a contaminant in a wide variety of foods, such as cereals and cereal products, coffee beans, dried fruits, wine and grape juice, spices and liquorice. Ochratoxin A is formed during sun drying and storage of crops. The formation can be prevented by applying good drying and storage practices.

(3)

In 2020, the European Food Safety Authority (‘the Authority’) adopted an update of the scientific opinion on ochratoxin A in food (3). The Authority considered that it was not appropriate to establish a health based guidance value for ochratoxin A and that the Tolerable Weekly Intake of 120 ng/kg body weight (bw) as established by the Authority in 2006 is consequently no longer valid. It further concluded that the calculated margins of exposure for carcinogenic effects of ochratoxin A indicate a possible health concern for certain consumer groups.

(4)

Maximum levels for ochratoxin A have already been established for certain foods by Regulation (EC) No 1881/2006. Taking into account that ochratoxin A has been found in foods for which no maximum level has been established yet and which contribute to the human exposure to ochratoxin A, it is appropriate to set a maximum level also for these foods such as dried fruit other than dried vine fruit, certain liquorice products, dried herbs, certain ingredients for herbal infusions, certain oilseeds, pistachio nuts and cocoa powder. Even if the relationship between the level of ochratoxin A in malt and in non-alcoholic malt beverages, and in dried dates and date syrup needs to be further clarified, it is also appropriate to set already a maximum level in non-alcoholic malt beverages and date syrup. Also taking into account the available occurrence data, it is appropriate to lower the existing maximum levels of ochratoxin A in certain foods, such as bakery products, dried vine fruit, roasted coffee and soluble coffee. In addition, the existing provisions for ochratoxin A in certain spices has been broadened to all spices. For cheese and ham, additional monitoring on the presence of ochratoxin A is appropriate before establishing maximum levels.

(5)

Regulation (EC) No 1881/2006 should therefore be amended accordingly.

(6)

To enable economic operators to prepare for the new rules introduced by this Regulation, it is appropriate to provide for a reasonable time until the new maximum levels apply. It is also appropriate to provide for a transitional period for foodstuffs lawfully placed on the market before the date of application of this Regulation.

(7)

The measures provided for in this Regulation are in accordance with the opinion of the Standing Committee on Plants, Animals, Food and Feed,

(1)

The Bulgarian, Czech, Danish, Dutch, Estonian, Finnish, French, German, Italian, Latvian, Portuguese, Slovenian and Swedish language versions of Commission Implementing Regulation (EU) 2018/2066 (2) contain in Article 38(6) an error that alters the meaning of the provision or wording that can lead to misinterpretation, as regards the indicated period of time and to what it refers.

(2)

The Bulgarian, Czech, Danish, Dutch, Estonian, Finnish, French, German, Italian, Latvian, Portuguese, Slovenian and Swedish language versions of Implementing Regulation (EU) 2018/2066 should therefore be corrected accordingly. The other language versions are not affected.

(3)

The measures provided for in this Implementing Regulation are in accordance with the opinion of the Climate Change Committee delivered on 9 February 2022,

(1)

Meloidogyne graminicola (Golden & Birchfield) is not listed as a Union quarantine pest, protected zone quarantine pest or as a Union regulated non-quarantine pest in accordance with Commission Implementing Regulation (EU) 2019/2072 (3).

(2)

In 2016, Italy informed the Commission that Meloidogyne graminicola (Golden & Birchfield) was first found in its territory in a rice-producing area of Northern Italy. Since then, it has also been found in additional rice fields and the most serious infestations led to crop losses of up to 50 % of the ordinary production.

(3)

In 2017, Italy adopted official measures to prevent the further introduction and spread within its territory of Meloidogyne graminicola (Golden & Birchfield) (4). Meloidogyne graminicola (Golden & Birchfield) is mainly associated with rooted plants of Oryza sativa L. that have been grown in soil and are intended for planting. It is also associated with other host plants, such as barley, but to a lesser extent than with rooted plants of Oryza sativa L.

(4)

Italy is currently the only Member State where the presence of Meloidogyne graminicola (Golden & Birchfield) has been confirmed. Based on a risk assessment carried out by Italy in 2018 (5), it is concluded that that pest fulfils the criteria set out in Subsection 2 of Section 3 of Annex I to Regulation (EU) 2016/2031. It is therefore deemed necessary to adopt temporary measures against that pest. Those measures should take account of the major pathways for its spread, such as plants for planting, soil, machinery and tools, and human-assisted transfer.

(5)

In a certain region within that rice-producing area of Italy, it has been concluded that the eradication of Meloidogyne graminicola (Golden & Birchfield) is no longer possible. Italy should therefore be allowed to apply measures for its containment within that region, instead of eradication. Those measures should be aimed at keeping the levels of Meloidogyne graminicola (Golden & Birchfield) stable. However, if surveys show an increase of the levels of Meloidogyne graminicola (Golden & Birchfield), measures aimed at its eradication should be applied to reduce its levels again and prevent its spread.

(6)

Member States should inform the general public and relevant professional operators about the threat of Meloidogyne graminicola (Golden & Birchfield) and the measures taken against it to ensure a more effective approach by all persons possibly concerned. In particular, Member States should raise awareness about the danger of its spread through footwear and vehicles, because those means are most commonly used by the general public.

(7)

Surveys should be carried out in the demarcated areas and on host plants outside those areas, in order to detect early the potential presence of Meloidogyne graminicola (Golden & Birchfield) and prevent its spread to the rest of the Union territory. Member States should conduct annual surveys based on an assessment of the risk of introduction of Meloidogyne graminicola (Golden & Birchfield).

(8)

In view of the evidence from Italy and of the wide distribution of Meloidogyne graminicola (Golden & Birchfield) in rice-producing third countries, it is necessary to check that certain conditions were fulfilled in those third countries, with respect to the rooted plants for planting of Oryza sativa L., prior to their introduction into the Union. In particular, those conditions should concern the freedom of the site or place of production from the pest, the official inspections to be carried out and the necessary declarations on the phytosanitary certificate. These conditions are necessary to ensure freedom of those plants from Meloidogyne graminicola (Golden & Birchfield).

(9)

Furthermore, it is necessary that, at arrival, rooted plants for planting of Oryza sativa L. are visually inspected and, where showing symptoms of Meloidogyne graminicola (Golden & Birchfield), sampled and tested for the presence of that pest, in order to identify its possible presence or ascertain its absence.

(10)

Measures should also be provided for the movement within the Union of rooted plants of Oryza sativa L. that originate in the Union. In order to ensure the appropriate level of phytosanitary protection, the movement of those plants and soil from the demarcated areas to the rest of the Union territory should be prohibited.

(11)

This Regulation should apply for an adequate length of time to allow for its review and the review of the presence and the spread of Meloidogyne graminicola (Golden & Birchfield).

(12)

The measures provided for in this Regulation are in accordance with the opinion of the Standing Committee on Plants, Animals, Food and Feed,

(1)

Regulation (EU) 2015/2283 provides that only novel foods authorised and included in the Union list of novel foods may be placed on the market within the Union.

(2)

Pursuant to Article 8 of Regulation (EU) 2015/2283, Commission Implementing Regulation (EU) 2017/2470 (2) has established a Union list of novel foods.

(3)

On 21 February 2020, the company Nemysis Limited (‘the applicant’) submitted an application to the Commission in accordance with Article 10(1) of Regulation (EU) 2015/2283 to place iron hydroxide adipate tartrate (‘IHAT’) on the Union market as a novel food to be used as a source of iron in food supplements as defined in Directive 2002/46/EC of the European Parliament and of the Council (3), in the form of capsules, at levels up to 100 mg/day that would correspond to up to 36 mg iron (Fe) per day, intended for the general population excluding infants and young children. In the application, the applicant indicated that IHAT as engineered nanomaterial is a novel food within the meaning of Article 3(2)(a)(viii) of Regulation (EU) 2015/2283.

(4)

On 21 February 2020, the applicant also made a request to the Commission for the protection of proprietary data for an in vitro mammalian cell micronucleus test (4), an in vitro mammalian cell gene mutation test using the thymidine kinase gene (5), and a 90-day oral toxicity study in rodents (6), submitted in support of the application.

(5)

On 3 July 2020, the Commission, requested the European Food Safety Authority (‘the Authority’) to carry out an assessment of IHAT as a novel food.

(6)

On 27 October 2021, the Authority adopted its scientific opinion on the ‘Safety of Iron Hydroxide Adipate Tartrate as a Novel food pursuant to Regulation (EU) 2015/2283 and as a source of iron in the context of Directive 2002/46/EC’ (7) in accordance with Article 11 of Regulation (EU) 2015/2283.

(7)

In its scientific opinion, the Authority concluded that IHAT is safe under the proposed conditions of use for the proposed target populations at levels not exceeding 100 mg/day and that it is a source from which iron is bioavailable. In that opinion however, the Authority noted that, since it had not set a tolerable Upper intake Limit (‘UL’), the intake of iron from food supplements containing the novel food could exceed population guidance levels that have been set by Member States, and that the combined intake of iron from food supplements containing the novel food and the background diet would be high. In light of the Authority’s considerations and of the pivotal role of iron in human physiology, growth and development, particularly in the early stages of life, and the rather fine line between beneficial and adverse health effects of iron depending on intakes, the Commission considers that a precautionary approach is needed.

(8)

The Commission therefore requested the applicant to reconsider the levels of IHAT proposed in their application (levels up to 100 mg/day that would correspond to up to 36 mg iron (Fe) per day for the general population, excluding infants and young children). In response to the Commission’s request, the applicant modified its request and proposed the use of IHAT at levels not exceeding 100 mg/day and limiting the corresponding iron levels to up to 30 mg Fe/day in food supplements intended for the adult population, and at levels not exceeding 50 mg IHAT/day and limiting the corresponding iron levels to up to 14 mg Fe/day in food supplements intended for children and adolescents under 18 years of age, excluding children under 4 years of age. In addition, the applicant indicated that it will adjust the levels of IHAT in food supplements placed on the market of a Member State to limit the corresponding maximum levels of iron to the guidance values set by that Member State for each age group of the population. The Commission considers that the revised uses would fulfil the conditions for the placing on the market of IHAT in accordance with Article 12(1) of Regulation (EU) 2015/2283.

(9)

It is appropriate that the inclusion of IHAT as a novel food in the Union list of novel foods contains the information referred to in Article 9(3) of Regulation (EU) 2015/2283.

(10)

In the same scientific opinion, the Authority considered that, due to the presence of nickel in the novel food, the consumption of food supplements containing 100 mg of IHAT may elicit dermatitis related allergic reactions to persons of 10 years of age and younger that have been previously sensitised to nickel following skin contact as the intake of nickel from the novel food would not result in a Margin of Exposure (‘MoE’) for the intake of nickel deemed by the Authority to be of low health concern for children and adolescents under 18 years of age in the upper 95th percentile of dietary nickel exposure (8). However, in light of the modified proposed uses of the novel food at levels not exceeding 50 mg IHAT/day in food supplements intended for children and adolescents under 18 years of age and excluding children under 4 years of age, the intake of nickel from the novel food will be either above or close to the MoE considered by the Authority to be of low health concern, and will not contribute significantly in the overall intake of nickel from food and drinking water. Taking into account these considerations and the built-in conservativism in the Authority’s intake assessment that used the 95th percentile dietary exposure to derive the nickel MoE of low health concern, the Commission considers that the risk of elicitation of contact dermatitis allergic reactions to that age group of the population is unlikely to manifest in real life situations. Therefore, the Commission considers that no labelling requirement provided for in Article 9(3)(b) of Regulation (EU) 2015/2283 is necessary as to allergenicity.

(11)

In addition, in its scientific opinion, the Authority also considered that its conclusion on the safety of IHAT and the bioavailability of iron is closely linked to the specific physicochemical properties and particle size distribution and agglomeration profile of the novel food that is achieved by the combined effect of the use of the capsular form of the food supplements containing the novel food, and the absence of substances other than the adipate, tartrate and sodium chloride used in the production of IHAT. The Authority therefore considered that the safety profile of the novel food and the bioavailability of the nutrient source may be affected and will have to be assessed on a case by case basis, if other forms of food supplements (e.g. tablets, pastilles, sachets of powders, gummies, syrups, etc.) are used alone or in combination with adipate, tartrate and sodium chloride or with substances other than the adipate, tartrate and sodium chloride or, if other substances are used in the capsular forms of the food supplements. It is therefore appropriate that when other forms of food supplements (e.g. tablets, pastilles, sachets of powders, gummies, syrups, etc.) are used in combination with adipate, tartrate and sodium chloride or in combination with other substances, or if other substances are used in the capsular form food supplements containing the novel food, the particle size distribution and agglomeration state of the novel food should be in accordance with the authorised specifications and that the bioavailability of iron should be in accordance with the bioavailability assessed by the Authority in its scientific opinion.

(12)

In its scientific opinion, the Authority noted that its conclusion on the safety of the novel food was based on scientific data from the in vitro mammalian cell micronucleus test, the in vitro mammalian cell gene mutation test using the thymidine kinase gene, and the 90-day oral toxicity study in rodents, contained in the applicant’s file, without which it could not have assessed the novel food and reached its conclusion.

(13)

The Commission requested the applicant to further clarify the justification provided with regard to its proprietary claim over those studies and to clarify its claim to an exclusive right of reference to them in accordance with Article 26(2)(b) of Regulation (EU) 2015/2283.

(14)

The applicant declared that it held proprietary and exclusive rights of reference to the scientific data from the in vitro mammalian cell micronucleus test, the in vitro mammalian cell gene mutation test using the thymidine kinase gene, and the 90-day oral toxicity study in rodents at the time they submitted the application, and that third parties cannot lawfully access, use or refer to those data.

(15)

The Commission assessed all the information provided by the applicant and considered that they have sufficiently substantiated the fulfilment of the requirements laid down in Article 26(2) of Regulation (EU) 2015/2283. Therefore, the scientific data from the in vitro mammalian cell micronucleus test, the in vitro mammalian cell gene mutation test using the thymidine kinase gene and the 90-day oral toxicity study in rodents should be protected in accordance with Article 27(1) of Regulation (EU) 2015/2283. Accordingly, only the applicant should be authorised to place IHAT on the market within the Union during a period of 5 years from the entry into force of this Regulation.

(16)

However, restricting the authorisation of IHAT and the reference to the scientific data contained in the applicant’s file for the sole use by them does not prevent subsequent applicants from applying for an authorisation to place on the market the same novel food provided that their application is based on legally obtained information supporting such an authorisation.

(17)

IHAT is an engineered nanomaterial as defined in Article 3(2)(f) of Regulation (EU) 2015/2283. It is therefore appropriate that the novel food should be clearly indicated in the list of ingredients of the foodstuffs containing it followed by the word ‘nano’ in brackets, in accordance with Article 18 of Regulation (EU) No 1169/2011 of the European Parliament and of the Council (9).

(18)

IHAT should be included in the Union list of novel foods set out in Implementing Regulation (EU) 2017/2470. The Annex to Implementing Regulation (EU) 2017/2470 should therefore be amended accordingly.

(19)

The measures provided for in this Regulation are in accordance with the opinion of the Standing Committee on Plants, Animals, Food and Feed,

(1)

Regulation (EC) No 1831/2003 provides for the authorisation of additives for use in animal nutrition and for the grounds and procedures for granting and renewing such authorisation.

(2)

Potassium diformate was authorised for a period of 10 years as a feed additive for all animal species by Commission Implementing Regulation (EU) No 333/2012 (2).

(3)

In accordance with Article 14(1) of Regulation (EC) No 1831/2003, an application was submitted for the renewal of the authorisation of potassium diformate as a feed additive for all animal species, requesting the additive to be classified in the additive category ‘technological additives’. That application was accompanied by the particulars and documents required under Article 14(2) of that Regulation. The applicant has later withdrawn the application for all animal species except for weaned piglets, pigs for fattening and sows.

(4)

The European Food Safety Authority (‘the Authority’) concluded in its opinion of 27 January 2022 (3) that the applicant had provided evidence that the additive complies with the conditions of authorisation. The Authority further concluded that potassium diformate does not have adverse effects on animal health, consumer safety or the environment. It also concluded that the additive is an eye irritant, but it could not conclude on the potential of the additive to be an irritant to the skin or a respiratory or skin sensitiser. Therefore, the Commission considers that appropriate protective measures should be taken to prevent adverse effects on human health, in particular as regards the users of the additive. The Authority also verified the report on the methods of analysis of the feed additive in feed submitted by the Reference Laboratory set up by Regulation (EC) No 1831/2003.

(5)

The assessment of potassium diformate shows that the conditions for authorisation, as provided for in Article 5 of Regulation (EC) No 1831/2003, are satisfied. Accordingly, the authorisation of that additive should be renewed.

(6)

As a consequence of the renewal of the authorisation of potassium diformate as a feed additive, Implementing Regulation (EU) No 333/2012 should be repealed.

(7)

The measures provided for in this Regulation are in accordance with the opinion of the Standing Committee on Plants, Animals, Food and Feed,

(1)

Regulation (EC) No 1831/2003 provides for the authorisation of additives for use in animal nutrition and for the grounds and procedures for granting or denying such authorisation. Article 10 of that Regulation provides for the re-evaluation of additives authorised pursuant to Council Directive 70/524/EEC (2).

(2)

Ethoxyquin was authorised without a time limit by Directive 70/524/EEC as a feed additive for use for all animal species. The additive was subsequently entered in the Register of feed additives as an existing product, in accordance with Article 10(1) of Regulation (EC) No 1831/2003.

(3)

In accordance with Article 10(2) of Regulation (EC) No 1831/2003 in conjunction with Article 7 thereof, an application was submitted for the re-evaluation of ethoxyquin as a feed additive for all animal species, requesting the additive to be classified in the category ‘technological additives’. That application was accompanied by the particulars and documents required under Article 7(3) of Regulation (EC) No 1831/2003.

(4)

The European Food Safety Authority (‘the Authority’) noted in its opinion of 21 October 2015 (3) that it could not conclude on the efficacy and safety of the additive ethoxyquin for animals, consumers and the environment, due to an overall lack of data submitted by the applicant. In particular, no conclusion was possible on the absence of genotoxicity of the metabolite ethoxyquin quinone imine and concerns were raised as to the possible mutagenicity of the impurity p-phenetidine. Consequently, it had not been established that the additive ethoxyquin does not have an adverse effect on animal health, human health and the environment. Therefore, the existing authorisation of the additive ethoxyquin was suspended by Commission Implementing Regulation (EU) 2017/962 (4).

(5)

The authorisation of the additive ethoxyquin was suspended pending the submission and assessment of supplementary data to be produced by the applicant, in accordance with a time schedule listing the necessary studies to be carried out. According to that time schedule, the outcome of the last of those studies had to be available by July 2018.

(6)

In accordance with Implementing Regulation (EU) 2017/962, the suspension measure is to be reviewed by 31 December 2022 and in any event after the adoption by the Authority of a non-favourable opinion on the safety and efficacy of the additive ethoxyquin.

(7)

Since the adoption of the Authority’s opinion of 21 October 2015, the applicant submitted to the Commission successive packages of supplementary data on 11 March 2016, 15 December 2017, 20 April 2018 and 23 June 2021, which were forwarded to the Authority. Further supplementary data was submitted by the applicant to the Authority in the course of the data assessment, as well as on 24 September 2020.

(8)

On 27 January 2022, the Authority adopted an opinion (5) following the assessment of the supplementary data submitted by the applicant, taking into account in particular the modified specifications of the additive ethoxyquin, in which the content of the impurity p-phenetidine was reduced to a level lower than 2,5 ppm, and considering the proposed inclusion level of 50 mg of the additive per kg in complete feed. In its opinion, the Authority could not conclude on the safety of the additive ethoxyquin at any level for long-living and reproductive animals, considering that the additive contains p-phenetidine, a recognised possible mutagen which remains as an impurity in the additive, but in regards to which the applicant did not provide additional information addressing this safety concern. Concerning the safety of the use of ethoxyquin for the consumers, no conclusion could be drawn due to the presence of p-phenetidine and in the absence of data on the residues of p-phenetidine in tissues and products of animal origin. In addition, in the absence of residue data in milk, the Authority could not conclude on the consumers’ safety of ethoxyquin, when used in feed for milk-producing animals. With regard to the safety for the user, the Authority concluded that users’ exposure should be minimised in order to reduce the risk of exposure to p-phenetidine by inhalation. Regarding the safety for the environment, the Authority stated that supplementary data would be needed to conclude on the safety of ethoxyquin for the terrestrial compartment when fed to terrestrial animals. In addition, the Authority considered that a risk for the aquatic compartment could not be excluded when the additive is used in terrestrial animals and that a risk of secondary poisoning via the aquatic food chain could not be excluded either. Furthermore, the Authority concluded that a risk could not be excluded for ethoxyquin used in sea-cages for marine sediment-dwelling organisms.

(9)

The Authority’s opinion of 27 January 2022 shows, therefore, that it has not been established that ethoxyquin does not have an adverse effect on animal health, human health or the environment, when used as a feed additive in the functional group ‘antioxidants’.

(10)

The assessment of ethoxyquin thus shows that the conditions for authorisation, as provided for in Article 5 of Regulation (EC) No 1831/2003, are not satisfied and accordingly, the authorisation of ethoxyquin as a feed additive belonging to the functional group ‘antioxidants’ should be denied.

(11)

It derives from the above review that Implementing Regulation (EU) 2017/962 should be repealed.

(12)

The measures provided for in this Regulation are in accordance with the opinion of the Standing Committee on Plants, Animals, Food and Feed,

(1)

On 24 September 2021, the Danish Competition and Consumer Authority (DCCA) (‘the applicant’) submitted a request to the Commission pursuant to Article 35(1) of Directive 2014/25/EU (‘the request’). The request complies with Article 1(1) of Commission Implementing Decision (EU) 2016/1804 (2).

(2)

The request concerns electricity generation and wholesale from conventional and renewable sources in Denmark.

(3)

However, the request does not cover the following:

(4)

Electricity generation and wholesale from conventional and renewable sources constitutes an activity relating to the supply of electricity in accordance with Article 9 of Directive 2014/25/EU.

(5)

In accordance with point 1(a) of Annex IV to Directive 2014/25/EU, given that free access to the market can be presumed on the basis of the first subparagraph of Article 34(3) of that Directive, the Commission is to adopt an Implementing Decision on the request within 90 working days.

(6)

Pursuant to the fourth subparagraph of paragraph 1 to Annex IV of Directive 2014/25/EU, the deadline may be extended by the Commission with the agreement of those having requested the exemption. Given that additional information was provided by the DCCA on 4 March 2022, the period available to the Commission for deciding on this request is hereby set to 31 July 2022.

(7)

Directive 2014/25/EU applies to the award of contracts for the pursuit of activities related to the supply of electricity to fixed networks intended to provide a service to the public in connection with the production, transport or distribution of electricity, unless the activity is exempted pursuant to Article 34 of that Directive.

(8)

Pursuant to Article 34 of Directive 2014/25/EU, contracts intended to enable the performance of an activity to which that Directive applies are not to be subject to that Directive if, in the Member State in which it is carried out, the activity is directly exposed to competition on markets to which access is not restricted. Direct exposure to competition is assessed on the basis of objective criteria, taking account of the specific characteristics of the sector concerned (3). This assessment is, however, limited by the short deadlines applicable and by the need to rely on the information available to the Commission, which cannot be supplemented by more time-consuming methods, including, in particular, public inquiries addressed to the economic operators concerned (4). In that context, while the question of whether an activity is directly exposed to competition is to be decided on the basis of criteria that are in conformity with the TFEU provisions on competition, it is not required that those criteria should be exactly the same as those referred to in the provisions of EU competition law (5).

(9)

Access is deemed to be unrestricted if the Member State has implemented and applied the relevant Union legislation opening a given sector or a part of it to competition. That legislation is listed in Annex III to Directive 2014/25/EU. For electricity generation and wholesale, that Annex refers to Directive 2009/72/EC, repealed by Directive (EU) 2019/944 (6) with effect from 1 January 2021. According to the applicant, Denmark has transposed Directive (EU) 2019/944 (7). Consequently, pursuant to Article 34(3) of Directive 2014/25/EU, free access to the market can be presumed.

(10)

Direct exposure to competition should be evaluated on the basis of various indicators, none of which is necessarily on its own decisive. In respect of the market concerned by this Decision, market shares constitute one criterion which should be taken into account, along with other criteria, such as the competitive pressure exerted by generators from neighbouring countries or the number of bidders in tenders for renewable energy capacity.

(11)

The aim of this Decision is to establish whether the services concerned by the request are exposed to a level of competition (in markets to which access is not restricted within the meaning of Article 34 of Directive 2014/25/EU) sufficient to ensure that, also in the absence of the discipline brought about by the detailed procurement rules set out in Directive 2014/25/EU, procurement for the pursuit of the activities concerned will be carried out in a transparent, non-discriminatory manner, based on criteria allowing purchasers to identify the solution which overall is the economically most advantageous one.

(12)

This Decision is based on the legal and factual situation as of September 2021, as apparent from the information submitted by the applicant and publicly available information.

(13)

Access to a market is deemed to be unrestricted if the Member State concerned has implemented and applied the relevant Union legislation opening a given sector or a part of it to competition. Denmark has transposed Directive (EU) 2019/944 through 29 national measures, according to the applicant. This was confirmed by the Danish Energy Agency (8). Therefore, the Commission considers that the conditions for free market access de jure are met.

(14)

As far as free access de facto is concerned, the Commission notes the progress of liberalisation of the Danish electricity generation market since its opening up to competition in 1999. The participation of Denmark in the Nord pool power exchange and the development of interconnection capacities have played a significant role in fostering competitive pressure. Concerning generation from renewable sources, in particular offshore wind farms, tenders organised by the Danish authorities have attracted an increasing number of participants.

(15)

The Commission concludes that access to the market is be considered de jure and de facto free on the territory of Denmark for the purposes of this Decision.

(16)

According to Commission merger practice (9), the following relevant product markets could be distinguished in the electricity sector: (i) generation and wholesale supply; (ii) transmission; (iii) distribution; and (iv) retail supply. While some of these markets may be further subdivided, to date previous Commission practice (10) rejected a distinction between an electricity generation market and a wholesale supply market since generation as such is only a first step in the value chain, but electricity volumes generated are marketed via the wholesale market. This has been confirmed for the Nordics more specifically (11).

(17)

In its merger practice, the Commission has, moreover, considered that the relevant product market in the Nordic region covered electricity sold both by means of bilateral contracts and on the Nord Pool platform, both on Elspot (day-ahead) and Elbas (intra-day) (12).

(18)

The applicant argues that corporate Power Purchase Agreements (cPPAs) should be included in the scope of the relevant market. Such agreements are bilateral contracts between an electricity generator and a customer (usually a large electricity user) by which the user purchases electricity directly from the generator. Trading companies enter into Power Purchase Agreements (PPAs) with producers of both conventional and renewable power, competing for the conclusion of PPAs.

(19)

As for other bilateral transactions, customers entering into PPAs must enter into an agreement with a balance responsible party to manage their imbalances. Concerning balancing of generation/production, power generators (such as owners of offshore windfarms) have to match their forecasted electricity production in real time, i.e. adapting the forecasted production with the actual production. This responsibility is not affected by how the generator chooses to sell the electricity produced, including by cPPAs.

(20)

With regard to whether conventional and renewable electricity belong to the same product market, the Commission has come to different conclusions depending on the factual situation. It found that conventional and renewable electricity generation in Germany (13) and Italy (14) should be considered as different product markets.

(21)

However, in the case of the Netherlands (15), the Commission found that generation and wholesale supply of electricity from conventional and renewable sources was part of the same relevant product market. For the Nordic region, the Commission has in its merger practice considered the source of the electricity to be irrelevant for product definition purposes (16).

(22)

The applicant argues that the situation in Denmark differs from that in Germany and Italy referred to in the above decision, and is similar to that at issue in the Netherlands. The applicant provided tables detailing the similarities and differences between the Danish and, respectively, German, Italian and Dutch cases. The applicant points out that the main differences with the German and Italian situations are the absence of statutory rate of remuneration, the absence of feed-in priority and the fact that renewable electricity is sold on the wholesale market at the same price as conventional electricity.

(23)

In its merger decision Fortum/Uniper (17), the Commission recalled that the relevant product market in the Nordic region covered both generation and wholesale of electricity, irrespective of generation sources and trading channels, and that it comprised electricity sold by means of bilateral contracts and on the Nordic power exchange, Nord Pool.

(24)

Concerning electricity produced from renewable sources, the request covers the Horns Rev 3, Vesterhav Syd, Vesterhav Nord and Kriegers Flask offshore windfarms, as well as the wind farms to come, including the Thor offshore windfarm. All of the concerned support schemes were subject to Commission decisions confirming their compatibility with EU State aid rules (18).

(25)

Moreover, the premiums paid out for wind production have decreased to a minimum thanks to increased competition for generation. For all of the abovementioned windfarms, the Danish Energy Agency organised an open tender for generation of electricity from renewable sources. The Horns Rev 3 (400 MW), held in 2015, had four bidders, the Kriegers Flak (600 MW), held in 2016, seven and the Vesterhav Nord/Sud (350 MW), held in 2016, three.

(26)

Risk hedging is being carried out prior to the tendering procedures, and the Danish authorities now have a better understanding of the market and have established a real market dialogue.

(27)

The total costs of renewable technologies such as offshore wind turbines or solar photovoltaic have also significantly declined. Consequently, the winning bid in 2010 for Anholt Offshore Wind Farm was a premium of 105 øre/kWh while the winning bid in 2016 for Kriegers Flak Offshore Wind Farm was a premium of 37 øre/kWh.

(28)

Denmark also intends to launch three new large-scale offshore windfarms. The first offshore wind farm shall have a capacity of approximately 800 MW, while the remaining offshore wind farms shall have a capacity of at least 800 MW. The Danish Energy Agency will call for bids in tender schemes for each future offshore windfarm.

(29)

As it did in its exemption Commission Implementing Decision (EU) 2018/71 (19) concerning electricity generation and wholesale in the Netherlands, the Commission notes that the allocation of the subsidies is exposed to competition through a bidding process which disciplines the behaviour of renewable electricity producers with regard to their procurement policy. This places conventional and renewable (for those offshore windfarms subject to the request) electricity generation on an equal footing in Denmark.

(30)

For the purposes of evaluating the conditions laid down in Article 34(1) of Directive 2014/25/EU and without prejudice to the application of competition law, the Commission considers that the relevant product market is the market for generation and wholesale supply of electricity, including cPPAs, produced from conventional as well as from offshore wind farms that are subject to the application for exemption.

(31)

In 2006, the Commission has in a merger decision defined (20) two separate geographic markets for electricity wholesale: that of East Denmark (‘DK2’) and that of West Denmark (‘DK1’), as at the time there was no direct interconnection between the two Danish bidding (or price) areas. The Commission reached the same conclusion in the DE/DK Interconnector decision in 2018 (21).

(32)

In 2014, the Danish Competition Council investigated the market for generation and wholesale of electricity in Denmark in its Virtual Power Plant (‘VPP’) decision (22). By that decision, the Danish Competition Council repealed previous commitments entered into by Elsam A/S in a merger between Elsam A/S and Nesa A/S in 2004. The Danish Competition Council partly supported a larger geographical market than DK1. DK1 is connected to Norway, Sweden and Germany through transmission connections. The wholesale price for physical electricity in DK1 was different from all of the connected price zones in less than 10 % of the hours during 2013. In most hours, DK1 had a wholesale price equal to at least one of the connected price zones, which supported a wider geographical market than Western Denmark. However, it was left open, whether there was a wider geographical market than Western Denmark. In 2019, the Danish Competition Council (23) indicated that the market for generation and wholesale of electricity was national in scope, but left the question open of whether to define either a broader or a narrower geographical market definition. This conclusion was based on the following precedent cases: 1) the M.8660 Fortum/Uniper decision in which the Commission concluded on the existence of a national market in Sweden, 2) the M.3268 Sydkraft and Graninge decision in which the Commission found that Sweden only constituted a separate market from Finland and Denmark in an insignificant number of hours, which indicated that the wholesale market for electricity was broader than national in scope, and 3) the Danish Competition Council’s VPP decision in which it found indications of a larger geographical market than DK1 due to developments within the market for generation and wholesale of electricity in Denmark. Interconnection capacity between Denmark and neighbouring countries has been significantly expanded since 2006. Notably, the Skagerrak (with Norway), Kontiskan (with Sweden) and Kontek (with Germany) interconnectors have been put in service or expanded. The Cobra cable (with the Netherlands) was commissioned in 2019. Within Denmark, the Great Belt now connects Western and Eastern Denmark.

(33)

Evidence provided by the applicant (24) shows increasing price correlation between Eastern and Western Denmark, as well as with neighbouring price zones of Sweden, Norway and Germany (SE3, SE4, NO2 and DE). For instance, DK1 had the same price as one of the other areas (DK2, SE3, SE4, NO2 and DE) for 91,7 % in 2013 and 96,3 % in 2018; for DK2, the figures were 97,8 % in 2013 and 98,6 % in 2018. Conversely, the hours during which the DK1 area had a different price from the other areas dropped from 8,3 % to 3,7 % from 2013 to 2018; for DK2, the percentage dropped from 2,2 % to 1,4 %.

(34)

According to Energinet, Denmark has a very large capacity on the interconnectors to its neighbouring countries, equalling approximately 90 % of its domestic peak demand. The close integration with Denmark’s neighbouring countries implies that Denmark only has a separate spot market price for electricity during approximately 10 % of the time. In the remaining time, the wholesale price is common with either Norway, Sweden or Germany.

(35)

In 2019, the international connection between Eastern Denmark (DK2) and Germany has an available trading capacity of 90 % of the total capacity of the interconnector in the export direction, and of 95 % in the import direction. The remaining foreign connections had an available trading capacity in the export direction of between 60 and 88 % of the total capacity of the interconnector. Trading capacity was lower between Western Denmark (DK1) and Norway and Sweden in 2019 compared to 2018. On the other hand, trading capacity against Germany was higher for both Danish bidding areas. The Cobra connection has had an available trading capacity in the export and import direction of 87 % of the total capacity of the interconnector in 2019.

(36)

The Commission observes the existence of pricing constraints on both zones from the outside: DK1 has the same prices as other areas 89,3 % of hours, and DK2 for 98,4 % of the hours. For reference, in paragraph 28 of the Fortum/Uniper merger decision, the Commission concluded that the four Swedish bidding zones formed a single geographic market because they had a common price for 89,7 % of hours. The Commission also notes that, according to the applicant, the four largest players with market shares higher than 10 % are present in both DK1 and DK2.

(37)

For the purposes of evaluating the conditions laid down in Article 34(1) of Directive 2014/25/EU and without prejudice to the application of competition law, the Commission considers that the relevant geographic market for generation and wholesale supply of electricity, including cPPAs, produced from conventional as well as from those renewable sources that are subject to the application can be left open, either in the case of a separate market for DK1 and DK2 or in the case of a single national Danish market.

(38)

All market shares calculations and indications related to the share of electricity generation are based on input from the applicant.

(39)

In its analysis, the Commission takes account of several factors. While market shares are an important aspect, the competitive pressure exerted by generators from neighbouring countries and the number of bidders in tenders for renewable energy capacity are also taken into account.

(40)

On the electricity generation and wholesale market in Denmark, there are at present three main market players subject to public procurement rules pursuant to Directive 2014/25/EU. They are Ørsted A/S (hereinafter Ørsted) (50,1 % owned by the Danish state), the Danish subsidiary of Vattenfall, Vattenfall AB) (hereinafter Vattenfall) (100 % owned by the Swedish state) and HOFOR Energiproduktion A/S (hereinafter HOFOR), ultimately owned by the municipality of Copenhagen.

(41)

There are currently 18 Danish companies trading on Nord Pool. A majority of these companies, such as Danske Commodities and Centrica Energy Trading, are not public undertakings according to Directive 2014/25/EU.

(42)

In 2018 and 2019, Ørsted’s market share on the combined market DK1-DK2 (in terms of generation) was [20 to 30]% and [10 to 20]% respectively, Vattenfall’s market share was [5 to 10]% and [10 to 20]% and HOFOR’s market share was [0 to 5]% and [0 to 5]%. The larger competitors of these companies, which are not covered by public procurement rules, are Vindenergi Danmark ([40 to 50]% and [40 to 50]% market shares) and Energi Danmark ([10 to 20]% and [10 to 20]%). The market shares on the DK1 and DK2 markets were broadly in the same range (Ørsted [20 to 30]% in DK1 and [10 to 20] % in DK2 in 2018, [20 to 30]% in DK1 and [10 to 20]% in DK2 in 2019, Vattenfall [5 to 10]% in DK1 and [0 to 5]% in DK2 in 2018, [10 to 20]% in DK1 and [0 to 5]% in DK2 in 2019, HOFOR [0 to 5]% in DK1 and [5 to 10]% in DK2 in 2019). If the relevant geographic market is wider than Denmark, these market shares would be smaller.

(43)

Imports and exports are a very significant feature of the Danish electricity market. In 2018 and 2019, electricity consumption stood at around 33,5 TWh. Imports represented approximately 45,6 % of total consumption in 2018, while national production covered 41 % of the consumption in 2018 and 48 % in 2019. Exports are also significant, as they stood at 73 % and 62 % of Danish electricity production in 2018 and 2019.

(44)

This shows the magnitude of the integration of the Danish electricity market into a wider geographic market and, as a result, the competitive pressure exerted by electricity generators from, most importantly but not exclusively, neighbouring countries on Danish producers via cross-borders interconnectors.

(45)

Concerning wholesale spot prices, Nordic prices are set on the Nord Pool exchange. The average hourly price in the spot market for DK1 and DK2 was respectively 38,50 and 39,84 EUR MWh in 2019, which is a decrease of 13 % in both areas from 2018. The system price was 38,94 EUR/MWh in 2019. The price of the Nordic system is the fictitious spot price that would have occurred if the whole Nordic region was one bidding area. DK1 generally has lower prices than DK2 due to the relatively large installed wind turbine capacity in DK1, which helps push prices down. The average spot price in 2019 was 39,28 EUR/MWh in Norway, 37,68 EUR/MWh in Germany and 38,79 EUR/MWh in Sweden, very similar to the price in DK1 and DK2.

(46)

In Denmark, approximately 6 percent of electricity is traded in the single European intra-day market Xbid. The intraday market is based on continuous trading with trades made pay-as-bid as opposed to the day ahead market, which is auction-based with a single clearing price. The intraday market is used to adjust consumption and production plans with regard to i.a. restoring portfolio balances. This means that the price in the intraday market for each hour will start at the spot price and then move up or down if there are unforeseen events during the trading window. The annual average price for the intraday market in DK1 was 35,1 EUR/MWh in 2019. In DK2, it was 36,7 EUR/MWh. In 2018, the average price in DK1 was 40,4 EUR/MWh and 41,9 EUR/MWh in DK2.

(47)

Further calculations included in the application (25) show that prices in DK1 and DK2 are the same as one or more neighbouring price zones a vast majority of the time. In 2018 and 2019, prices in DK1 were the same as in another pricing area of the region (DK2, SE3, SE4, NO2 and DE) 94,8 % and 96,3 % of the time; prices in DK2 were the same as in another pricing area of the region (DK1, SE3, SE4, NO2 and DE) 98,8 % and 98,6 % of the time. In addition, the correlation between the two Danish zones and the Nordic system and German wholesale price is rather high, ranging between 64 % and 83 % over the 2017-2018 period.

(48)

Denmark has a very large capacity on the interconnectors to its neighbouring countries, equalling approximately 90 % of its domestic peak demand. The close integration with Denmark’s neighbouring countries implies that Denmark only has a separate spot market price for electricity in DK1 and DK2 in approximately 10 % of the time. In the remaining time, the wholesale price in DK1 and DK2 is common with either Norway, Sweden or Germany.

(49)

The Commission considers that these elements show a very strong convergence of electricity prices in Denmark with the prices in the countries of the Nordic region and in Germany.

(50)

Contracting entities hold a limited market share on the electricity generation and wholesale market in Denmark subject to the request.

(51)

The high level of electricity imports and exports compared to Danish electricity generation, combined with the interconnection capacity with neighbouring countries, shows that the electricity and wholesale market in Denmark is largely integrated into a wider, transnational market. Even if the geographical market is not necessarily transnational, electricity imports to Denmark in any case exert competitive pressure on the Danish electricity wholesale prices during a significant number of hours each year.

(52)

This is further confirmed by the data provided by the applicant on wholesale prices, which demonstrates that the Danish prices are very similar to Nordpool-wide prices and prices in Germany.

(53)

The aim of the present Decision is to establish whether the activities of generation and wholesale of electricity are exposed to such a level of competition (on markets to which access is free) that this will ensure that, also in the absence of the discipline brought about by the detailed procurement rules set out in Directive 2014/25/EU, the procurement for the pursuit of the activities concerned will be carried out in a transparent, non-discriminatory manner, based on criteria allowing the contracting entity to identify the solution which overall is the economically most advantageous.

(54)

In view of the factors examined above, the Commission can conclude that the activity of electricity generation and wholesale from conventional sources and from offshore wind farms subject to a tendering procedure in Denmark is directly exposed to competition on a market to which access is not restricted, within the meaning of Article 34(1) of Directive 2014/25/EU.

(55)

For the purposes of this Decision and without prejudice to the application of competition law, it follows from recitals 11 to 53 that the generation and wholesale of electricity from conventional sources and from offshore wind farms subject to a tendering procedure in Denmark is exposed to competition on a market to which access is not restricted, within the meaning of Article 34 of the Directive 2014/25/EU. Consequently, Directive 2014/25/EU should not continue to apply to contracts intended to enable the pursuit of that activity in Denmark.

(56)

Directive 2014/25/EU should continue to apply to contracts intended to enable the pursuit of activities which are specifically excluded from the request.

(57)

This Decision is based on the legal and factual situation as of October 2021 to March 2022 as it appears from the information submitted by the applicants. It may be revised, should the conditions for the applicability of Article 34 of Directive 2014/25/EU no longer be met, following significant changes in the legal or factual situation.

(58)

It is recalled that Article 16 of Directive 2014/23/EU (26) provides for an exemption from the application of that Directive for concessions awarded by contracting entities where, for the Member State in which the concessions are to be performed, it has been established pursuant to Article 35 of Directive 2014/25/EU that the activity is directly exposed to competition in accordance with Article 34 of that Directive. Since it was concluded that the activity of production and wholesale of electricity subject to the request is exposed to competition on a market to which access is not restricted, concession contracts intended to enable the performance of those activities in Denmark will be excluded from the field of application of Directive 2014/23/EU.

(59)

The measures provided for in this Decision are in accordance with the opinion of the Advisory Committee for Public Contracts,

(1)

Regulation (EC) No 999/2001 provides that Member States or third countries or regions thereof (countries or regions) are to be classified according to their bovine spongiform encephalopathy (BSE) status into one of three categories: negligible BSE risk, controlled BSE risk and undetermined BSE risk.

(2)

Article 5(2) of Regulation (EC) No 999/2001 provides that if the World Organisation for Animal Health (OIE) has placed an applicant country in one of the three BSE categories, a re-assessment of the BSE categorisation at Union level may be decided.

(3)

Commission Decision 2007/453/EC (2) lists the BSE status of countries or regions according to their BSE risk in Parts A, B or C of the Annex to that act. The countries or regions listed in Part A of that Annex are regarded as having a negligible BSE risk, those listed in Part B are regarded as having a controlled BSE risk, while Part C of that Annex provides that countries or regions not listed in Part A or B are to be regarded as having an undetermined BSE risk.

(4)

France currently falls within Part B of the Annex to Decision 2007/453/EC under countries or regions with a controlled BSE risk.

(5)

On 24 May 2022, the OIE World Assembly of Delegates adopted Resolution No 15, ‘Recognition of the Bovine Spongiform Encephalopathy Risk Status of Members’ (3), in view of an entry into force on 27 May 2022. That Resolution recognised France as having a negligible BSE risk, in accordance with the Terrestrial Animal Health Code of the OIE. After reassessment of the situation at Union level, stemming from OIE Resolution No 15, the Commission has considered that the new OIE BSE status of France should be reflected in the Annex to Decision 2007/453/EC.

(6)

The list of countries or regions in the Annex to Decision 2007/453/EC should therefore be amended so that France is listed in Part A of that Annex under countries or regions with a negligible BSE risk.

(7)

The Annex to Decision 2007/453/EC should therefore be amended accordingly.

(8)

The measures provided for in this Decision are in accordance with the opinion of the Standing Committee on Plants, Animals, Food and Feed,

(1)

Guideline 2008/596/EC of the European Central Bank (ECB/2008/5) (1) governs the management of the foreign reserves of the European Central Bank (ECB) by the national central banks of Member States whose currency is the euro, as well as the legal documentation for operations involving such assets. As a result of the regular review of that Guideline, several amendments to it are required.

(2)

Firstly, where counterparties do not comply with the applicable laws in relation to the prevention of money laundering and/or terrorist financing, and/or are involved in money laundering and/or terrorist financing, the ECB should have the ability to terminate master netting agreements entered into by it with such counterparties from 1 August 2022 or entered into by the ECB before that date and amended after it. This would reflect the current ECB practice as regards the other master agreements used by the ECB. Secondly, counterparties to transactions involving the ECB’s foreign reserve assets should be obliged to observe on a continuing basis any applicable sanctions imposed at European Union and/or United Nations level, or imposed by any other competent authority.

(3)

In addition, several other adjustments of an operational or technical nature need to be made.

(4)

Therefore, Guideline 2008/596/EC (ECB/2008/5) should be amended accordingly,