OPINION OF ADVOCATE GENERAL
RANTOS
delivered on 19 October 2023 (1)
Joined Cases C‑395/22 and C‑428/22
‘Trade Express-L’ OOD (C‑395/22)
‘DEVNIA TSIMENT’ AD (C‑428/22)
v
Zamestnik-predsedatel na Darzhavna agentsia ‘Darzhaven rezerv i voennovremenni zapasi’
(Request for a preliminary ruling from the Administrativen sad – Varna (Administrative Court, Varna, Bulgaria))
(References for a preliminary ruling – Energy – Directive 2009/119/EC – Obligation of Member States to maintain minimum stocks of crude oil and/or petroleum products – Supply of stocks – Regulation (EC) No 1099/2008 – National legislation requiring economic operators to build up emergency stocks – Obligation to build up and maintain stocks of a petroleum product that is not used in or connected with the economic activity of that operator)
I. Introduction
1. Can an economic operator that imports a certain type of petroleum product be required to build up stocks of another type of petroleum product under Article 3 of Directive 2009/119/EC (2)and, if so, what is the scope of that obligation?
2. Those are, in essence, the questions referred to the Court by the Administrativen sad – Varna (Administrative Court, Varna, Bulgaria), which call on the Court to interpret Directive 2009/119 for the first time, (3) in order to determine the scope available to the Member States for implementing their obligation to maintain emergency stocks. More specifically, the two requests for preliminary rulings concern the interpretation, first, of recital 33, Article 1, points (i) and (j) of the first paragraph of Article 2, and Article 3 and Article 8 of Directive 2009/119 (‘the relevant provisions of Directive 2009/119’) and, second, of Article 17 and Article 52(1) of the Charter of Fundamental Rights of the European Union (‘the Charter’).
3. These questions have been referred in proceedings between ‘Trade Express-L’ OOD (‘Trade Express’) (Case C‑395/22), and ‘DEVNIA TSIMENT’ AD (‘Devnia Tsiment’) (Case C‑428/22), on the one hand, and the Zamestnik-predsedatel na Darzhavna agentsia ‘Darzhaven rezerv i voennovremenni zapasi’ (Vice-Chairperson of the National Agency for ‘State Reserves and Military Stocks’, Bulgaria; ‘the Vice-Chairperson of the National Agency’), on the other, concerning the lawfulness of orders issued by the Vice-Chairperson of the National Agency relating to the building up and maintenance by the two companies of emergency stocks of heavy fuel oil.
4. Under Bulgarian regulations, every operator that imports energy products in a given year is required to build up emergency stocks. Those regulations limit the types of products constituting emergency stocks to crude oil and four types of petroleum products. In the present case, the applicants in the main proceedings imported into Bulgaria, respectively, two types of product falling within the classification of ‘OIL (crude oil and petroleum products)’, as defined in Chapter 3.4 of Annex A to Regulation (EC) No 1099/2008, (4) namely petroleum coke and lubricating oils. As a result of those imports, the applicants were subject to an obligation to build up, at their own expense and on their own behalf, for a period of one year, certain quantities of emergency stocks of another petroleum product, namely heavy fuel oil. They are essentially challenging that obligation before the referring court, arguing that they do not carry out any economic activity using heavy fuel oil and that the obligation to build up emergency stock of that product has caused them an unreasonable financial burden that is contrary to the provisions of both Directive 2009/119 and the Charter.
5. It is against that regulatory background, specific to Bulgaria, (5) that the Court will be called upon to assess the powers of the Member States to determine the types of products constituting emergency stocks and the conditions under which they may require economic operators to build up such stocks.
II. Legal context
A. European Union law
1. Directives 68/414, 2006/67 and 2009/119
6. The first rules governing emergency stocks of oil and petroleum products were introduced by Directive 68/414, (6) which was last amended by Council Directive 98/93/EC of 14 December 1998, (7) and then repealed by Directive 2006/67. (8) Directive 2006/67 was in turn repealed by Directive 2009/119. It is this latter directive that is currently in force and applicable ratione temporis in the main proceedings.
7. Recitals 2, 5, 8, 10, 11 and 33 in the preamble to Directive 2009/119 are worded as follows:
‘(2) The increasing concentration of production, dwindling oil reserves and growing worldwide consumption of petroleum products are all contributing to an increased risk of supply difficulties.
…
(5) Under [the 2006 Directive], stocks are calculated on the basis of average daily inland consumption during the previous calendar year. However, stockholding obligations under the Agreement on an International Energy Programme of 18 November 1974 (hereinafter ‘the IEA Agreement’) are calculated on the basis of net imports of oil and petroleum products. For that reason, and owing to other differences in methodology, the way in which stockholding obligations and Community emergency stocks are calculated should be brought more into line with the calculation methods used under the IEA Agreement, …
…
(8) The availability of oil stocks and the safeguarding of energy supply are essential elements of public security for Member States and for the Community. The existence of central stockholding entities (CSEs) in the Community brings those goals closer. …
…
(10) It should be possible for oil stocks to be held at any location across the Community, provided that due account is taken of their physical accessibility. Consequently, economic operators on which such stockholding obligations fall should be able to discharge their obligations by delegation to other economic operators or any one of the CSEs. Furthermore, provided those obligations can be delegated to a freely chosen CSE located within the Community on payment of an amount limited to the cost of the services provided, the risk of discriminatory practices at national level will be reduced. …
(11) Member States should ensure full availability of all stocks held pursuant to Community legislation. In order to guarantee that availability, there should be no restrictions or limitations on the right of ownership of those stocks that could hamper their use in case of oil supply disruption. Petroleum products owned by companies facing a significant risk of enforcement proceedings against their assets should not be taken into account. Where a stockholding obligation has been imposed on operators, initiation of bankruptcy or settlement proceedings could be considered to demonstrate the existence of such a risk.
…
(33) Since the objective of this Directive, namely to maintain a high level of security of oil supply in the Community through reliable and transparent mechanisms based on solidarity amongst Member States while complying with the internal market and competition rules, cannot be sufficiently achieved by the Member States and can therefore, by reason of its scale and effects, be better achieved at Community level, the Community may adopt measures in accordance with the principle of subsidiarity as set out in Article 5 of the [EC] Treaty. …’
8. Article 1 of that directive, entitled ‘Objective’, provides:
‘This Directive lays down rules aimed at ensuring a high level of security of oil supply in the Community through reliable and transparent mechanisms based on solidarity amongst Member States, maintaining minimum stocks of crude oil and/or petroleum products and putting in place the necessary procedural means to deal with a serious shortage.’
9. Points (f), (i), (j) and (l) of the first paragraph of Article 2 of that directive contain the following definitions:
‘(f) “central stockholding entity” (CSE) means the body or service upon which powers may be conferred to act to acquire, maintain or sell oil stocks, including emergency stocks and specific stocks;
…
(i) “oil stocks” means stocks of the energy products listed in Chapter 3.4 of Annex A to [Regulation No 1099/2008];
(j) “emergency stocks” means the oil stocks that each Member State is required to maintain pursuant to Article 3;
…
(l) “specific stocks” means oil stocks that meet the criteria set out in Article 9.’
10. Article 3 of that directive, entitled ‘Emergency stocks – Calculating stockholding obligations’, provides:
‘1. Member States shall adopt such laws, regulations or administrative provisions as may be appropriate in order to ensure, by 31 December 2012, that the total oil stocks maintained at all times within the Community for their benefit correspond, at the very least, to 90 days of average daily net imports or 61 days of average daily inland consumption, whichever of the two quantities is greater.
2. The average daily net imports to be taken into account shall be calculated on the basis of the crude oil equivalent of imports during the previous calendar year, determined in accordance with the method and procedures set out in Annex I.
The average daily inland consumption to be taken into account shall be calculated on the basis of the crude oil equivalent of inland consumption during the previous calendar year, established and calculated in accordance with the method and procedures set out in Annex II.
3. However, notwithstanding paragraph 2, the daily averages of net imports and inland consumption, as referred to in that paragraph, shall be determined, as regards the period from 1 January to 30 June of each calendar year, on the basis of the quantities imported or consumed during the last year but one before the calendar year in question.
4. The methods and procedures for calculating stockholding obligations, as referred to in this Article, may be amended in accordance with the regulatory procedure referred to in Article 23(2).’
11. Article 4 of Directive 2009/119, entitled ‘Calculating stock levels’, states in paragraph 1 that ‘the levels of stocks held shall be calculated using the methods set out in Annex III’.
12. Article 7 of that directive, entitled ‘Central stockholding entities’ provides in paragraphs 1 and 2:
‘1. Member States may set up CSEs. …
2. The main purpose of the CSE shall be to acquire, maintain and sell oil stocks for the purposes of this Directive or for the purpose of complying with international agreements concerning the maintenance of oil stocks. It is the only body or service upon which powers may be conferred to acquire or sell specific stocks.’
13. Article 8 of that directive, entitled ‘Economic operators’, provides:
‘1. Each Member State shall ensure that any economic operator on which it imposes stockholding obligations in order to fulfil its obligations under Article 3 is given the right to delegate those obligations at least in part and at the choice of the economic operator, but only to:
(a) the CSE of the Member State on whose account such stocks are held;
(b) one or more other CSEs which have in advance declared themselves willing to hold such stocks, provided that such delegations have been authorised in advance both by the Member State on whose account such stocks are held and by all Member States within whose territories the stocks will be held;
(c) other economic operators which have surplus stocks or available stockholding capacity outside of the territory of the Member State on whose account the stocks are held within the Community, provided that such delegation has been authorised in advance both by the Member State on whose account such stocks are held and by all Member States within whose territories the stocks will be held; and/or
(d) other economic operators which have surplus stocks or available stockholding capacity within the territory of the Member State on whose account the stocks are held, provided that such delegation has been communicated in advance to the Member State. Member States may impose limits or conditions on such delegations.
Obligations delegated in accordance with points (c) and (d) may not be subdelegated. Any change to or extension of a delegation referred to in points (b) and (c) shall only take effect if authorised in advance by all Member States which authorised the delegation. Any change to or extension of a delegation referred to in point (d) shall be treated as a new delegation.
2. Each Member State may restrict the delegation rights of the economic operators on which it imposes or has imposed stockholding obligations. …
3. Notwithstanding the provisions of paragraphs 1 and 2, a Member State may impose an obligation on an economic operator to delegate at least part of its stockholding obligation to the CSE of the Member State.
4. Member States shall take the necessary measures to inform economic operators of the modalities to be used to calculate the stockholding obligations imposed on them no later than 200 days prior to the start of the period to which the obligation in question relates. Economic operators shall exercise their right to delegate stockholding obligations to CSEs no later than 170 days prior to the start of the period to which the obligation in question relates. …’
14. Article 9 of that directive, entitled ‘Specific stocks’, provides, in paragraphs 1 and 5:
‘1. Each Member State may undertake to maintain a minimum level of oil stocks, calculated in terms of number of days of consumption, in accordance with the conditions set out in this Article. …
…
5. Each Member State that has not made a commitment for the full length of a given calendar year to maintain at least 30 days of specific stocks shall ensure that at least one-third of their stockholding obligation is held in the form of products composed in accordance with paragraphs 2 and 3. …’
15. Annex III to Directive 2009/119 determines the ‘methods for calculating the level of stocks held’. The third and fifth to seventh paragraphs of that annex are worded as follows:
‘Crude oil stocks are reduced by 4%, which corresponds to the average naphtha yield.
…
Other petroleum products are included in the stock count using one of the two methods set out below. Member States must continue to use the method they have chosen throughout the whole calendar year in question.
Member States may:
(a) include all other stocks of the petroleum products identified in Chapter 3.4 of Annex A to [Regulation No 1099/2008] and calculate the crude oil equivalent by multiplying the quantities by a factor of 1,065; or
(b) include stocks of only the following products: motor gasoline, aviation gasoline, gasoline-type jet fuel (naphtha-type jet fuel or JP4), kerosene-type jet fuel, other kerosene, gas/diesel oil (distillate fuel oil) and fuel oil (high sulphur content and low sulphur content) and calculate the crude oil equivalent by multiplying the quantities by a factor of 1,2.
The calculation may include quantities held:
– in refinery tanks,
– in bulk terminals,
– in pipeline tankage,
– in barges,
– in intercoastal tankers,
– in oil tankers in port,
– in inland ship bunkers,
– in storage tank bottoms,
– as working stocks,
– by large consumers as required by law or otherwise controlled by governments.
…’
2. Regulation No 1099/2008
16. Article 2(d) of Regulation No 1099/2008 defines the concept of ‘energy products’, for the purposes of that regulation, as ‘combustible fuels, heat, renewable energy, electricity, or any other form of energy’.
17. Annex A to that regulation provides ‘clarifications of terminology’. Chapter 3.4 of that annex determines the concept of ‘OIL (Crude oil and petroleum products)’.
18. In point 3.4.20 of that annex, the concept of ‘Lubricants’ is defined as follows:
‘Hydrocarbons produced from distillate by-product. They are mainly used to reduce friction between bearing surfaces. Includes all finished grades of lubricating oil, from spindle oil to cylinder oil, and those used in greases, motor oils and all grades of lubricating oil base stocks.’
19. Point 3.4.23 of the same annex provides the following definition of the notion of ‘petroleum coke’:
‘Black solid by-product, obtained mainly by cracking and carbonising petroleum derived feedstock, vacuum bottoms, tar and pitches in processes such as delayed coking or fluid coking. It consists mainly of carbon (90-95%) and has a low ash content. It is used as a feedstock in coke ovens for the steel industry, for heating purposes, for electrode manufacture and for the production of chemicals. The two most important qualities are “green coke” and “calcinated coke”. Includes “catalyst coke” deposited on the catalyst during refining processes; this coke is not recoverable and is usually burned as refinery fuel.’
B. Bulgarian law
20. The Zakon za zapasite ot neft i neftoprodukti (Law on stocks of oil and petroleum products) of 15 February 2013 (9) (‘the ZZNN’), which transposed Directive 2009/119 into Bulgarian law, states in Article 1(1) that ‘the [ZZNN] regulates the building up, maintenance, renewal, use and replenishment of emergency oil stocks and specific stocks of petroleum products, and puts in place the necessary procedural means to remedy a serious shortage’.
21. In accordance with Article 2(1) and (4) of the ZZNN:
‘(1) Under this law, emergency stocks of oil and of the categories of petroleum products listed below- shall be built up, maintained, updated, used, replenished and monitored: 1. automotive gasoline; 2. diesel, kerosene-type jet fuel and fuel for diesel engines; 3. heavy fuel oil; 4. propane-butane gas.
…
This law applies to the energy products referred to in Chapter 3.4 of Annex A to [Regulation No 1099/2008], and to heavy fuels, unless they are delivered within the national territory in industrial packaging with a net weight of up to 1 kg.’
22. Article 3(4) of the ZZNN provides:
‘Parties subject to this obligation shall themselves organise and finance, on their own behalf and by their own means, the building up, maintenance, renewal and replenishment of the levels of emergency stocks that they are ordered to guarantee.’
23. Article 21(1) and (11) of the ZZNN reads as follows:
‘(1) Emergency stocks may be maintained in the form of oil and/or petroleum products as listed in Article 2(1).
…
(11) Levels of emergency stocks in the form of heavy fuel oil, determined on the basis of net imports and intra-Community receipts or average daily consumption, may be built up and maintained, up to 100%, in the form of gas oil, automotive gasoline and/or diesel engine fuel, and the quantity must be equal to the quantity of heavy fuel oil stock for which substitution is requested.’
III. The disputes in the main proceedings, the questions referred for a preliminary ruling and the procedure before the Court
24. Trade Express, the applicant in the main proceedings giving rise to Case C‑395/22 declared intra-Community acquisitions in Bulgaria of 89.6 tonnes of lubricating oils during the year 2020. Those lubricating oils, which fall under point 3.4.20 of Chapter 3.4 of Annex A to Regulation No 1099/2008, were intended for sale. During that same year, Trade Express did not carry out any other economic activity involving other types of products listed in that annex.
25. Devnia Tsiment, the applicant in the main proceedings giving rise to Case C‑428/22, declared that it had imported 34 657.39 tonnes of petroleum coke into Bulgaria in 2020. That petroleum coke, which falls under point 3.4.23 of Chapter 3.4 of Annex A to Regulation No 1099/2008, is used in a mineralogical process for the production of non-pulverised cements known as ‘clinkers’. During that same year, Devnia Tsiment did not carry out any other economic activity involving other types of products listed in that annex.
26. As a result of those activities, by two orders of 28 and 29 April 2021 (together ‘the contested orders’), the Vice-Chairperson of the National Agency ordered Devnia Tsiment and Trade Express respectively to build up and maintain emergency stocks of heavy fuel oil, on their own behalf and by their own means, for the period from 1 July 2021 to 30 June 2022. Devnia Tsiment was ordered to build up and maintain a stock of 7 806.058 tonnes, while Trade Express was ordered to build up and maintain a stock of 15.947 tonnes.
27. Each of those companies brought an action before the Administrativen sad – Varna (Administrative Court, Varna), the referring court in the present actions, requesting that the order issued against it be set aside. They are both challenging the legality of the orders at issue, claiming, in essence, that the national legislation is incompatible with Directive 2009/119 in so far as it imposes an obligation on economic operators to build up emergency stocks of petroleum products other than those that are part their economic activities. (10)
28. That court notes that Devnia Tsiment and Trade Express did not undertake in 2020 – and still do not currently carry out – any economic activity using the types of products listed in Chapter 3.4 of Annex A to Regulation No 1099/2008 other than, respectively, petroleum coke and lubricating oils. It states that those companies have neither the quantities of emergency stock of heavy fuel oil required by the Vice-Chairperson of the National Agency nor depots to hold such stocks, and they do not therefore qualify as ‘warehouse keepers’ of petroleum products, for the purposes of the ZZNN. The building up and storage of emergency stocks would therefore entail, first, a significant financial burden for these companies, in so far as they would be obliged either to purchase the required quantities of emergency stocks of heavy fuel oil, or to delegate their obligations to other economic operators in return for payment and, second, the need for a technical time limit in order to implement the procedure for registering a depot for storing petroleum products.
29. That court mentions cases similar to those in the main proceedings, in which the Varhoven administrativen sad (Supreme Administrative Court, Bulgaria) dismissed actions brought by companies that had imported or carried out intra-Community acquisitions of petroleum coke or lubricating oils against orders requiring them to build up reserve stocks of heavy fuel oil. (11)
30. However, the referring court has doubts about the compatibility of that legislation with the provisions of Directive 2009/119, read in the light of the Charter.
31. According to that court, it follows, in essence, from recital 33, points (i) and (j) of the first paragraph of Article 2, and Articles 3 and 8 of Directive 2009/119 that the objective of that directive is to build up emergency stocks for all the products referred to in Chapter 3.4 of Annex A to Regulation No 1099/2008, entitled ‘OIL (Crude oil and petroleum products)’, that is to say all 24 subgroups of those products, and not just some of them.
32. However, the Bulgarian legislation only requires the building up of such stocks for oil and four other petroleum products, including heavy fuel oil. (12) It requires any economic operator that has imported products covered by this chapter to build up and maintain emergency stocks of one of those products. In concrete terms, under that legislation, an economic operator using only lubricating oils or petroleum coke as part of its economic activities could therefore be required to build up a reserve stock of heavy fuel oil, even though it does not carry out any activities involving that product type. That court is inclined to the view that such an obligation is contrary to the objectives and spirit of Directive 2009/119 and to the principle of proportionality laid down in the Charter.
33. Indeed, the obligation for an economic operator to store a petroleum product that it does not use in the course of its economic activities would require that operator to purchase or borrow – by delegating part of its obligation – the necessary quantity of that product and to store it in accordance with regulatory requirements. That would entail a significant financial burden (13) for that operator and could affect the internal market and competition rules. The rationale of Directive 2009/119 and the need for consistency would, rather, militate in favour of an interpretation to the effect that the obligations in kind imposed on such an operator do not cause such excessive constraints (such as an obligation to store an energy product falling within the scope of its economic activities), and that would ensure a reasonable balance between the public interests of the European Union and private interests (that is to say, interference in the private legal sphere). Furthermore, the Bulgarian legislation does not allow consideration to be given to the impact on the financial situation and competitiveness of the economic operator concerned of the administrative requirements and financial resources required to build up and maintain emergency stock relating, where applicable, to a product that is unrelated to its economic activity.
34. In those circumstances, the Administrativen sad – Varna (Administrative Court, Varna) decided to stay proceedings and to refer the following questions to the Court for a preliminary ruling, which questions are essentially identical in each of the two cases:
‘(1) Having regard to the objective of [Directive 2009/119], and to Article 2(d) of [Regulation No 1099/2008], and in the light of the principle of proportionality under Article 52(1) of the [Charter], in conjunction with Article 17 thereof, must recital 33 and Article 1, Article 3, Article 8 and Article 2, [first paragraph], (i) and (j) of [Directive 2009/119] be interpreted as precluding national legislation, such as that at issue in the main proceedings, under which persons who have made intra-Community receipts of lubricating oils as defined in point 3.4.20 of Annex A to [Regulation No 1099/2008] (or importers of such lubricating oils) [in the context of case C‑395/22] [or] petroleum coke as defined in point 3.4.23 of Annex A to [Regulation No 1099/2008] for production purposes [in the context of case C‑428/22] can be obliged to build up emergency stocks?
(2) Having regard to the objective of [Directive 2009/119], and in the light of the principle of proportionality under Article 52(1) of the [Charter], in conjunction with Article 17 thereof, must recital 33 and Article 1, Article 3, Article 8 and Article 2, [first paragraph], (i) and (j) of [Directive 2009/119] be interpreted as precluding national legislation, such as that at issue in the main proceedings, under which the types of products in respect of which emergency stocks must be established and maintained are limited to some of the types of products in Article 2, [first paragraph], (i), of that directive, in conjunction with Chapter 3.4 of Annex A to [Regulation No 1099/2008]?
(3) Having regard to the objective of [Directive 2009/119], and in the light of the principle of proportionality under Article 52(1) of the [Charter], in conjunction with Article 17 thereof, must recital 33 and Article 1, Article 3, Article 8 and Article 2, [first paragraph], (i) and (j) of [Directive 2009/119] be interpreted as precluding national legislation, such as that at issue in the main proceedings, under which the making by a person of intra-Community receipts or imports of one of the types of products referred to in Article 2, [first paragraph], (i) of that directive, in conjunction with Chapter 3.4 of Annex A to [Regulation No 1099/2008], entails an obligation on the part of that person to establish and maintain emergency stocks of another, different type of product?
(4) Having regard to the objective of [Directive 2009/119], and in the light of the principle of proportionality under Article 52(1) of the [Charter], in conjunction with Article 17 thereof, must recital 33 and Article 1, Article 3, Article 8 and Article 2, [first paragraph], (i) and (j) of [Directive 2009/119] be interpreted as precluding national legislation, such as that at issue in the main proceedings, under which a person is obliged to establish and maintain stocks of a product which he or she does not use in the course of his or her economic activity and which is not connected with that activity, whereby that obligation also entails a significant financial burden (leading, in practice, to the impossibility of compliance), since the person neither possesses the product nor imports it and/or holds stocks of it?
(5) If any of those questions is answered in the negative: Having regard to the objective of [Directive 2009/119], and in the light of the principle of proportionality under Article 52(1) of the [Charter], in conjunction with Article 17 thereof, must recital 33 and Article 1, Article 3, Article 8 and Article 2, [first paragraph], (i) and (j) of that directive be interpreted as meaning that a person who has made intra-Community receipts or imports of a particular type of product can only be obliged to [build up] and maintain emergency stocks of the same type of product which was the subject of the intra-Community receipts/imports?’
35. By decision of the President of the Court of 9 August 2022, the present cases were joined for the purposes of the written and oral procedures, and the judgment. Written submissions to the Court were filed by Devnia Tsiment, by the Bulgarian, Dutch and Slovak Governments and by the European Commission. During the hearing held on 5 July 2023, those parties, with the exception of the Slovak Government, presented oral arguments and responded to the questions for oral answer put forward by the Court.
IV. Analysis
A. Preliminary observations
36. At the outset, in the interests of clarity, I believe it is appropriate to recast the questions referred for a preliminary ruling as put by the referring court. In essence, that court is asking whether the provisions of Directive 2009/119, read in the light of Article 17 and Article 52(1) of the Charter, must be interpreted as precluding national legislation under which:
– an economic operator that has imported energy products coming under Chapter 3.4 of Annex A to Regulation No 1099/2008 may be required to build up emergency stock (first question);
– emergency stocks are built up for only some of the types of energy products referred to in point (i) of the first paragraph of Article 2 of Directive 2009/119 (second question); and
– imports by an economic operator of a type of product referred to in point (i) of the first paragraph of Article 2 of that directive give rise to an obligation for that operator to build up emergency stocks of another type of product referred to in that provision, even where that operator does not use the latter type of product in the course of its business, and where that obligation constitutes a significant financial burden (third to fifth questions).
B. The first question referred for a preliminary ruling
37. By its first question referred for a preliminary ruling, the referring court is asking, in essence, whether a Member State may, when complying with its obligations under Article 3 of Directive 2009/119, require an ‘economic operator’, within the meaning of Article 8 of that directive, which has imported an energy product listed in Chapter 3.4 of Annex A to Regulation No 1099/2008, to build up and maintain ‘emergency stock’, within the meaning of point (j) of the first paragraph of Article 2 of that directive.
38. I consider that that question should clearly be answered in the affirmative.
39. A number of preliminary comments should be made on this point.
40. First of all, I think it is worth pointing out that, following on from the 1968 and 2006 Directives, (14) as can be seen from Article 1, read in the light of recitals 3 and 33, Directive 2009/119 is aimed at (i) enhancing and ensuring a high level of security of oil supply in the European Union through reliable and transparent mechanisms based on solidarity amongst Member States, while complying with the internal market and competition rules, (ii) maintaining minimum stocks of crude oil and/or petroleum products and (iii) putting in place the necessary procedural means to deal with a serious shortage. It follows that, based on that solidarity among Member States, the oil stocks built up by each Member State represent part of the shared stocks of the European Union. Indeed, recital 8 of that directive confirms this, stating that ‘the availability of oil stocks and the safeguarding of energy supply are essential elements of public security for Member States and for the [European Union]’. (15)
41. Next, it should then be noted that under Article 3(1) of Directive 2009/119, ‘Member States shall adopt such laws, regulations or administrative provisions as may be appropriate in order to ensure … that the total oil stocks maintained at all times within the [European Union] for their benefit correspond, at the very least, to 90 days of average daily net imports or 61 days of average daily inland consumption, whichever of the two quantities is greater’. It emerges from the wording of that provision, first, that the Member States are required to determine for themselves the manner in which they will implement their obligations under that directive (16) and, second, that the directive nevertheless imposes the methods and procedures for calculating those emergency stocks deemed appropriate by the EU legislature.
42. Finally, as part of the implementation of their obligations, Member States may impose stockholding obligations on economic operators. It follows from the various provisions of Directive 2009/119 that the obligation to build up stocks is not always incumbent on the central stockholding entity (‘CSE’) of the Member State, (17) but may also be imposed (exclusively or additionally) on industry and economic operators. (18)
43. In order to answer the first question referred for a preliminary ruling, it is therefore necessary to determine whether Directive 2009/119 specifies the category of economic operators on which a stockholding obligation may be imposed.
44. According to settled case-law of the Court, the interpretation of a provision of EU law requires that account be taken not only of the wording of that provision, but also of its context, the objectives pursued by the rules of which that provision is part and, where appropriate, its origins. (19)
45. First, with regard to the wording of the various provisions of Directive 2009/119, it must be stated that a number of its provisions refer to the concept of ‘economic operator’, although that concept is not expressly defined in the directive. (20) Article 8 of that directive, which is itself entitled ‘economic operators’, regulates the option available to an economic operator to delegate the stockholding obligation imposed on it, at least in part, either to the CSE of the Member State or of other Member States, (21) or to other economic operators which have surplus stocks or stockholding capacity in the rest of the European Union or in the Member State, (22) without, however, specifying the category of undertakings that constitute such operators.
46. In the second place, I note that, from a contextual point of view, the general outline of the concept of ‘economic operator’ may be deduced from the other provisions of Directive 2009/119.
47. First, the second subparagraph of Article 7(1) of that directive states that ‘where a Member State sets up a CSE, it shall take the form of a body or service without profit objective, acting in the general interest and shall not be considered to be an economic operator within the meaning of this Directive’. (23) Conversely, any company acting on a profit-making basis could potentially be classified as an ‘economic operator’ within the meaning of that directive.
48. Second, point (k) of the first paragraph of Article 2 of that directive provides for the existence of ‘economic operators’ that hold ‘commercial’ stocks, that is to say, oil stocks which are not a requirement under that directive. It follows that the term ‘economic operator’ is used generically, and does not refer solely to operators that are subject to obligations to build up oil stocks.
49. Third, Article 3 of that directive, which describes the methods for calculating the volume of stocks that Member States are required to maintain, refers, inter alia, to the ‘average daily net imports’, which in turn, in accordance with paragraph 2 of that article, are calculated on the basis of the crude oil equivalent of imports during the previous calendar year, determined in accordance with the method and procedures set out in Annex I. In accordance with the second method in Annex I, the Member States may make that calculation relying on the ‘sum of the net imports of all other petroleum products, as defined in Chapter 3.4 of Annex A to Regulation (EC) No 1099/2008’. Therefore, in so far as operators that import such products contribute to the total obligation of the Member State to build up emergency stocks, it is logical that those operators are (potentially) subject to obligations to build up and maintain such stocks.
50. In the third place, the very objective pursued by Directive 2009/119, which is to guarantee a high level of security of oil supply, also argues in favour of a broad interpretation of the concept of ‘economic operator’. (24) In the light of that objective, it would be consistent for there to be a requirement for undertakings that may be subject to a stockholding obligation to be able to be in possession of the energy products making up the oil stocks, within the meaning of point (i) of the first paragraph of Article 2 of that directive.
51. Finally, in the fourth place, a broad interpretation of the concept of ‘economic operator’ seems to me to be supported by the legislative history of Directive 2009/119, which makes it possible to identify additional elements regarding the characteristics of those operators.
52. That concept can be traced back to the 1968 Directive, which stated in the fourth recital that ‘national production contributes in itself to the security of supply’ and that ‘the conditions of Community production and the greater security of supply inherent in such production justify making it possible for Member States to place the burden of maintaining stocks on imports’. (25) Thus Article 6(3) of that directive provided that emergency stocks could include, in particular, ‘supplies held in storage by refineries and by importing, storage or wholesale distribution firms’, ‘supplies held in storage by large-scale consumers in compliance with the provisions of national law concerning the obligation to maintain permanent stocks’, and ‘supplies held in barges and coasting-vessels engaging in transport within national frontiers, in so far as it is possible for the competent authorities to keep a check on such supplies and provided that the supplies could be made available immediately’. (26) The equivalent of those provisions currently appears, in essence, under the seventh paragraph of Annex III to Directive 2009/119, which determines the quantities of energy products that can be taken into account in the calculation of the stocks. (27)
53. I therefore consider that ‘economic operator’ should be understood to mean any operator on the market that is active either in the production, import or sale of the energy products listed in Chapter 3.4 of Annex A to Regulation No 1099/2008, or in an activity involving the use of such products. Thus, the notion of ‘economic operator’ may cover not only producers (such as refineries), but also traders in petroleum products (such as Trade Express) or manufacturers using petroleum products for production purposes (such as Devnia Tsiment), which may also, in principle, be subject to a stockholding obligation.
54. It follows that, while Directive 2009/119 does not determine which economic operators may be subject to emergency stockholding obligations or how Member States are to determine such operators, thus leaving Member States free to decide which companies are required to hold such stocks, an analysis in the light of a contextual, teleological and historical interpretation of that directive makes it possible to define the general outline of the concept of ‘economic operator’, which remains very broad.
55. In the light of the foregoing, I propose that the answer to the first question, as reformulated, should be that the relevant provisions of Directive 2009/119, read in the light of Article 17 and Article 52(1) of the Charter, must be interpreted as meaning that they do not preclude national legislation under which an economic operator which imported energy products coming under Chapter 3.4 of Annex A to Regulation No 1099/2008 may be required to build up emergency stock.
C. The second question referred for a preliminary ruling
56. By its second question referred for a preliminary ruling, the referring court asks, in essence, whether a Member State may, when complying with its obligations under Article 3 of Directive 2009/119, restrict the types of energy products constituting emergency stocks only to some of the types of products listed in Chapter 3.4 of Annex A to Regulation No 1099/2008.
57. I believe that the response to that question should be in the affirmative.
58. At the outset, and as stated in point 41 of this Opinion, I would reiterate that the option available to a Member State to impose an obligation to build up emergency stocks derives from Article 3(1) of Directive 2009/119, which requires Member States to ensure that ‘total oil stocks’ are maintained. Point (i) of the first paragraph of Article 2 of that directive defines ‘oil stocks’ as ‘stocks of the energy products listed in Chapter 3.4 of Annex A to Regulation (EC) No 1099/2008’. That chapter contains a list of 24 types of products grouped under the heading ‘Oil (Crude oil and petroleum products)’. In that respect, Regulation No 1099/2008 is only a reference document in relation to Directive 2009/119. (28)
59. In so far as those two provisions refer generally to ‘stocks of the energy products listed in Chapter 3.4 of Annex A to Regulation (EC) No 1099/2008’, it is conceivable that the stockholding obligation would apply to all of those products. In principle, a Member State must therefore have the power to impose a stockholding obligation on operators that would cover all the petroleum products referred to in point (i) of the first paragraph of Article 2 of the that directive.
60. However, it cannot be inferred from those two provisions that Directive 2009/119 requires Member States to ensure that each of the products listed in Chapter 3.4 of Annex A to Regulation No 1099/2008 is constantly maintained, or that they could not restrict the types of energy products constituting their own emergency stock.
61. In the first place, with regard to the wording of the relevant provisions, it should be made clear that point (j) of the first paragraph of Article 2 of Directive 2009/119 defines ‘emergency stocks’ as ‘the oil stocks that each Member State is required to maintain pursuant to Article 3’. However, Article 3 of that directive describes only the method to be used to calculate the volume of stocks that Member States are required to maintain, using as the reference point the ‘average daily net imports’ or the ‘average daily inland consumption’, (29) which in turn are calculated on the basis of the equivalent in crude oil. More specifically, the compulsory stockholding is carried out using the methods and procedures for calculating stockholding obligations referred to in the first and second paragraphs of Article 3(2) (which refer respectively to Annexes I and II to that directive) and Article 3(3) of that directive. Article 3 therefore does not determine the specific composition of the emergency stocks which the Member States are required to hold, but only the volume of those stocks.
62. In that regard, it should be made clear that the approach of the current directive differs from the one used in the previous versions of that directive, which required, in essence, that Member States maintain a level of stocks for each of the following three categories of petroleum products: (a) motor spirit and aviation fuel (aviation spirit and jet-fuel of the gasoline type); (b) gas oil, diesel oil, kerosene and jet-fuel of the kerosene type; (c) fuel oils. (30) As is apparent from recital 5 of the current directive, that change is justified by the objective of adapting the method for calculating stockholding obligations, to bring them more into line with the calculation methods used under the IEA Agreement, that is to say, for practical reasons and to reduce the administrative burden. (31)
63. It follows that, unlike the directives prior to Directive 2009/119, the latter no longer requires categories of products, which demonstrates the EU legislature’s intention to allow Member States to choose freely the products that may make up the emergency stocks.
64. In the second place, it appears to me that that interpretation is supported by contextual factors.
65. First, under Article 4 of Directive 2009/119, entitled ‘Calculating stock levels’, the levels of stocks are calculated in ‘crude oil equivalent’ using the methods set out in Annex III to that directive. (32) First, in accordance with the third paragraph of Annex III, in the case of ‘crude oil’, the quantities of crude oil are added together (reduced by 4%, which corresponds to the average naphtha yield). Second, in the case of the other types of petroleum products, in accordance with the sixth paragraph of that annex, in order to calculate the crude oil equivalent, Member States may choose between the two methods proposed, namely: ‘(a) include all other stocks of the petroleum products identified in Chapter 3.4 of Annex A to [Regulation No 1099/2008] … by multiplying the quantities by a factor of 1.065; or (b) include stocks of only the following products: … by multiplying the quantities by a factor of 1.2’ (‘the subparagraph (b) category of products’). (33) The wording of Annex III to Directive 2009/119 therefore makes explicit provision for the possibility for Member States to include in their emergency stock only part of the petroleum products, that is to say, those falling within the subparagraph (b) category of products. However, granting such a choice to Member States presupposes their freedom to determine the composition of their emergency stocks, provided that the volumes required in Article 3 of Directive 2009/119 are respected. Only Member States have a proper insight in terms of national consumption, production or imports of petroleum products. In fact, it appears from official statistical data that the vast majority of Member States, like the Republic of Bulgaria, chose to include in their emergency stock, in addition to crude oil, in accordance with the second method mentioned above, products coming under category (b). (34)
66. Second, it should be noted that the only restriction on the Member States free choice derives from the requirements of Article 9(5) of Directive 2009/119, which concerns the composition of ‘specific stocks’ that may only consist of one (or more) of 14 types of petroleum products listed in Article 9(2) of that directive. Each Member State that has not made a commitment for the full length of a given calendar year to maintain at least 30 days of specific stocks is to ensure that at least one-third of its stockholding obligation is held in the form of products composed in accordance with Article 9(2) and (3) of that directive, that is to say, at least one of the categories of petroleum products listed in paragraph 2. That provision essentially requires that at least one third of the Member State’s stockholding obligation be maintained in the form of specific products, reflecting consumption patterns (and thus reflecting the real needs of the Member State concerned).
67. Finally, in the third place, as regards the objective of the relevant provisions, contrary to what the referring court claims, I consider that it cannot be stated that the objective of ensuring a high level of security of oil supplies can be achieved only if Member States maintained in their emergency stocks all the energy products referred to in Chapter 3.4 of Annex A to Regulation No 1099/2008. On the contrary, the importance of the various categories of petroleum products listed in that annex will vary when it comes to dealing with serious supply crises. That is apparent from the fact that the current method for calculating the level of stocks held, as detailed in Annex III to Directive 2009/119 and described in point 65 of this Opinion, provides, for the calculation of the crude oil equivalent of energy products, a more favourable coefficient (that is to say, 1.2) for the subparagraph (b) (35) category of products compared to the coefficient provided for other types of petroleum products (that is to say, 1.065). In other words, that distinction between coefficients suggests that not only does the current directive not require Member States to maintain emergency stocks for all energy products listed in Chapter 3.4 of Annex A to Regulation No 1099/2008, but that, by setting a more favourable coefficient for the subparagraph (b) category of products, that directive implicitly recognised that those products are more useful in dealing with a possible serious supply crisis. Similarly, Directive 2009/119 permits the inclusion in emergency stocks of stocks of ‘crude oil’, the processing of which makes it possible to produce all categories of petroleum products referred to in that annex. From a practical point of view, it would therefore be illogical to want to oblige Member States to hold emergency stock for absolutely all the categories of products referred to in Chapter 3.4 of Annex A to Regulation No 1099/2008.
68. In the light of the foregoing, I propose that the answer to the second question should be that the relevant provisions of Directive 2009/119, read in the light of Article 17 and Article 52(1) of the Charter, must be interpreted as meaning that they do not preclude national legislation under which emergency stocks are built up for only some of the types of energy products referred to in point (i) of the first paragraph of Article 2 of Directive 2009/119, provided that that stock (i) is built up using the methods and procedures for calculating the stockholding obligations referred to in Article 3(1), (2) and (3) of that directive, (ii) is calculated in accordance with the methods set out in Annex III to that directive, and (iii) complies with Article 9(5) of that directive.
D. Third, fourth and fifth questions referred for a preliminary ruling
69. By its third to fifth questions referred for a preliminary ruling, which it is appropriate to consider together, the referring court asks, in essence, whether a Member State may, when complying with its obligations under Article 3 of Directive 2009/119, require an economic operator to hold stocks of products other than those it has imported or which are not related to its economic activity, even if that entails a significant financial burden.
70. Unlike the answers proposed for the first two questions, I believe the answer to the last three questions should be more nuanced.
71. On the basis of the answers to the first two questions, it should be recalled, first, that Directive 2009/119 does not determine which economic operators may be required to comply with emergency stockholding obligations, so that it is for the Member States that are subject to the obligations referred to in that directive to decide which undertakings (or CSEs) are required to maintain stocks of oil and/or petroleum products. Second, that directive does not impose obligations on Member States to maintain stocks of all the energy products listed in Chapter 3.4 of Annex A to Regulation No 1099/2008.
72. It is therefore logical to conclude that it is for the Member States to determine which obligations to build up and maintain emergency stocks may be imposed on economic operators in order to fulfil the obligations arising under Directive 2009/119. In practical terms, therefore, a Member State should in principle be able to impose the obligation to maintain emergency stock on any economic operator, both in terms of quantity and type of product, irrespective of whether the operator itself has at its disposal the product to be stored and/or storage facilities for that product.
73. In that respect, it should be noted that while, as a general rule, a Member State complying with its stockholding obligation will seek to do so in the most efficient way and will choose to impose those obligations primarily on undertakings that already have storage facilities or are genuinely able to lease such facilities, the particular situation in that Member State could make it necessary to distribute the stockholding obligations beyond that circle of undertakings, by also involving other undertakings that either do not themselves have stockholding facilities or easy access to such facilities, or do not have the energy product coming under the emergency stock. (36)
74. However, where a Member State adopts measures in the exercise of the discretion conferred upon it by an act of EU law, it must be regarded as implementing that law, within the meaning of Article 51(1) of the Charter. (37) Therefore, since such obligations have potentially considerable consequences for the situation of an economic operator, they can be imposed only by having due respect, inter alia, for the right to property enshrined in Article 17 of the Charter and the freedom to conduct a business guaranteed by Article 16 of the Charter, which includes the freedom to exercise an economic or commercial activity, contractual freedom and free competition, (38) but also the right for any undertaking to be able to freely use, within the limits of its liability for its own acts, the economic, technical and financial resources available to it. (39)
75. As regards the restrictions that may be placed on the use of the right to property as a result of the imposition of these obligations, I should recall, moreover, that the right to property guaranteed by Article 17 of the Charter is not absolute and that its exercise may be subject to restrictions justified by objectives of general interest pursued by the European Union. Consequently, as is apparent from Article 52(1) of the Charter, restrictions may be imposed on the exercise of the right to property, provided, inter alia, (40) that the restrictions genuinely meet objectives of general interest and do not constitute, in relation to the aim pursued, a disproportionate and intolerable interference, impairing the very substance of the right guaranteed. (41) Similarly, with regard to freedom to conduct a business, the Court also confirmed that that freedom does not constitute an absolute prerogative, but must be taken into consideration in relation to its function in society. (42)
76. In that regard, I consider it useful to make some observations.
77. In the first place, it seems to me that there can be little dispute that the objective pursued by Directive 2009/119, as described in point 40 of this Opinion, consisting of guaranteeing the security of energy supply, is one of the objectives of general interest capable of justifying a restriction on the use of the right to property. (43) The Court of Justice has already ruled that ensuring a minimum supply of petroleum products is to be regarded as transcending purely economic considerations and thus as capable of constituting an objective covered by the concept of public security. (44) Therefore, by targeting stockholding at the most essential petroleum products and by broadly defining the circle of economic operators subject to the stockholding obligation, the legislation at issue in the main proceedings should, in my view, be considered capable of achieving that objective.
78. In the second place, it is necessary to assess whether such obligations, in the absence of compensation for economic operators on whom those obligations are imposed, constitute a disproportionate and intolerable interference impairing the very substance of the right to property. (45) Although Directive 2009/119 does not provide for a compensation system, it does, however, contain other rules that I believe are relevant to the assessment of the proportionality of those obligations.
79. First, under Article 8 of Directive 2009/119, a Member State must ‘ensure that any economic operator on which it imposes stockholding obligations … is given the right to delegate those obligations at least in part’. (46) As described in point 45 of this Opinion, the operator thus has the choice of delegating those obligations to a CSE or to other economic operators, both inside and outside the territory of the Member State on behalf of which the stocks are held ‘on payment of an amount limited to the cost of the services provided’. (47) That provision demonstrates that the EU legislature has implicitly recognised that Member States may impose obligations on economic operators that are difficult to fulfil and that, as a result, economic operators should be able to choose to delegate those obligations to a more appropriate operator at a reasonable price. Therefore, a genuine possibility of delegation should be seen as a guarantee that stockholding obligations are proportionate and as ensuring fair conditions of competition.
80. Second, and in the same vein, it should be recalled that the obligation to build up and maintain stocks has a well-defined temporal and material scope (one year, for an identified quantity) and that nothing should prevent the economic operators that are required to build up emergency stocks of petroleum products which they do not use in the course of their activities to proceed with the sale of those products once the year of compulsory emergency stockholding has expired and thus make a profit from them.
81. Having made those observations, the assessment of the compatibility with EU law of any limitations caused by the contested orders ultimately rests with the referring court, in the light of the specific circumstances present in the Republic of Bulgaria.
82. In that regard, it appears evident that the obligations imposed must not under any circumstances exceed the minimum supply requirements as defined in Article 3 of Directive 2009/119. (48) Such an obligation, when shared fairly (and therefore, by definition, proportionately) between all economic operators should not, as such, be likely to undermine the essential content of the right to property and/or the freedom to conduct a business.
83. With regard to the extent of the interference, two scenarios must be distinguished.
84. On the one hand, I am of the opinion that, where economic operators are required to build up emergency stocks of a type of energy product that forms part of their business, the interference with the right to property (and by extension the freedom to conduct a business) cannot a priori be regarded as disproportionate, in so far as, in particular, they have, in principle, the physical infrastructure or commercial relationships necessary for the production, marketing, processing, transport and storage of crude oil and petroleum products. However, that obligation should not represent a disproportionate or excessive financial burden in relation to the turnover generated in the course of its commercial activity. (49)
85. On the other hand, when a Member State, such as the Republic of Bulgaria in the present case, lays down in its national legislation an obligation to build up emergency stocks of a petroleum product on the part of an economic operator that does not use that product in the course of its regular economic activities, it is logical to presume that that operator is likely to be exposed to additional costs compared with operators in the first scenario. Thus, if there is an actual or potential competitive relationship between such operators, the imposition of such an obligation could create manifestly unfair conditions as regards the ability to meet the stockholding obligation, which would be incompatible not only with respect for the internal market and competition rules, which is expressly required in recital 33 of Directive 2009/119, but also with the principle of non-discrimination. In such a scenario, which is rather exceptional, where an operator sees its competitive position substantially impacted as a result of a financial burden, it could therefore be possible to have recourse, under national legislation or by judicial means on the basis of an individual assessment, to corrective measures, such as compensation for the additional cost, or even an exemption from the requirement to pay insurance or excise duty connected with the purchase of the petroleum product or the administrative costs connected with transporting and storing that product, in order to be able to restore fair conditions in the market and put all the operators on an equal footing.
86. In the light of the foregoing, I propose that the answer to the third, fourth and fifth questions, as reformulated, is that the relevant provisions of Directive 2009/119, read in the light of Article 17 of the Charter, should be interpreted as not precluding national legislation under which an economic operator is required to hold stocks of products other than those it has imported itself, or which are not related to its economic activity, even if that entails a significant financial burden for that operator, unless such an obligation would put the operator concerned at a disproportionate disadvantage, in particular compared with its turnover and compared with other competing economic operators.
V. Conclusion
87. In the light of the foregoing, I propose that the Court should reply to the questions referred for a preliminary ruling by the Administrativen sad – Varna (Administrative Court, Varna, Bulgaria), as reformulated:
Article 1, point (i) of the first paragraph of Article 2, and Articles 3 and 8 of Directive 2009/119/EC of 14 September 2009 imposing an obligation on Member States to maintain minimum stocks of crude oil and/or petroleum products, as amended by Commission Implementing Directive (EU) 2018/1581 of 19 October 2018, read in conjunction with Chapter 3.4 of Annex A to Regulation (EC) No 1099/2008 of the European Parliament and of the Council of 22 October 2008 on energy statistics, as amended by Commission Regulation (EU) 2019/2146 of 26 November 2019, and Article 17 of the Charter of Fundamental Rights of the European Union,
must be interpreted as meaning that they do not preclude national legislation under which:
(1) an economic operator that has imported energy products coming under Chapter 3.4 of Annex A to Regulation No 1099/2008, as amended by Regulation 2019/2146, may be required to build up emergency stock;
(2) emergency stocks are built up for only some of the types of energy products referred to in point (i) of the first paragraph of Article 2 of Directive 2009/119, as amended by Implementing Directive 2018/1581, provided that that stock (i) is built up using the methods and procedures for calculating the stockholding obligations referred to in Article 3(1), (2) and (3) of that directive, (ii) is calculated in accordance with the methods set out in Annex III to that directive and (iii) complies with Article 9(5) of that directive;
(3) an economic operator is required to hold stocks of products other than those it has imported itself, or which are not related to its economic activity, even if that entails a significant financial burden for that operator, unless such an obligation would put the operator concerned at a disproportionate disadvantage, in particular compared with its turnover and compared with other competing economic operators.