Energy - Minerals

A. GENERAL

The electricity market in Greece is currently in process of a fundamental transformation in the context of implementing the EU Third Energy Package, the Target Model, and organising of the Energy Exchange and complying with the obligations undertaken by the Economic Adjustment Programmes agreed with Greece’s international lenders. Key reforms are being introduced or elaborated aiming to enhance competition, remove significant distortions in the market, and modernise network infrastructure.

What are the main pieces of legislation regulating the electricity sector?

The main pieces of legislation are: a) the Law no. 4001/2011, OJ 179 Α/22.08.2011, as amended, (the Energy Framework Law); b) the law no. 4425/2016, OJ A’185/30.09.2016, as amended by the law 4512/2018, OJ A’5/17.01.2018 regulating the establishment and operations of the Energy Exchange, (the Energy Exchange law); and c) the Law 4389/2016, OJ Α' 94/27.05.2016, regulating the quarterly electricity forward products’ auctions (the NOME law).

1. Which are the basic principles of the Greek natural gas legislative and regulatory framework?

The Greek natural gas legislative and regulatory framework has been formed and evolved mainly on the basis of EU legislation aimed at the liberalization of the energy market, so far consisting of three Energy Packages, namely Directive 98/30/EC (first natural gas Directive), Directive 2003/55/EC and Regulation (EU) 1775/2005 ("Second Energy Package"), as well as Directive 2009/73/EC and Regulation (EU) 715/2009 ("Third Energy Package") relating  to the natural gas market. Consequently, the main principles applying to the natural gas sector in Greece are those set out by the EU. In particular, EU natural gas policy focuses on the effective unbundling of natural gas activities, the guarantee of third party access rights (regulated TPA rights) which enable third parties such as suppliers to access and use the system or network (natural and legal monopolies), as well as the pivotal role that the national regulatory authorities play in the regulation of the natural gas market. Finally, provisions in relation to transparency, public services and interstate cooperation (e.g. Regulation (EU) 713/2009 on the establishment of the Agency for the Cooperation of Energy Regulators or "ACER", which is to be modified in the context of the Winter Package) supplement the relevant legal framework at EU and national level.

2. Could you give us an overview of the Greek natural gas market?

The political decision for the entry of natural gas into the energy mix of Greece was taken in 1987. Since then, Greece has concluded many interstate agreements aimed at the import of natural gas, given that to date Greece has no natural gas production of its own. Such imports are carried out under long term contracts, mostly containing take-or-pay clauses, with major international natural gas companies, such as the Russian Gazprom, the Algerian Sonatrach, the Azeri AGSC and the Turkish BOTAS.

Greece bears a great variety and quantity of minerals and it is a chief supplier of bauxite in the global market.

The mining industry is presently regulated mainly by the Mining Code (Legislative Decree 210/1973, as amended by several Laws) and the Regulation on Mining and Quarrying activities (Ministerial Decision 12050 of 20111). Additionally the forestry legislation as well as the european union legislation on the environmental impact assessment, the NATURA habitats, and the management of waste of the extractive industries, put a stress on the environmental side of the mining industry.

The basic principles governing the greek mining law are: a) freedom in mining by private entities and persons (since 1861), b) priority in the concession of the mine to the first applicant (since 1910), c) mining is considered a public interest and it is protected by the Greek Constitution.

Article 18 of the Costitution provides that specific laws provide for the rights and their transfer on mines. Article 106 of the Costitution provides:
“...1. In order to consolidate social peace and protect the general interest, the State shall plan and coordinate economic activity in the Country, aiming at safeguarding the economic development of all sectors of the national economy. The State shall take all measures necessary to develop sources of national wealth in the atmosphere, in underground and underwater deposits, and to promote regional development and to especially further the economy of mountainous, insular and frontier areas...”

Having achieved export growth in petroleum by 81.16% in Balkan countries like neighboring Romania, Greece has a modernized institutional framework which is constantly improving competition in the oil market.

Which products are defined as “petroleum products”?

The term “petroleum products” includes as well liquid and gaseous biofuels, namely liquid and gaseous motor fuels produced from biomass.

What are the main laws regulating activities related to hydrocarbons in Greece?

The legal framework pertaining to hydrocarbons in Greece is mainly shaped by Law 2289/1995, which regulates the prospecting, exploration and production activities related to hydrocarbons in Greece and sets out the requirements for the licensing of the respective rights. Law 2289/1995 was amended by Law 4001/2011, which also established the Hellenic Hydrocarbon Resources Management S.A. (HHRM) as the competent authority for the management of these rights on behalf of the Greek State.

It should be noted, however, that - following the common practice of the Greek State - each contract signed between HHRM and a Concessionaire on this basis is separately ratified by law, the terms of which are not always fully consistent with the provisions of Law 2289/1995. In this respect, it seems that - in ad hoc cases - the Greek State may be willing to improve some of the provisions of the main Law 2289/1995, as incorporated in each contract separately, ratifying the said improvements by law.

Finally, Law 4409/2016, which sets out the legal framework for safety in offshore operations involving the exploration and production of hydrocarbons, transposed Directive 2013/30/ EU into Greek law.