Germany's legislation on oil security

Part of Oil Security Toolkit

There are three laws which primarily govern the German response to oil supply shortages in emergency situations: first, the more general 1975 Energy Security of Supply Act (ESSA), second, the more specific 2012 Petroleum Stockholding Act (PSA) and third the Mineral Oil Data Act (Datenverfügbarkeiten durch das Mineralöldatengesetz). The ESSA provides for a general legal framework aimed at the protection of Germany’s electricity supply (including but not limited to oil supply). The PSA implements the European Union’s Directive 2009/119/EC and lays out a specific legal framework concerning the protection of Germany’s energy supply by stockholding oil and other petroleum products. The Mineral Oil Data Act provides the legal basis for the collection of mineral oil data from all major mineral oil and crude oil processing companies. The mineral oil data forms the basis for the regular monitoring of the German mineral oil supply.


According to article 1(1) of Germany’s 1975 ESSA, Germany’s provisions governing oil supply disruptions are triggered by the necessity to ensure that Germany’s “vital energy needs” can be met when energy supply is “directly threatened or has been disrupted” and when the threat or disruption of the energy supply cannot be addressed by market based measures, when such measures could not be implemented in a timely manner or when such measures could be implemented only by disproportionate means. The term “vital energy needs” expressly includes needs required for the discharge of public services and for the compliance with international obligations.


Moreover, the provisions of ESSA (article 2(1) ESSA) can also be utilised in order to give effect to obligations based on the International Energy Programme (IEP) and if the country’s energy supply is threatened or disrupted as a result of import or export restrictions imposed in accordance with international obligations (article 2(3) ESSA).


According to article 12 of the more specific PSA, stocks may be released in accordance with the provisions of the PSA in order to:  

  • prevent impending or remove existing energy supply disruptions
  • respond to a substantial and sudden supply disruption of oil or petroleum products to Germany or to an European Union (EU) Member State irrespective of whether or not an international decision to release stocks exists
  • discharge obligations pursuant to a decision of the Governing Board of the International Energy Agency (IEA) to release stocks or to take additional measures or both
  • support Member States of the IEA or the EU
  • respond immediately to emergencies
  • respond to local crises

For the purposes of the ESSA it is the German Federal Government which determines whether oil supply is threatened or disrupted (article 3(1) ESSA). The Government may delegate this authority to the Federal Ministry for Economic Affairs and Energy.

For the purposes of the PSA the decision making authority has been devolved to the Federal Ministry for Economic Affairs and Energy (article 12(1) PSA). The Federal Ministry can in turn authorise the Federal Office of Economics and Export Control to utilise the provisions of the PSA where the secure supply of the population or public institutions with vital goods or services so requires (article 12(1) PSA).


Storage Agency

Germany’s Central Stockholding Entity is the German National Petroleum Stockpiling Agency (EBV). The PSA stipulates that the EBV, a cooperation under federal public law is exclusively responsible for maintaining Germany’s strategic oil reserves. In certain cases, the EBV may delegate its stockpiling responsibility to other actors as long as the EBV continues to hold at least 90 per cent of the stipulated stockholding requirement (article 7(3) PSA).

The EBV is composed of all those entities who import gasoline fuel, diesel fuel, extra light heating oil or kerosene type jet fuel oil on a commercial basis or in the context of commercial operations or manufactures it or causes it to be manufactured on their own account in Germany to the extent that the total quantity imported or manufactured is at least 25 tonnes per calendar year (article 13 PSA). The amount each entity contributes to the operational costs of the EBV depends on the quantity of oil and petroleum products which each entity imports or manufactures (article 23 (2) PSA).

Storage Quantity

The EBV is obliged to store oil and petroleum products from 1 April until 31 March of the following year equal to the net imports of 90 days averaged across the previous three calendar years (article 3(1) PSA). If this figure is lower than the 90 day average net imports averaged across the last calendar year the figures of the last calendar year are authoritative (article 3(2) PSA).

At least one third of all stock must be held as gasoline fuel, diesel fuel, extra light heating oil and kerosene type jet fuel (article 4(4) PSA).

Additionally, the Ministry for Economic Affairs and Energy may stipulate that the EBV should hold a certain quantity of stocks as specific stocks (article 5(1) PSA). Specific stocks are stocks which are owned by the EBV and exist in the form of gasoline fuel, diesel fuel, extra light heating oil and kerosene type jet fuel (article 5(1) PSA).

Availability of stocks

According to article 6(4) PSA, all stocks must be stored in such a manner that they can be made available for continuous consumption within 90 days in the case of petroleum products and components, and within 150 days in the case of crude oil. Further, the EBV must ensure that its stocks are available and physically accessible at all times (article 6(6) PSA).

Storage Locations

Article 6(3) PSA stipulates that storage locations shall be distributed evenly across Germany. Stocks may be stored in higher proportions in specific regions for technical or economic reasons to the extent that the oil supply of the other regions is secured.


General

If it has been determined that the supply of energy necessary to ensure the satisfaction of Germany’s vital energy needs is threatened or disrupted, article 1(1) of ESSA stipulates that provisions may be enacted by legislative decree governing the production, transport, storage, distribution, disposal, acquisition, utilisation and maximum prices of oil.

Moreover, provisions may be enacted to regulate the import, export and disposal of oil and petroleum products to ensure compliance with the IEP. Such measures are permissible only to the extent that they are required by the IEP (article 3(5) ESSA) and when market based measures have been exhausted, or when such measures could not be implemented in a timely manner or when such measures could be implemented only by disproportionate means (article 2(1) ESSA). 

Stockdraw

Sale/Tender

Article 12 PSA provides that stocks of oil, petroleum products or a combination of the two may be released. Stocks are sold at current market prices, preferentially to members of the EBV (article 12(5) PSA). If stocks are released the Ministry of Economic Affairs and Energy must inform the Commission of the EU and the IEA (article 12(4) PSA).

Production Surge

N/A

Demand restraint

Specifically, provisions based on article 1(1) ESSA may introduce restrictions that limit the disposal, acquisition and utilisation of oil to specific times, locations, quantities or which stipulate that oil may be used only for priority supply purposes. Further, the utilisation of motorised vehicles can be restricted based on location, time, distance, speed, number of users and based on the necessity of use (article 1(3) ESSA).

Fuel Switching

N/A


Germany’s emergency regime is monitored and enforced on the domestic, regional and international level. Each will be considered in turn.

Domestic

Reporting duties

According to article 10(1) ESSA natural and legal persons, and unincorporated associations are obliged to share all information with the respective authorities to the extent that the execution of the authorities’ tasks so requires. Further, authorised personnel are entitled to enter and examine premises during ordinary business hours, to take samples and to examine the business documents of the respective natural or legal persons (article 10(2) ESSA).

The EBV is supervised by the Ministry of Economic Affairs and Energy (article 31(1) PSA). The Ministry is entitled to be informed about the activities of the EBV at all times. It can demand oral and written reports from the EBV and must be granted access to files and documents to the extent that the exercise of the Ministry’s powers so requires (article 31(2) PSA).

The PSA imposes various specific reporting obligations on the EBV (articles 34-38 PSA). The EBV generates records concerning the storage locations, quantities, owners, types of stocks and delegations on a regular basis (article 34(1) PSA). A summarised version of this list is provided by the EBV to the Federal Office of Economics and Export Control (BAFA) and forwarded to the Commission of the European Union on an annual basis (article 34(2) PSA) by BAFA. Additionally, monthly reports containing information concerning the stocks held at the end of each month are to be submitted to the Federal Office of Economics and Export Control (article 35(1) PSA). Based on this report, the Federal Office of Economics and Export Control transmits final statistics on the stocks held on the last day of the respective calendar month to the Commission of the EU (article 35(2) PSA). Further, the EBV must submit regular reports concerning its specific stocks (article 36 PSA).

Additionally, all members of the EBV are obliged to provide the data necessary to calculate their contribution to the EBV on a monthly basis (article 33 PSA). Further, members must furnish all information required for the effective supervision of the fulfilment of their obligations regarding the payment of their fees (article 38(2) PSA). Officials of the Federal Office of Economics and Export Control are authorised to enter operational sites and offices of the EBV and its members during ordinary business hours to examine the premises and documents (articles 38(4) PSA).

Enforcement

Provisions enacted pursuant to ESSA are implemented by various specialised federal agencies (article 4 ESSA). Available sanctions (article 15 ESSA) for non-compliance with measures enacted to ensure the uninterrupted oil supply pursuant to ESSA include fines (EUR 10000 – EUR 25000) and imprisonment (up to 2 years).

If the Ministry for Economic Affairs and Energy determines that the EBV violated current law the Ministry must revoke such decisions or acts and the Ministry must require that measures taken in contravention of current law are reversed (article 31(3) PSA). If the EBV continues to violate its duties, the Ministry can appoint a commissioner to take over the responsibilities of the EBV (article 31(4) PSA).   

Non-compliance with the respective reporting obligations of the EBV and its members can lead to the imposition of a fine of up to EUR 20000 (article 40(2) PSA) which will be enforced by the Federal Office of Economics and Export Control (article 40(3) PSA).

Regional

European Union

As a Member State of the EU, Council Directive 2009/119/EC obliges Germany to maintain a minimum volume of emergency oil stocks corresponding to 90 days of average daily net imports or 61 days of average daily inland consumption, whichever of the two quantities is greater. The Directive also imposes strict requirements concerning the composition and location of the emergency oil stocks, so as to guarantee their availability and accessibility in case of need, among other provisions.

Germany’s compliance with the provisions of the directive is monitored and enforced by the European Commission. If a Member State is deemed not to be compliant with the EU Directive, the Commission might decide to initiate an infringement procedure, which might ultimately lead to refer the case to the Court of Justice of the European Union (articles 258-259, Treaty on the Functioning of the European Union).

International

The IEA

As a Member of the IEA, Germany is obliged, pursuant to article 2 IEP, to maintain oil reserves equal to 90 days of net imports of the previous year. IEA Members are obliged to submit information concerning their emergency measures to the IEA secretariat (article 32 IEP) on a continuous basis and the IEA monitors Member countries’ compliance with the IEP. The IEP does not, however, make any provision for the enforcement of any obligations imposed by the IEP.