Greece's legislation on oil security

Part of Oil Security Toolkit

The 2013 Law on Maintaining Minimum Stocks of Crude Oil or/and Petroleum Products and Other Provisions (MSOCO) provides the comprehensive legal framework of the Greek oil emergency response system. The 2013 Act on the Emergency Action Plan for tackling serious disruptions to Oil or/and Oil Products Supply (APO) contains further details concerning Greek emergency measures. The 2013 Decision of the Deputy Minister concerning the Regulation of the Maintenance of Emergency Stock (DRME) stipulates additional substantive requirements concerning Greek oil emergencies.


According to article 2(1)(g) MSOCO, a major supply disruption exists when there is a substantial and sudden drop in the supply of crude oil or petroleum products to the country or to a Member State, irrespective of whether or not the International Energy Agency (IEA) has made a decision in this regard.

More specifically, article 3(1) APO (cf. article 3(3) APO) provides that in order to determine whether or not a serious international disruption of oil supply exists the decisions of the IEA and of the European Union (EU) should be taken into account together with data held by the Greek Ministry of Environment, Energy and Climate Change.

Indicators supporting the conclusion that a serious domestic disruption of oil supply exists include a drop of daily oil supply by at least seven per cent for a time period of at least 15 days (article 3(2)(b) APO), a drop of daily oil supply by at least 30 per cent for less than 15 days (article 3(2)(bb) APO), a lack of certain oil products in the country or parts of the country threatening social and financial activity (article 3(2)(cc) APO).


The criteria used to identify whether or not a major supply disruption exists for the purposes of the Greek MSOCO are identified in the Plan for Emergency Measures (PEM) prepared by the Committee for the Management of Major Supply Disruption of Crude Oil or/and Petroleum Products (MSD) (article 16(5) MSOCO).


Storage Agency

Currently, Greece does not have a central stockholding authority. However, article 7 MSOCO empowers the Minister of Economy and Development and the Minister of Environment and Energy to suggest the establishment of such an authority. For now, Greece satisfies its stockholding duties by imposing stockholding obligations on commercial actors (cf. article 8 MSOCO) – specifically, oil importers and large end users (article 19(1) MSOCO). Subject to certain conditions commercial actors can delegate their stockholding obligation (article 8(1-5) MSOCO).

Storage Quantity

Article 3(1) MSOCO provides that emergency stocks must correspond at the least to 90 days of average daily net imports (cf. article 19(1) MSOCO; cf. article 4 DRME).

Availability of stocks

According to article 2(1)(m) MSOCO physical accessibility is ensured if stocks can be transported and released to consumers within time frames and conditions conducive to alleviating the supply problems which may have arisen. Further, stocks must be held as physical stocks to ensure their physical accessibility and availability at all times (article 5(3) MSOCO).

Storage Locations

The technical modalities concerning the storage of emergency stocks are regulated by articles 10, 11, 12, 13 and 14 DRME. Additionally, article 10 DRME provides that storage facilities should be well connected to the country’s otherwise existing oil infrastructure. However, Greek primary legislation does not specify particular geographic locations at which emergency stocks should be held.


General

Greek emergency measures are managed by the MSD (article 16(1) MSOCO; cf. article 4, 9 APO). In particular, the MSD is obliged to draft the PEM (article 16(1)(a) MSOCO). Further, article 7(2) APO provides details concerning the sequence of emergency measures beginning with voluntary reductions of oil demand and leading to the obligatory production of particular oil products.

Stockdraw

Sale/Tender

At times of emergency and when the Greek PEM is in force, the MSD may propose to the Greek Minister of Environment and Energy the release of emergency stocks (article 16(4) MSOCO; cf. article 16(9) MSOCO; cf. article 6(C) APO).

Production Surge

According to article 6(C)(3) APO at times of emergency measures may also be taken concerning the obligatory production of particular quantities of particular oil products.

Demand restraint

Article 6 APO distinguishes between voluntary and obligatory measures that reduce the demand for oil products. Voluntary measures, whose implementation shall be facilitated with the help of mass media campaigns (article 6(A)(1) APO), may inter alia relate to the usage of public rather than private transport (article 6(A)(1)(a) APO) or the saving of energy in private households (article 6(A)(1)(c) APO). Obligatory demand restraint measures may inter alia relate to transport restrictions (article 6(B)(1)(a) APO) including speed limits (article 6(B)(1)(a)(aa) APO), restrictions concerning specific categories of vehicles (article 6(B)(1)(a)(ee) APO) and the cancellation of flight and ship routes (article 6(B)(1)(a)(gg) APO).

Additional restrictions may concern the modes of energy consumption restricting for example public lighting (article 6(B)(2)(a)(cc) APO) or temperature limits of thermostats of buildings (article 6(B)(2)(a)(aa) APO). Finally, energy-intensive industrial units may be ordered to limit their oil consume by restricting their operating hours (article 6(B)(4)(a) APO).

Fuel Switching

According to article 6(B)(3) APO emergency measures may be enacted that call on consumers of oil products to substitute their commonly used oil products with alternative fuels.


Greek primary legislation does not specify any particular limits of emergency measures, but article 7(1)(b) APO stipulates that when implementing emergency measures particular attention should be paid to the interests of organisations providing care and education services, authorities maintaining public order and national defence, businesses providing services of public and general interest and consumers and geographical regions with special needs.


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

Domestic

Reporting duties

Article 6(1) MSOCO obliges the Ministry of Environment and Energy to keep a continuously updated record of the Greek emergency stocks. Additionally, a summary of all stocks held must be send by 25th February to the European Commission (article 6(2) MSOCO). The Ministry of Environment and Energy shall send a report concerning Greek emergency stocks to the European Commission within 15 days if requested to do so by the European Commission (article 6(3) MSOCO). Moreover, statistical summaries of emergency stocks (article 10 MSOCO), specific stocks (article 11 MSOCO) and commercial stocks (article 12 MSOCO) must be forwarded to the European Commission on a regular basis. Additional reporting duties are triggered if a serious disruption of oil supply has been declared (cf. article 5 APO;

Enforcement

Article 18 MSOCO provides that otherwise applicable domestic sanctions also apply to violations of provisions of the MSOCO (cf. article 6(F) APO). In particular, imposed fines are: a) at least 100 000 Euro in case of refineries, b) at least 50 000 Euro in case of commercial companies or Major Consumers and c) at least 20 000 Euro in case of retailers (article 26 DRME) or up to 10 per cent of an actor’s average monthly turnover may be payable (article 18 MSOCO). Moreover, article 25 DRME enables government officials to carry out inspections and on-site checks of emergency stock facilities.

Regional

European Union

As a Member State of the European Union, Council Directive 2009/119/EC obliges Greece 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.

Greece’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, Greece is obliged, pursuant to article 2 of the International Energy Programme (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.