Part of Oil Security Toolkit
IEA (2020), Belgium's legislation on oil security, IEA, Paris https://www.iea.org/articles/belgium-s-legislation-on-oil-security
There are two acts of law which primarily govern the Belgian response to oil supply shortages in emergency situations: first, the more general 1976 Law Approving the Agreement (LAA) on an International Energy Programme (IEP) and second, the more specific 2006 Compulsory Stockholding Act (CSA). The LAA takes the form of a framework act provides for a very general legal framework aimed at the protection of Belgium’s oil supply.
The CSA implements the European Union (EU)’s Directive 2009/119/EC and lays out a specific legal framework concerning the protection of Belgium’s energy supply by stockholding oil and other petroleum products.
According to article 2(2) of the 1976 LAA an oil emergency exists when oil supplies fall to such levels that it becomes impossible to satisfy the country’s ordinary needs. Alternatively, an oil supply crisis exists when the circumstances referred to in articles 13 (7% oil supply reduction), 14 (12% oil supply reduction), or 17 (supply reduction exceeding 7%) of the IEP are satisfied, or if the Governing Board of the International Energy Agency (IEA) determines unanimously that an oil supply crisis exists. Article 2(7) CSA mirrors that definition.
For the purposes of the 1976 LAA, it is the Belgian Council of Ministers that determines by means of decree whether or not an oil emergency exists within the meaning of article 2(2) LAA. Alternatively, the LAA also allows for the possibility that the Governing Board of the IEA may determine that an oil supply emergency exists. Again, the CSA mirrors that definition, but it also grants the European Commission the competence to determine whether or not an emergency exists (article 2(7) CSA).
Belgium’s Central Stockholding Entity is the Agence de Pétrole - Petroleum Agentschap (APETRA) which was established as a public limited company by the 2006 CSA (articles 5(1), 17 CSA). APETRA is now solely responsible for meeting Belgium’s stock holding obligations (cf. article 21(1) CSA). The operating costs of APETRA are borne by oil companies (who have to pass on this cost to customers (article 18(2) CSA)) in proportion to the quantity of oil products each company releases to the market (article 18(1) CSA).
According to article 3/1(1) CSA the quantity of emergency stocks must at least be equal to the largest of the following two quantities: 90 times of the daily average of the previous year’s net imports or 61 times the daily average of the previous year’s inland consumption. At least one third of emergency stocks must be held in of key products (article 3/1 (4)CSA) – oil products of which the crude oil equivalent of the domestic consumption for the previous year constituted at least 75 per cent of the total domestic consumption (article 2(24)CSA). The Energy Minister informs APETRA at the latest by 31 March of each year of the quantities of particular key products APETRA is obliged to hold (article 6(2) CSA).
The CSA provides for the possibility of APETRA holding specific stocks (article 6/1 CSA).
Availability of stocks
Emergency stocks must be available and physically accessible at all times (article 9(2) CSA). No more than 60 per cent of the stocks held by APETRA can be crude oil (article 5(4) CSA) and in a supply crisis APETRA must be able to ensure that the crude oil it holds can be transformed into finished products within 30 days (article 5(4) CSA). Further, article 5(8) CSA provides that stored oil products and bio-fuels must be available within 7 days in an emergency (article 5(8)(1) CSA) and within 30 days in the case of semi-finished products and crude oil (article 5(8)(2) CSA).
When deciding where to store stocks APETRA shall give preference to stocks located on Belgian territory (article 7(1) CSA).
Very generally, articles 2(1-4) LAA stipulate that measures may be taken concerning demand restrains measures (article 2(1) LAA), concerning the (re-)allocation of oil (article 2(2) LAA), concerning regulations governing the use of oil emergency stocks (article 2(3) LAA) and concerning the establishment of a list of priority consumers (article 2(4) LAA). Furthermore, article 3 LAA envisions that detailed norms concerning oil emergency measures shall be set out in a “crisis manual” to be published online by APETRA and the ‘Federal Public Service Economy, SMEs, Middle Classes and Energy’.
The Royal Decree of December 2018 establishes the National Petroleum Bureau, which is the Belgian National Emergency Strategy Organisation (NESO).
According to article 4(4) CSA, the Energy Minister is entitled to decide to temporarily use part of the compulsory emergency stocks. Further, the Energy Minister may authorise a temporary reduction of emergency stocks (article 4(5) CSA). If APETRA stocks are distributed they must be sold at market prices (article 4(6) CSA). The Royal decree of 5 February 2019 details how the compulsory emergency stocks will be deployed in an international and national crisis situation.
According to article 2(1) LAA, which refers explicitly to article 5 IEP, demand restraint measures may be implemented in response to an oil supply emergency.
Belgium’s emergency regime is monitored and enforced on the domestic, regional and international level. Each will be considered in turn.
APETRA is obliged to inspect its own stocks on a continuous basis (article 5(5) CSA). Further, APETRA must inform the ‘Federal Public Service Economy, SMEs, Self-Employed and Energy’ of the location, the quantity and the composition of the emergency stocks held (article 15(2) CSA).
The ‘Federal Public Service Economy, Small-Medium Enterprises (SMEs), Self-Employed and Energy’ is in turn obliged to keep the European Commission informed concerning the kind and quantity of emergency stocks held by Belgium (article 15(1/1-1/2) CSA).
During an oil supply emergency, the implementation of emergency measures is overseen by the National Bureau of Petroleum (article 2(2) LAA). The Royal decree of 19 December 2018 uptakes the composition, missions and tasks of the National Oil Bureau. In principle, the enforcement of LAA measures is delegated to the judicial police and the ‘Federal Public Service Economy, SMEs, Middle Classes and Energy’ (article 4(3) LAA; article 16(1) CSA). Article 4(4) LAA further empowers officials to search and access buildings in pursuit of their official duties during business hours (cf. article 16(1) CSA). Further, the CSA also authorises persons mandated by the European Commission to inspect emergency stocks (article 15(1) CSA).
Article 4 LAA allows for the imposition of criminal sanctions for infringements of measures based on the LAA. Financial sanctions may not exceed EUR 25000 (article 4(1) LAA). For the purposes of the CSA, fines between EUR 100 and EUR 10000 are available for contravening some CSA provisions (article 45 CSA). Further, prison sentences (1 months – 1 year) can be imposed for infringements of article 18(1) CSA (concerning an oil company’s failure to contribute towards the operating expenses of APETRA) (article 45(2-3) CSA).
As a Member State of the European Union, Council Directive 2009/119/EC obliges Belgium 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.
Belgium’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).
As a Member of the IEA, Belgium is obliged, pursuant to article 2 of the Agreement on an 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.