Launching an EU-wide passport for wholesale gas and electricity trading should be considered during an upcoming review of the EU’s new Regulation on Energy Market Integrity and Transparency (REMIT), according the Council of European Energy Regulators (CEER).
This could resurrect the idea of a single European trading licence, which did not survive in the final REMIT text.
CEER published its final advice on the EU-wide trading passport issue in light of the adaptation of the new REMIT regulation, which is expected to come into force in December.
The association wants national energy regulators to issue passports that could then be used to trade across Europe, scrapping all country-specific trading access regimes.
This would be the best way to break down entrance barriers, cut bureaucracy and level the playing field for energy traders, CEER said.

Current REMIT provisions
This advice goes beyond the provisions currently included in REMIT.
Under REMIT, the Agency for the Cooperation of Energy Regulators (ACER) will be responsible for updating a database on all trading companies active in the European wholesale market.
This would help regulatory oversight but not make it easier for individual companies to enter new markets.
Yet CEER said there was scope to broaden REMIT in the future to set up the EU- wide passports through the Recital 21.
This recital asks the European Commission, ACER and national regulators to review new instruments to “enhance the overall transparency and integrity of wholesale energy markets and to ensure a Union-wide level playing field for market participants” one year after setting up a database of the trading companies.
CEER said introducing the trading passport should be considered during this review.

Key points
The paper outlines five key recommendations to regulate wholesale trading:
1. All trading companies that are active on the market should be known to authorities, including the name of company, its field of activity and ownership.
2. All persons managing the trading company should be obliged to provide certain background information, for example, their criminal record.
3. If there is a fee for obtaining a trading licence, the price should be cost-based.
4. The application procedure and maximum duration of a trading licence should be standardised across Europe.
5. Trading companies should demonstrate their technical, financial and organisational capacity to fulfil all energy guidelines/regulations.

Next steps
CEER cautioned that the passport should only be introduced once ACER is ready to fulfil its monitoring tasks under REMIT and that the relevant provisions of the Markets in Financial Instruments Directive (MiFID) licensing regime should also be taken into consideration.
CEER acts as the lobbying organisation for Europe’s energy regulators, while ACER
carries out existing regulation.