Estonia's legislation on oil security

According to article 1(1) LFSA, the LFSA’s emergency measures are triggered by a significant and sharp decrease in the supply of energy products to the EU or its Member State or to a Member country or Member countries of the International Energy Agency (IEA) which is accompanied by an effective international decision to release stocks. In urgent cases the LFSA’s provisions may also be utilised without prior permission of European Union (EU) or IEA authorities (article 7(7) LFSA).

Storage Agency

The entirety of Estonian stocks is managed by the government-owned Estonian Oil Stockpiling Agency (OSPA) (article 4 LFSA). However, in principle, OSPA may also delegate its stockholding obligation pursuant to deposit contracts with companies or other legal persons (article 5(6-7) LFSA). The OSPA is financed by the Estonian State and by importers and distributers of oil (articles 8, 9 LFSA). Among the main tasks of the OSPA is the analysis of the Estonian fuel market to ensure that the country is prepared for oil supply interruptions at all times (article 18 LFSA).

Storage Quantity

According to article 3(1) LFSA, the quantity of stocks stored must be equal to at least 90 days’ average daily net imports or 61 days’ average daily inland consumption of energy products whichever is greater. Additionally, the Estonian Government may decree that a certain quantity of stocks is held as specific stock (article 3¹(1) LFSA).

Availability of stocks

Article 5 LFSA stipulates that all stocks must be maintained in such a manner that their availability is ensured in times of emergency.

Storage Locations

The OSPA may either directly discharge its stockholding obligation or it may delegate its stockholding obligation up to a maximum of 20 per cent of the amount of stocks to be held (article 5(8) LFSA) to other corporations or legal persons (including other EU Members for example; cf. article 6 LFSA) pursuant to an agreement for delegated stocks (article 5(6-7 LFSA). Further, the OSPA may store Estonian stocks in its own facilities or it may transfer its stocks for storage to a company or other legal person pursuant to a deposit contract (article 5(3-4) LFSA).

Sale of excess stocks

The OPSA is entitled to sell excess stocks if the obligatory stockholding quantity is exceeded by more than 5 per cent (article 17(2) LFSA).

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

Domestic

Reporting duties

OSPA is obliged to keep and to continuously update an inventory of all the stocks it holds and that are generally maintained in Estonia (article 11(1) LFSA). A copy of the inventory must be submitted to the Ministry of Economic Affairs and Communications once a year by the 25^th of February (article 11(3) LFSA). Additionally, monthly reports must be submitted to the Estonian Statistical Office (article 11(5) LFSA). The same reports must be submitted to the European Commission if demanded (article 11(6) LFSA). Similar obligations apply to information concerning specific (article 11¹ LFSA) and commercial (article 11² LFSA) stocks.

In case Estonia decides to hold specific stocks the Ministry of Economic Affairs and Communications must transmit a corresponding notice to the European Commission containing details concerning the composition and quantity of the specific stocks held (article 3¹(8) LFSA).

Enforcement

Authorised Estonian officials are entitled to confirm the existence and to check the maintenance and renewal of stocks at all times (article 5(10) LFSA). Additionally, various sanctions are available within the framework of the LFSA. The unauthorised sale of liquid fuel stocks attracts fines of up to 3200 Euros (article 20 LFSA) and failure to comply with reporting obligations may lead to the imposition of a fine totalling up to 2000 Euros (Article 21(2) LFSA).

Regional

European Union

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

Estonia’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, Estonia 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.