The Court of Justice of the European Union (CJEU) dismissed Nord Stream 2 AG’s appeal against the dismissal of its action and upheld the decision of the General Court of the European Union (CJEU, judgment of 5 November 2026 – C-118/25 P). The contested provisions of EU law, which extended certain rules governing the internal market in natural gas to transmission pipelines from third countries, therefore remain in force.
EU Requirements for Gas Pipelines from Third Countries
Nord Stream 2 is a gas transmission pipeline connecting Russia with Germany through the Baltic Sea. The European Union amended its gas market rules in 2019. Since then, these rules have also applied to gas transmission pipelines between a Member State and a third country, including pipeline sections in the territorial sea of a Member State.
The amended provisions concern, in particular:
- Gas supply and the operation of gas transmission networks must be unbundled.
- Third parties must be granted access to gas transmission pipelines subject to the applicable conditions.
- Certain transparency requirements apply to their operation.
- Under specified conditions, Member States may grant derogations for gas transmission pipelines completed before 23 May 2019.
Nord Stream 2 AG, which is responsible, among other things, for operating the gas transmission pipeline, challenged these amendments. The proceedings concerned Directive (EU) 2019/692 of 17 April 2019 amending Directive 2009/73/EC.
Course of the Proceedings Before the EU Courts
Action Initially Dismissed as Inadmissible
The General Court of the European Union (General Court) initially dismissed Nord Stream 2 AG’s action as inadmissible. The Court of Justice set aside that decision by judgment of 12 July 2022.
Following that decision, the action was admissible insofar as it concerned the amended provision on derogations for gas transmission pipelines completed before 23 May 2019. The Court of Justice referred the case back to the General Court for a decision on the merits to that extent.
Action Dismissed on the Merits
By judgment of 27 November 2024, the General Court dismissed the action on the merits. Nord Stream 2 AG appealed against that judgment in Case C-118/25 P. The language of the proceedings was English.
In addition to the European Parliament and the Council of the European Union, Estonia, Latvia, Lithuania and Poland, as well as the European Commission, participated in the appeal proceedings. In the event that the Court of Justice considered the state of the proceedings to permit final judgment, Nord Stream 2 AG requested that Directive (EU) 2019/692 be annulled in its entirety.
No Binding Effect Regarding Unequal Treatment
The Court of Justice first clarified the scope of its judgment of 12 July 2022. That earlier decision concerned solely the admissibility of the action.
At that time, the Court of Justice had examined whether Nord Stream 2 AG could benefit from the derogations introduced by the amendment of the legal framework. By contrast, it had not examined whether the company had been treated differently from other operators of gas transmission pipelines.
According to the present decision, the 2022 judgment therefore did not oblige the General Court to examine a possible justification for unequal treatment compared with other pipeline operators.
Requirements for the Protection of Legitimate Expectations Not Met
No Sufficiently Specific Assurances
According to the findings of the Court of Justice, the institutions of the European Union had not provided Nord Stream 2 AG with precise, unconditional and consistent assurances indicating that the gas market rules would continue not to apply to it.
On the contrary, for many years there had already been numerous indications that the provisions concerned could be extended to gas transmission pipelines from third countries in general and to Nord Stream 2 in particular.
The Court of Justice therefore rejected Nord Stream 2 AG’s argument that, on the basis of the principle of the protection of legitimate expectations, the General Court should have granted it a transitional period or compensatory arrangements.
Complete and Coherent Legal Framework
The Court of Justice also upheld the General Court’s assessment that applying common gas market rules to pipelines from third countries can prevent a regulatory gap and enhance the coherence of the legal framework. This concerns gas transmission pipelines running through the territorial waters of a Member State.
In this regard, the General Court had reasoned that the essential principles of the regulatory system are reflected in several international agreements. These are agreements concluded either by the European Union or by individual Member States with third countries. In addition, these principles are systematically applied to onshore gas pipelines between Member States and third countries.
Unbundling Intended to Prevent Distortions of Competition
Separation of Transmission and Supply
A further point of dispute concerned the obligation to unbundle the transmission network and its operator. The Court of Justice confirmed that this obligation is capable of contributing to safeguarding free competition.
Unbundling is intended to prevent dominant gas suppliers from abusing their position by operating simultaneously in the transmission and distribution sectors.
According to the Court of Justice, this is not altered by the fact that a request by a third party for connection to Nord Stream 2 AG’s gas transmission pipeline may be unlikely.
Access Also Includes Transmission Capacity
The obligation to grant third-party access applies to both existing and future access requests. With regard to the section of a gas transmission pipeline falling within the territorial scope of EU law, this right is not limited to connection to the pipeline. Rather, it also includes access to its transmission capacity.
Ownership Structure Does Not Justify an Exemption
According to the decision of the Court of Justice, Nord Stream 2 AG’s ownership structure likewise does not justify exempting the company from the unbundling obligation. Such an interpretation would deprive the obligation of its practical effectiveness.
The Court of Justice therefore dismissed the appeal. The General Court’s judgment of 27 November 2024 dismissing the action on the merits remains in force. Consequently, the contested provisions extending certain rules governing the internal market in natural gas to gas transmission pipelines from third countries also continue to apply.
Significance of the Appeal Decision
An appeal against a judgment or order of the General Court is limited to points of law and, as a rule, does not have suspensory effect. If the appeal is admissible and well founded, the Court of Justice sets aside the contested decision. It may itself give final judgment where the state of the proceedings so permits; otherwise, it refers the case back to the General Court, which is bound by the decision on the appeal.
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