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EU CSO Directive

The Council Directive 2009/119/EC was approved on 14 September 2009 to be transposed into Member States legislation by 31 December 2012.
According to the Directive, Member States are required to hold minimum stocks of crude oil and petroleum products in order to ensure oil supply in case of emergency.
The Directive lays down rules to be followed by Member States and economic operators to deal with obligations and put in place the necessary procedural means to cope with shortage of supply.

1
Stockholding obligations
Each member state should hold at all times minimum oil stocks equal to the greater of 90 days of average daily net imports or 61 days of average daily inland consumption, calculated on the basis of the previous calendar year.

The average daily net imports are to be calculated on the basis of the method explained in Annex I of the Directive, while the procedure for calculating average daily inland consumption is given in Annex II. Annex III lays down the procedure for calculating stock levels.

Member States must ensure that emergency stocks are always available and physically accessible.
2
Specific stock
Each Member State is invited to commit to maintaining specific stocks directly or through the CSE set up by it. Specific stocks shall be composed of a restricted list of petroleum products indicated in the Directive.

Member States shall ensure that in total, for the reference year, the crude oil equivalent of the quantities consumed of products included in the categories used is at least equal to 75 % of inland consumption.

If there is no commitment to maintain at least 30 days of specific stocks, Member States shall ensure that at least one third of their obligations is held in the form of products, under the conditions laid down by the Directive.
3
Central stockholding entity
In order to maintain stocks, each Member State may set up a central stockholding entity (CSE), in the form of a non-profit making body or service. The CSE shall maintain oil stocks, including acquisition and management of these stocks. Under the conditions and limitations laid down by the Directive, CSEs and Member States may delegate part of the management of stocks to another Member State with stocks on its territory, to the CSE set up by the said Member State or to economic operators.
4
Right to delegate
Economic operators who are imposed to hold minimum stocks are given the right to delegate at least part of their obligations to:

  • One or more CSEs that have expressed a wish to maintain such stocks
  • Other economic operators which have surplus stocks, arranging leasing agreements (CSO tickets)

Delegations need to be communicated to and approved by

  • The Member State on whose account stocks are held
  • Member States within whose territories the stocks will be held in case of international arrangements

Sub-delegation is not permitted. This means that the “receiving” entity is not allowed to further delegate CSO tickets.
5
Emergency procedures
Member States must be able to release all or part of their emergency stocks and specific stocks if required. Contingency plans should be developed and emergency procedures must be in place in the event of major supply disruptions. Specific rules also apply according to whether or not there is an effective international decision to release stocks.
6
Reporting
A register containing information on emergency stocks (the location of the depot, refinery or storage facility, the quantities involved, the owner of the stocks and their nature) should be established and continually updated. A summary copy of the register shall be sent to the European Commission once a year.