EU's Top Court Rejects Nord Stream 2 AG Appeal, Upholds 2019 Gas-Pipeline Rules

The European Union’s highest court on Thursday rejected Nord Stream 2 AG’s final appeal against the bloc’s 2019 gas-market rule changes, leaving in place EU requirements for pipelines linking member states with non-EU countries. In a judgment delivered Nov. 5 in Case C-118/25 P, Nord Stream 2 v Parliament and Council, the Court of Justice of the European Union dismissed the company’s appeal and upheld a lower court’s 2024 ruling.

That means Directive (EU) 2019/692 remains in force as applied in the case. The amendment, adopted in April 2019 and in force from May 23 of that year, extended core EU internal-market gas rules to import pipelines connecting an EU country with a third country. Those rules include unbundling — separating gas supply from transmission ownership and control — as well as third-party access and transparency requirements. The law also allows, under certain conditions, time-limited derogations for pipelines completed before May 23, 2019. In a press release, the court said: “The Court of Justice dismisses the appeal and thus upholds the judgment of the General Court.” It added: “The rules challenged before the General Court therefore remain in force.”

The court backed the General Court’s view that applying common gas-market rules to third-country pipelines helps avoid a legal vacuum and creates a more consistent legal framework. It also rejected Nord Stream 2 AG’s argument that it was entitled to a transitional period or compensation based on legitimate expectations. According to the court, EU institutions had not given the company “precise, unconditional and consistent information” that the amended rules would not apply to it. The judges also upheld the unbundling requirement as an appropriate competition safeguard, saying it prevents a dominant gas supplier from controlling both supply and transmission, and found that Nord Stream 2 AG could not escape that obligation by pointing to its corporate structure.

The case was part of a long-running legal fight over the application of EU market rules to the Nord Stream 2 project. Nord Stream 2 AG, the company responsible for the pipeline, first brought its challenge in 2019 against the European Parliament and the Council of the European Union, the bloc’s two main lawmakers. After earlier litigation over whether the company could bring the case, the EU’s General Court on Nov. 27, 2024, rejected the action on the merits. Nord Stream 2 AG then filed this appeal on Feb. 5, 2025. Thursday’s ruling ends that appeal.

Nord Stream 2 AG is a Swiss-registered company that historically was wholly owned by Gazprom, the Russian gas giant, making the case closely tied to a major Russia-linked pipeline project. Nord Stream 2 was reported completed in September 2021, but German certification was not completed and the pipeline never entered commercial operation. Explosions in September 2022 damaged Nord Stream 1 and Nord Stream 2 in the Baltic Sea, further limiting the project’s practical prospects.

Even so, the court’s ruling carries clear legal weight beyond the pipeline’s immediate status. By dismissing Nord Stream 2 AG’s final appeal, the Court of Justice confirmed that the EU can apply key internal-market gas rules to the EU portions of pipelines connected to third countries, reinforcing the bloc’s authority to impose common competition and market-access standards on cross-border gas infrastructure.