In some EU countries, unbundling of transportation and trading activities in the gas industry took longer than anticipated. A recent report of the European Commission (fourth benchmarking report) indicates that governments should do more to implement energy, i.e. gas market opening measures. In October 2004, 18 out of 25 EU countries had failed to respect the deadlines for implementation of the EU Gas Directives partly with regard to unbundling.

The European Gas Directive has put an obligation on DG TREN (Directorate-General for Energy and Transport) of the European Commission to prepare a detailed report on the internal gas market by 1 January 2006 (GD II, Article 31(3)). This report will, inter alia, provide a basis for potential changes to the unbundling and market opening provisions for the distribution sector.

The Commission invited all interested parties to make contributions to this process by end July 2005. In a parallel development, the EU Competition Directorate has started a wide ranging inquiry into the gas and electricity sectors. A provisional timeline suggests that a draft of this report will be available by end 2005 with the final report to be published sometime in 2006. One of the problems is insufficient integration between markets because of insufficient interconnection infrastructures and congestion not being handled satisfactorily.

Furthermore, full independence of transmission system operators and an adequate level of separation of distribution system operators have still not been achieved in several countries. Most of the non-EU countries have started the process of unbundling. For instance, Norway has fundamentally unbundled its gas industry, based on a model of its own. The offshore transportation systems are integrated and fully owned by producers together while operations are the responsibility of an independent company.

The United Kingdom unbundled its gas industry already more than 10 years ago. In many other countries the expectation is that unbundling will not have a direct effect on ownership, with the exception of the Netherlands, Spain and Italy.

It remains to be seen whether the unbundling of gas companies will have a negative effect on the development of supply security. This negative effect could be caused by less synergy, lack of coordinated planning and higher investment costs as a consequence of lower financial risk ratings.