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EU agrees plan to ration gas use over Russia supply fears
July 27, 2022
The EU has been forced to water down its plan to ration gas this winter in an attempt to avoid an energy crisis generated by further Russian cuts to supply.
Energy ministers from the 27 member states, except Hungary, backed a voluntary 15% reduction in gas usage over the winter, a target that could become mandatory if the Kremlin ordered a complete shutdown of gas to Europe.
After days of fraught negotiations, ministers agreed opt-outs for island nations and possible exclusions for countries little connected to the European gas network, which will blunt the overall effect in the event of a full-blown gas crisis.
The deal came less than 24 hours after Russia’s state-controlled energy firm, Gazprom, announced a steep reduction in gas supplies through the critical Nord Stream 1 pipeline from Wednesday. The head of the European Commission, Ursula von der Leyen, said there was “no justifiable technical reason” for the cut.
She has accused the Russian president, Vladimir Putin, of attempting to blackmail European countries for supporting Ukraine. Russia has cut or reduced supplies to a dozen EU countries.
“The announcement by Gazprom that it is further cutting gas deliveries to Europe through Nord Stream 1, for no justifiable technical reason, further illustrates the unreliable nature of Russia as an energy supplier,” Von der Leyen said. “Thanks to today’s decision, we are now ready to address our energy security at a European scale, as a union.”
EU officials hailed the agreement as a milestone for a united energy policy that recalled the leap in integration on health taken during the Covid pandemic.
Jozef Síkela, the Czech minister of industry and trade, who brokered the final deal, said: “I know the decision was not easy but I think at the end everyone understands that this sacrifice was necessary. We have to and we will share the pain,” he told reporters. He said the decision meant Europe could avoid “dramatic consequences in winter”, including price hikes.
The European Commission had suggested that a collective 15% gas savings target would reduce gas consumption by 45bn cubic metres. Once exemptions are taken into account the final tally will be lower, after a revolt led by southern European countries that use less or no Russian gas. A senior EU diplomat said the plan would not hit the 45bn cubic metres estimate in the event of a major supply crisis, but still added up to “significant reductions”.
But the backing for the plan was not unanimous. Hungary, which has already secured an opt-out from the EU’s embargo on Russian oil, was alone in voicing its opposition. Unusually for an EU energy ministers’ meeting, Hungary was represented by its foreign minister, Péter Szijjártó, who was given an award by Putin last November, only a few months before Russia’s invasion of Ukraine.
Hungary has backed EU sanctions against Russia but has blamed the measures for increasing prices for Hungarian drivers and households, a link strongly rebutted by Brussels.
Under the energy savings plan, all EU member states will strive to reduce gas consumption by 15% from August through to the end of March. In the event of a total shutdown of Russian gas or high demand, EU states can declare an energy emergency that triggers immediate mandatory savings. Member states rejected an attempt by the European Commission to decide when an energy emergency was under way, which would launch compulsory energy rationing.
Countries will be exempt from mandatory cuts if they are island nations unconnected to the EU gas network, a provision that applies to Ireland, Malta and Cyprus.
The Baltic states can also apply for an exemption because their electricity systems are linked to Russia, making them vulnerable to blackouts in the event of a Kremlin-ordered switch-off. The exemption is designed to protect the three former Soviet countries if they are forced to rely on gas to boost electricity supplies.
Member states can also ask for an exemption or reduced savings target if they are little connected to the European gas network and can send liquified natural gas to their neighbours, a provision that affects Spain.
Spain, with Portugal and Greece, led opposition to the uniform 15% target, arguing it was unfair and failed to take account of their national circumstances.
Arriving at the Brussels meeting, Spain’s minister for ecological transition, Teresa Ribera, said no one questioned the need for solidarity but the initial proposal was “not necessarily the most effective approach”. Her rejection of the proposal last week kindled memories of the eurozone crisis, when southern European member states faced strictures from Germany for falling into debt.
Turning the eurozone debate on its head, Ribera said Spain had “done our homework” by investing in infrastructure to boost supplies of liquified natural gas, comments that were widely seen as an implicit criticism of Berlin’s decades-long reliance on cheap Russian gas.
Critics complained the plans had been designed to help Germany, which has been accused of allowing itself to become dangerously dependent on Russian gas.
“Germany made a strategic error in the past with its great dependency on Russian gas and the faith that it would always flow constantly and cheaply,” said Germany’s vice-chancellor, Robert Habeck, who is responsible for energy. “But it is not just a German problem.”
France’s minister for energy transition, Agnès Pannier-Runacher, said the health of the whole European economy was at stake: “Our industrial chains are completely interdependent: if the chemical industry in Germany coughs, the whole of European industry could come to a halt.”