The Green Brief: Breaking up (with Russian oil) is hard to do

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When she tabled a proposal to ban all imports of Russian oil and refined petroleum products by the end of the year, EU Commission chief Ursula von der Leyen knew she would face resistance, if not outright opposition.

“Let us be clear: it will not be easy,” she said in a speech before the European Parliament in Strasbourg last Wednesday. “Some member states are strongly dependent on Russian oil. But we simply have to work on it.”

Those difficulties materialised quickly enough. Hungary and Slovakia were first to reject the plan and asked for a complete exemption from the embargo, even though they were offered a delay in meeting the objective.

The Czech Republic and Bulgaria soon followed suit and asked for special treatment. Days later, Bulgaria even threatened to veto the whole plan, which needs unanimous backing from the EU’s 27 member states before entering into effect.

Bulgaria’s concerns are genuine – the country’s only oil refinery in the Black Sea port of Burgas has been designed to process only Russian crude. Tweaking it to take oil from other suppliers would take both time and money.

But unlike Bulgaria, Slovakia, Hungary, and Czechia are landlocked countries – they simply cannot import oil by sea tankers and are entirely dependent on Soviet-era pipelines supplying them directly from Russia.

For Hungary to support the measures, oil transported through pipelines (rather than tankers) should be exempted from the embargo, said Hungarian Foreign Minister Péter Szijjártó.

The Hungarians have a point here. “It is not a question of lack of political will, it is not a question of intent, it is not a question of timespan, it is quite simply a physical, geographical and infrastructural reality,” according to Szijjártó, quoted in Telex.

Under changes made on Friday, Hungary and Slovakia would be able to buy Russian oil from pipelines until the end of 2024, and Czechia could continue until June 2024 if it does not get oil earlier via a pipeline from southern Europe.

Meanwhile, a proposed ban on EU tankers carrying Russian oil is likely to be scaled down after pressure exerted by Greece, Cyprus and Malta. However, insurance companies would continue to be banned from insuring those tankers under the EU’s proposed plans.

Frantic meetings took place at the ambassador level over the weekend and continued this week, with Ursula von der Leyen even making a surprise visit to Budapest – with no concrete results to show as of yet.

As often, the solution lies in new infrastructure backed with EU money. Under plans being considered in Brussels, the European Commission would offer landlocked EU states more money to upgrade and extend pipelines to deliver oil from other EU countries. It was still unclear whether that could be used to upgrade oil refineries in eastern countries, many of which can only process Russian oil.

Still, diplomats remained confident that a deal could be done. “There is no political blockage, but the need to guarantee alternative sources of supply to landlocked countries dependent on Russian oil by pipeline. And it is not easy,” a European diplomat told AFP. “These are new infrastructure and technological changes, which require not only European funding but agreements between several member states. We are making progress, but that automatically takes time.”

Among those, Budapest is requesting guarantees that Croatia will commit to building the new infrastructure and that the EU will provide funds for it.

None of these obstacles appear insurmountable. If a new pipeline is needed to end the dependency of central European countries on Russian oil, then it’s the EU’s duty to support them.

But in doing so, the European Union should also keep an eye on its Green Deal objectives. Like with gas, the EU’s ultimate goal is to break away from all fossil fuels – including oil. And this crisis also provides an opportunity to reduce oil use wherever possible.

The International Energy Agency has already made this clear, drawing comparisons with the 1970s oil shocks, which motivated many European countries to start becoming less dependent on oil.

According to the IEA, today’s crisis is also an opportunity to accelerate change, including technologies for regulating energy demand, sophisticated heating systems, highly fuel-efficient vehicles, electric cars, and advanced insulation for buildings.

“Now is the time to do all we can to pursue independence from Russian fossil fuels and, at the same time, address the pressing climate crisis,” wrote the IEA’s chief Fatih Birol in an opinion piece for EURACTIV. We couldn’t agree more.

– Frédéric Simon


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This week’s top stories

More stories:


News from the capitals

PARIS. EU states agreeing on Russian oil embargo ‘a matter of days’, says French minister. Member states could agree on a Russian oil embargo this week, European Affairs Minister Clément Beaune told news channel LCI on Tuesday. Read more.

BRATISLAVA. Zelenskyy understands Slovakia unable to cut Russian and oil gas supplies. Ukrainian President Volodymyr Zelenskyy said he understands that Slovakia cannot afford to immediately cut its Russian oil and gas supplies but warned of the country’s dependence in a speech before the Slovak National Council on Tuesday. Read more.

BUDAPEST. Hungary runs out of capacity, no new solar power plants. Hungary has run out of available grid connection capacity to connect weather-dependent power plants, disappointing Hungarian solar power developers and investors. Read more.

LJUBLJANA. Slovenia reintroduces fuel price caps. The Slovenian government has reintroduced the price regulation of motor fuels, a move that comes less than two weeks after previous price caps were lifted with the argument that the market had stabilised. Read more.

BELGRADE. Energy stability in Serbia must be defended, says minister. Serbia must defend its energy stability even if this would require a change in the ownership structure of the biggest oil company Naftna industrija Srbije (NIS), Energy Minister Zorana Mihajlović has said. Read more.

MADRID | LISBON. EU Commission approves Spanish-Portuguese plan to cap gas prices. The European Commission has given the green light to a Portuguese-Spanish proposal, also known as the “Iberian exception”, to cap gas prices on Monday, announced Portuguese Prime Minister António Costa, adding that both countries are working to pass national legislation on Tuesday. Read more.

BRATISLAVA. Another high-ranking Slovak politician backs gas payments in roubles. Sme Rodina member and Speaker of the National Council Boris Kollár is yet another high-ranking Slovak politician who says he supports paying Russia for gas in roubles. Read more.

BUDAPEST. No breakthrough on oil embargo after Von der Leyen’s surprise Budapest visit. Progress was made in efforts to convince Hungary to lift its veto on the sixth sanctions package that would see the EU quit Russian oil, European Commission President Ursula von der Leyen said after her meeting with Hungarian Prime Minister Viktor Orbán on Monday evening. Read more.

HELSINKI. Finnish energy companies refuse to supply ‘Russia’s Google’. Finnish electricity companies are refusing to sign electricity contracts with Russian search engine Yandex, which has a data centre near Helsinki, due to suspicions it may be distributing war propaganda. Read more.

PARIS. French politicians silent on EU’s oil embargo plans, fear Yellow Vests. French politicians are keeping quiet about the EU’s proposed embargo on Russian oil, most likely to avoid new tensions with the Yellow Vests movement, whose protests shook the country in 2018-2019. EURACTIV France reports.

ROME. Italy in trouble if Russia soon curbs gas supplies, says minister. Italy would be in trouble if Russia decided to curb its gas supplies to the country in the next few months, Ecological Transition minister Roberto Cingolani told Festival Città Impresa in an interview on Sunday. Read more.

MADRID. Spain becoming one of Europe’s new hydrogen hubs, says von der Leyen. Spain is becoming one of Europe’s new hydrogen hubs, said European Commission President Ursula von der Leyen during a press conference in Barcelona on Friday, adding that the country has always been a “front runner” in the NextGenerationEU plan. Read more.

SOFIA. Bulgaria threatens to veto EU oil ban on Russia unless it gets derogation. Bulgaria has threatened not to support the European Union’s new set of sanctions against Russia if the Balkan country does not get a derogation from the proposed ban on buying Russian oil, Deputy Prime Minister Assen Vassilev said late on Sunday. Read more.

BERLIN. Germany ready to help landlocked EU states access LNG, Scholz says. Germany will show solidarity with European Union countries seeking alternatives to Russian gas and oil, for example helping eastern states without ports in the North or Baltic Seas access liquefied natural gas (LNG), Chancellor Olaf Scholz said on Thursday (5 May). Read more.

BUDAPEST AND BRATISLAVA. Russia’s sixth sanction package opens EU’s Pandora’s Box. Hungary and Slovakia are unhappy with the European Commission’s proposal to ban Russian black gold despite being given extra time to phase it out, while Bulgaria and the Czech Republic have jumped on the bandwagon and are now asking for special treatment. Moreover, sources said Greece and Cyprus raised objections to another proposal to ban all shipping companies that are EU-owned or have European interests from transferring Russian oil into Europe or elsewhere in the world. Read more.

BERLIN. German industry backs oil embargo plans. Germany’s main industry associations have voiced clear support for the EU’s plans to impose a gradual Russian oil embargo, even though they said it would be a challenge. Read more.

WARSAW. Poland wants to become CEE’s main oil supplier, replacing Russia. Poland’s largest majority-state-owned oil company PKN Orlen says it can replace Russia as the main oil supplier for Central and Eastern Europe (CEE) as it has the infrastructure, the right suppliers, and enough fuel to ensure a continuous supply of oil to the region. Read more.

BUCHAREST. Romania ready to give up Russian oil. Romania supports the European Commission’s decision to phase out oil and petroleum products imports from Russia, Energy Minister Virgil Popescu has said. Read more.


News in brief

High gas prices inflate EU’s projected 2030 energy bill by €250 billion, research finds. What will the EU’s gas bill look like in 2030 based on current prices? This is the question that think-tank Ember and international NGO Global Witness tried to answer in a new report published today (11 May). 

Looking at the gas consumption figures in the EU’s ‘Fit for 55’ policy package, the research found that the projected gas demand for 2030 could cost Europe €250 billion more than the European Commission originally estimated. 

And while the Commission’s REPowerEU plan, presented in March, aims to eliminate the EU’s imports of Russian gas “well before 2030”, it would only cut the bloc’s overall gas bill by €47 billion, the research found. 

Instead, putting energy savings and renewable energy at the heart of the EU’s energy strategy could significantly reduce the EU’s 2030 energy spend, with savings of €123 billion at today’s high gas prices under a joint NGO energy scenario for 2030.

“Gambling on fossil gas is a losing bet. High and volatile gas prices are here to stay and will cost the EU dearly. The money is better spent on a transition that can bring stable, clean and affordable energy to all Europeans,” said Sarah Brown, a senior analyst with Ember. (Frédéric Simon | EURACTIV.com)

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CEOs support EU push to decouple from Russian gas and oil. More than 100 business organisations and CEOs including Microsoft, Unilever, H&M Group, Signify and Iberdrola, have expressed support for the EU’s aim to phase out dependence on Russian gas, oil and coal as a way of strengthening energy security and addressing the ongoing price crisis.

In an open letter to Commission President Ursula von der Leyen, they urged Europe to accelerate the energy transition in response to Russia’s invasion of Ukraine.

“At the core of the current energy security and price crises sits an overdependence on volatile, imported fossil gas, oil and coal,” says the letter signed by 114 business leaders, including multinationals and SMEs, as well as 26 business networks. 

“Measures taken in response to the invasion of Ukraine must prioritise structural and just solutions that can deliver on the green and digital transition and respond to the level of emergency that we face. […] This is the time to be bold and double down on delivering the Green Deal and achieve ‘rapid, deep and immediate’ cuts to carbon emissions as demanded by the IPCC,” they write. (Frédéric Simon | EURACTIV.com)


Opinions


Upcoming events

13 MAY. Media partnership: Can the EU foster a global green transition? The international implications of achieving the EU Green Dela. For the European Green Deal to succeed, the EU must foster sustainable economic systems and societal wellbeing across the planet. Positive system change is essential to avoid climate and environmental disaster, and the best chance of making it happen is through serious implementation of the European Green Deal (EGD) and the Sustainable Development Goals. At this launch event, the Open Society European Policy Institute, The Club of Rome and SYSTEMIQ will present the core findings and implications of their new report. An expert panel will then react to the report and discuss its consequences for European policy. Programme and registration here. (Organised by Open Society European Policy Institute, SYSTEMIQ and The Club of Rome)

17 MAY. Sustainable and healthy buildings – reaching the goals of the EU Green Deal. Join this EURACTIV Virtual Conference to discuss how the revision of the Energy Performance of Buildings Directive (EPBD) can support a healthy indoor climate while accelerating a decrease in energy costs and decarbonising our buildings. Speakers to be announced soon. Programme and registration here. (Supported by Velux).

17 MAY. A revised EPBD – faster decarbonisation of the EU’s building stock? Join this EURACTIV Hybrid Conference to discuss what can be done to improve the existing regulatory framework to support an effective decarbonisation process in the building sector. Speakers to be announced soon. Programme and registration here. (Supported by EdEn – Equilibre des Energies).

24 MAY. #EAPolitics Twitter chat | Debating Europe’s future IV – climate change, environment and health. The Conference on the Future of Europe has been launched to allow citizens from the 27 member states to discuss and suggest policy proposals through local events, panels, and an online platform, in order to shape the Future of Europe. EURACTIV took this opportunity to launch its “Debating Europe’s future” Twitter Chat. This last edition, which will tackle the “Climate change, environment and health” panel, following the citizens’ session. Details here.

14 JUNE. Does Germany need a new forest policy? Potential and problems of the forest strategy 2050. Germany is one of the most densely forested countries in Europe with forests making up almost 30% of the total area. Former agricultural minister Julia Klöckner put the 2050 forest strategy in place, which included the economic use of wood. With the new German government in place, must it revamp the forest strategy? Join MEP Ulrike Müller, DG ENVI’s Stefanie Schmidt, German MP Tessa Ganserer and the expert for forest ecology, Nicole Wellbrock, with additional speakers to be announced soon, to find out more. Programme and registration here. The event will be in German. (Supported by Life Terra)

15 June. Mind the gap – can biofuels play a strategic role in reaching EU energy and food security? Join this EURACTIV Hybrid Conference to discuss how the EU can maintain its commitment to achieving Fit for 55 climate and energy goals in an uncertain geopolitical situation. And what is the evolving role of low-carbon renewable fuels in achieving EU climate and energy goals. Programme and registration here. (Supported by ePURE).


On our radar

18 MAY. The European Commission will present its REPowerEU plan to break away from Russian fossil fuels, including:

  • And updated Renewable Energy Directive with a higher target for 2030 and faster permitting rules
  • A solar strategy that could make rooftop solar mandatory in all buildings (more)

This combines with a new “international partnerships and energy package”, consisting of:

  • A new strategy on international energy engagement
  • A joint Communication on a partnership with the Gulf

25-27 MAY. Meeting of G7 climate and energy ministers.

7 JUNE. Joint Communication on international ocean governance.

15 JUNE. 2022 Strategic Foresight Report.

22 JUNE. Nature protection package (tbc):

  • Sustainable use of pesticides – revision of the EU rules
  • Protecting biodiversity: nature restoration targets 

27 JUNE. Energy Council.

28 JUNE. Environment Council.

20 JULY. Circular Economy Package 2:

  • Policy framework for bio-based, biodegradable and compostable plastics
  • Review of the Packaging and packaging waste directive to reinforce the essential requirements for packaging and establish EU level packaging waste prevention measures and targets
  • Review of the Urban Wastewater Treatment directive
  • Proposal for a Regulation on substantiating environmental claims using the Product/ Organisation Environmental Footprint methods (green claims)

20 JULY. Development of post-Euro 6/VI emission standards for cars, vans, lorries and buses

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