The Green Brief: when to call a crisis a crisis

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As days and weeks go by, country after country is being cut off from Russian gas supplies for refusing to obey the Kremlin’s insidious “roubles for gas” scheme. Even those that do obey, are finding delivery slashed.

By now, Gazprom has stopped supplying Bulgaria, France, Finland, the Netherlands and Poland. Austria, Germany, Italy and Slovakia have all reported reduced gas flows in the past days.

Yet, EU politicians refuse to call the gas crisis by its name.

Amid an unprecedented energy crunch since the 1970s oil shock, the hesitance of EU governments to call a spade a spade evokes the imagery of the “This is Fine” cartoon where a dog sits at a table happily sipping his tea while the room around him is on fire.

Seeing this, Denmark, the Netherlands and Sweden have triggered early warnings, in line with the EU’s 2017 security of gas supply regulation (SoS regulation).

They add to a cacophony of early warnings sounded across Europe, which started with Italy on 27 February.

“We saved ourselves the trouble of having a fire brigade because we thought the fire risk was negligible,” said Siegfried Russwurm, president of the German industry association BDI. “Now everything is ablaze,” he said on Tuesday (21 June).

EU leaders have done their utmost to ensure Russian gas molecules keep flowing, with some utilities even embracing the awkward roubles payment scheme ordered by the Kremlin.

But this hasn’t stopped Gazprom from sticking to its “our product, our rules” doctrine and cutting supplies regardless.

Want to know how to boil a frog? If thrown directly into boiling water, it will jump out. But if the water is slowly brought to a boil, the frog will notice too late and boil to death.

Scarred by the Russian gas cuts in the late 2000s, the EU sought to have instruments in place the next time around. The EU’s aptly named SoS regulation created a three-level approach: 1) early warning, 2) alert and 3) emergency.

The first level involves the relevant natural gas companies and industry only. The alert level involves Member States at national or regional level in a situation where the market is still able to cope. The emergency level involves the EU and is triggered after all market-based measures have been implemented.

“Make no mistake,” said Robert Habeck, Germany’s vice-chancellor. With storage levels as low as they are, the gas supply situation could become “worse” than the impacts of the COVID-19 pandemic, he said on Tuesday (21 June).

Yet Germany remains hesitant to trigger the second level of alert, something Italy has been considering for days.

Paradoxically, the reason for Germany’s reluctance may lie in the country’s newly revamped energy security act. Once the “alert level” is triggered, the law allows energy companies to raise gas prices in order to prevent traders caught in long-term contracts from going bust.

With such emergency rules in place, Europe may soon end up feeling like a frog in a boiling pot.

– Nikolaus J. Kurmayer


This week’s top stories

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News from the capitals

ZAGREB: Croatian oil firm says no shortages expected, no Russian oil needed. Croatia’s oil and gas company INA, co-owned by the Croatian state and the Hungarian energy group MOL, denied media reports that the country is heading for petrol shortages due to the international sanctions against Russia. Read more

PRISTINA | BELGRADE. EU welcomes energy agreement between Kosovo and Serbia. An agreement signed between Kosovo and Serbia that will see Serbs in the north of Kosovo pay for electricity for the first time in 23 years has been welcomed by the EU’s chief diplomat Josep Borrell and the Commission. Read more.

BRATISLAVA. Gas supplies key to lower inflation says Slovak Central Bank. Double-digit inflation will continue in Slovakia until next year if the government does not cap rising gas prices, and if Russia stops gas supplies, then inflation will increase even more, Slovak National Bank estimates in a new prognosis. Read more.

HELSINKI. Finland to build world’s first factory producing regenerated fibre. Recycling and green transition took a step forward when a Finnish company announced its plans to build a factory re-using textile waste. Read more.

STOCKHOLM | COPENHAGEN. Sweden, Denmark face ‘serious’ gas shortages. Swedish and Danish energy authorities issued an‘early warning’ over gas shortages due to the reduced supplies of Russian gas on the European market. Read more.

SOFIA | ATHENS. Bulgaria, Greece to build hydrogen pipeline. State company Bulgartransgaz is working on several projects to connect hydrogen networks between Bulgaria and Greece, explained Executive Director of Bulgartransgaz Vladimir Malinov during the Sofia Economic Forum III, adding that it is necessary for energy security. Read more.

ZAGREB. Croatia eyes major upgrade of Adriatic LNG terminal, PM says. Croatia plans to upgrade the capacity of its floating Liquified Natural Gas (LNG) terminal from the current 2.9 billion cubic metres per year to 6.1 bcm, Prime Minister Andrej Plenković announced at Three Seas Initiative in Riga on Monday. Read more

BUCHAREST. EU Commission approves Romania’s green scheme. The Commission approved a €500 million scheme to support the growth of new forest areas, a part of Romania’s strategy to ensure the protection of forests and biodiversity. Read more.

BRATISLAVA. Gazprom lowers gas exports to Slovakia despite roubles payment. Russian energy giant Gazprom cut gas exports to Slovakia by half over the weekend, with lower exports continuing on Monday, gas supplier SPP announced. Read more

ROME. Italian regions to declare state of calamity over drought. The Lazio region announced the forthcoming adoption of a drought state of calamity on Monday and the Po valley’s regions are considering doing the same as Italy faces its worst drought in 70 years. Read more

THE HAGUE. Dutch to focus on coal to save gas for winter. The Netherlands will be using coal-fired power plants over the coming months to store gas for the upcoming winter, Dutch News reports. Read more

VIENNA. Austria doubles speed of solar panel rollout. More than double the solar panel capacity of 2020 was installed in 2021, making the past year by far the Austrian solar industry’s best, the photovoltaic industry association said on Monday. Read more

BUCHAREST. Romania’s gas imports, production down this year. Less natural gas was imported in the first four months of 2022 than in the same period of last year, and local production has also dropped. Read more

BRATISLAVA. Slovakia considers rebuilding Druzhba pipeline to supply fuel to Ukraine. The Druzhba pipeline, through which Russian oil flows into the country, may be converted into a product pipeline to deliver fuel into war-torn Ukraine, Slovak Economy Minister Richard Sulík announced. Read more.

ROME. Italy considers ‘state of alert’ over Russian gas cut. Italy is considering moving to a state of alert to ration gas consumption and increase gas storage following Gazprom’s gas supply cut, Italian newspaper Corriere della Sera reported. Read more

HELSINKI. Finnish armed forces oppose building wind farms over defence concerns. More wind farms should not be built in Eastern Finland as wind turbines distract radar operations along the 1,300-kilometre-long land border with Russia, according to the Finnish Defence Forces. Read more.

THE HAGUE. Thousands march for climate in Rotterdam. Ten thousand protesters joined the climate march against global warming in Rotterdam on Sunday afternoon, Dutch media NL Times reported. Read more

VIENNA. Gazprom supplies 50% less gas to Austria. Austria will receive less gas for the fourth day in a row, the Russian energy company announced on Sunday, but demand is currently low, and supply is secure. Read more.

BERLIN. Berlin to launch ‘painful’ gas-saving scheme to secure next winter’s supply. The government will burn more coal over the summer, pay the industry not to use gas, and provide billions of euros in loans to merchants for gas purchasing after facing low gas flows from Russia. Read more

ROME. Draghi dismisses Russia’s reasons for gas supply cuts. Russia’s claims that gas supply cuts are due to maintenance are lies, and instead, the reasons for the shortage are political, Prime Minister Mario Draghi said in Kyiv on Thursday after Russian energy giant Gazprom announced another cut to Rome’s daily supplies. Read more

DUBLIN. Irish businesses to receive help to move away from fossil fuels. Dublin will help companies in Ireland move away from fossil fuels and towards more sustainable replacements with a fund worth €55 million. Read more

BERLIN. German agency considers saving gas by cooling homes. The president of the Federal Network Agency favours lowering the minimum temperature to which landlords must heat homes in winter, a proposal made by the national housing association after Russian energy giant Gazprom decided to reduce gas flows to Germany. Read more

LJUBLJANA. Slovenia to deregulate motorway fuel prices. Prices of motor fuels sold along motorways will be deregulated on 21 June as the country returns to a pricing model in force before October 2020, under which margins on petrol and diesel sold at service stations outside motorways are capped but prices at motorway service stations are not. Read more.

BUCHAREST. Romania receives first gas extracted from new Black Sea development. Romania received the first quantities of natural gas extracted from the Midia Gas Development (MGD), the first new offshore gas development in Romania in more than three decades. Read more

BELGRADE. Serbia eyes interconnector to bring Russian oil from Hungary. Serbia would be interested in building an interconnector with neighbouring Hungary because its northern neighbour gets its oil from Russia via the Druzhba pipeline, which is not under Western sanctions, Serbian President Aleksandar Vučić said on Wednesday. Read more.

ROME. Gazprom announces 15% gas cut to Italy. Russian giant Gazprom will cut its gas supplies to Italy by 15% due to the back-and-forth between Russia and Europe over energy supplies, the company said on Wednesday. Read more

MADRID. Historic heatwave hits Spain. The current heatwave gripping Spain is set to continue until at least the end of the week, with temperatures already reaching 43.2 degrees celsius, the country’s meteorological agency AEMET said on Wednesday. Read more.


News in brief

Europe can ditch fossil fuels by 2035 at no extra cost: study. A new report released today (22 May) by the energy think-tank Ember shows how Europe could ditch fossil fuels and quadruple growth in wind and solar capacity at no extra cost.

The ‘New Generation’ study aims at finding the cheapest pathways to 2050 that are compatible with the Paris climate goals and gives a detailed plan of how clean power can be achieved across all of Europe by 2035.

According to the study, Europe could adopt a more ambitious electrification strategy based on renewables, with an additional upfront investment of €300-750 billion. However, this would also save Europe an estimated €1 trillion by 2035, alongside benefits for climate, health and energy security.

“Scaling clean power is a win-win-win,” said Dr Chris Rosslowe, senior energy analyst at Ember. “It will save money, put Europe on track for its climate commitments and reduce its reliance on imported fossil fuels. Europe should invest now for a huge payback by 2035.” Read the full report here. (Valentina Romano | EURACTIV.com)

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Western Balkan coal pollution beyond legal limits, report shows. Western Balkan coal plants breached air pollution legislation under the Energy Community Treaty for the fourth year in a row, emitting five times as much sulphur dioxide and 1.8 times as much dust as allowed, a new report shows.

Last year, dust emissions from coal plants have risen beyond legal limits in Bosnia-Herzegovina, Kosovo, North Macedonia and Serbia despite new regulations introduced in 2018, according to the report ‘Comply or Close’, published on Tuesday (21 June) by CEE Bankwatch Network.

“Western Balkan governments are reacting to the energy crisis by opening new coal mines and delaying power plant closures, but with such antiquated plants, the end of coal is closer than they think,” observed Ioana Ciuta, energy coordinator at CEE Bankwatch Network. 

The energy crisis which affected the region at the end of 2021 has further diverted attention from pollution issues.

CEE Bankwatch Network calls for action from EU policymakers: “The European Commission must redouble efforts to introduce deterrent penalties into the Energy Community Treaty if it wants Western Balkan governments to take EU law and human health seriously,” said energy advisor Pippa Gallop. Read the full report here. (Valentina Romano | EURACTIV.com)


Opinions


Upcoming events

28 JUNE. Media partnership – GRIDTech 2022. Gathering a broad range of decision-makers and European energy stakeholders, the GRIDTech 2022 conference will be the occasion to assess the possible strategies and measures to support the key EU policy tasks. Join MEP Jerzy Buzek, Mechthild Wörsdörfer from the European Commission’s energy department, and more to discuss further. Programme and registration here. (Organised by Eurogas and GIE, technical partnership of ENTSOG, in media partnership with EURACTIV).

30 JUNE. Security of gas supply – what role for gas infrastructure? Join this EURACTIV Hybrid Conference where stakeholders will discuss the policy tools that can strengthen EU security of supply. Topics to be addressed include how gas supplies can be secured in the most efficient and sustainable way, what is the role of gas infrastructure, and what are the solutions to transport and store renewables and low-carbon molecules over long distances. Programme and registration here. (Supported by Gas Infrastructure Europe). 

12 JULY. Media partnership – Fit for 55: how can we REPower consumers for energy security and sustainability? The discussion will address critical policies that combine security of supply and an ambitious level of decarbonisation while putting energy end-users at the centre: what tools are available to consumers today to make habit changes stick; how non-residential buildings and industry could systematise good practice, move up the value chain, and access new services and new data? Join Commissioner Paula Pinho, Head of Unit at DG Energy, MEP Ciaran Cuffe, rapporteur of the Energy Performance of Buildings Directive (EPBD) revision, and more. Programme and registration here. (Organised by Schneider Electric, in media partnership with EURACTIV).


On our radar

22 JUNE. Nature protection package:

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

27 JUNE. Energy Council.

29 JUNE. 2022 Strategic Foresight Report.

28 JUNE. Environment Council.

5 JULY. New design requirements and consumer rights for electronics (tbc).

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

October-December (tbc). 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)

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