EU countries urged to prepare for Russian gas cut: summit draft

EU leaders will meet in Brussels next week, with energy one of the key points of discussion [European Council]

EU member states need to step up preparations for a possible major disruption of Russian gas supplies, according to the draft conclusions of an EU summit meeting scheduled for Monday and Tuesday next week (30-31 May).

The draft conclusions, which are still likely to change before they are adopted, say there needs to be a coordinated European contingency plan for gas cut-offs, bilateral solidarity agreements and a quick filling of gas storage before next winter.

“Preparedness [for] possible major supply disruptions and the resilience of the EU gas market should be improved, in particular through swiftly agreeing on bilateral solidarity agreements and a coordinated European contingency plan,” reads the draft summit communiqué.

EU leaders are also expected to welcome the agreement found between EU negotiators on obligatory gas storage, which aims to have EU storage capacity at least 85% full by 1 November 2022.

The filling of gas storage before next winter should be accelerated, according to the draft, which can still be amended by EU leaders when they meet in Brussels next week.

EU clinches deal on mandatory gas storage for next winter

European Union negotiators on Thursday (19 May) agreed on mandatory gas storage obligations for EU countries, aiming for the the bloc’s storages to be at least 85% full by 1 November 2022.

Three EU countries have already been cut off from Russian gas supplies because they refused to pay for gas in roubles as mandated by the Kremlin. Poland and Bulgaria lost their supply in late April while Finland’s was cut on Saturday (21 May).

Because of concerns about further disruption and the impact this has had on already-high energy prices, Europe is looking to diversify its gas supply beyond Russia. The draft summit conclusions emphasise the short-term need to diversify supply sources and routes as well as secure Europe’s energy supply at affordable prices.

However, EU governments do not have full control over energy prices. Alternative supplies, like liquified natural gas (LNG) from the US, has historically always been more expensive than cheap pipeline gas coming from Russia.

To help countries leverage their bargaining power on global LNG markets, the EU has set up a joint gas purchasing platform, which is also open for Western Balkan countries and the three associated Eastern EU partners. The draft summit statement encourages EU countries to use of this platform ahead of the next winter heating season.

LEAK: EU countries urged to prepare for Russian gas 'supply shock'

In a policy document due to be adopted on Wednesday (18 May), the European Commission urges EU member states to step up preparations for a “full disruption of Russian gas supplies” by considering emergency measures like a temporary cap on gas prices.

Doubling down on renewables and energy efficiency

The draft summit conclusions also mention the need to increase renewable energy capacity and energy efficiency.

In line with the European Commission’s plan to ditch Russian fossil fuels, dubbed REPowerEU, EU leaders call for accelerating the deployment of renewables, improving energy savings and investing in infrastructure and interconnections.

Increasing the deployment of renewables “will require speeding up permitting of renewable projects and needs to be underpinned by an industrial cluster aimed at improving innovation, capacity, skills and supply chains for hydrogen, solar, wind, heat pumps and raw materials,” the draft summit statement says.

Improving permitting was a key focus of the REPowerEU plan presented last week. But EU countries have yet to sign off on the plan, which would considerably speed up slow and complex national procedures for approving new wind and solar farms.

The summit statement also calls for optimising the functioning of the EU electricity market “so that it is better suited to withstand future price volatility and [is] fully fit for a decarbonised energy system”.

EU tables €300bn plan to ditch Russian fossil fuels, speed up green transition

The European Commission submitted on Wednesday (18 May) a €300 billion plan to eliminate Russian energy imports by 2027, although it admitted this would require short-term investments in new fossil fuel infrastructure to replace imports of Russian oil and gas.

Russian oil ban still being discussed

Other language on renewables, energy efficiency and phasing out Russian fossil fuels are similar to conclusions already adopted by EU leaders in recent months.

For instance, the draft summit conclusions mention a review of the progress made to phase out the EU’s dependence on Russian fossil fuels, which leaders already committed to doing “as soon as possible”.

Missing from the draft conclusions though is the proposed EU-wide ban on the import of Russian oil. A proposal to this effect was tabled by the European Commission in early May, but EU leaders are yet to find an agreement on it.

All eyes will be on Hungary to see whether the country agrees to implement the oil ban. Hungary initially said it needed €750 million to adapt its oil refining and pipeline infrastructure to something other than Russian crude.

Last Monday (16 May), Budapest upped the price to €15-18 billion.

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

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.

[Edited by Frédéric Simon]

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