Brussels is preparing to tell EU members to cut gas consumption “immediately”, warning that without increased protection the continent risks running out of fuel this winter as Russia cuts supplies.
The European Commission will next week provide members with voluntary targets for gas cuts, according to a draft document seen by the Financial Times, which warns that the targets will become mandatory in the event of severe supply disruptions.
“Joint action now will be less disruptive and costly, facilitating solidarity and avoiding the need for unplanned and uncoordinated action later in a possible crisis situation with depletion of gas reserves,” the document said.
The move comes after the International Energy Agency warned that efforts to diversify away from Russian gas are no longer enough on their own and that Europe faces an energy freeze unless demand is curbed to allow storage to be filled before winter.
Over the past month, Russia has reduced capacity on the main pipeline to Germany and the IEA fears further cuts cannot be ruled out. Fatih Birol, executive director of the IEA, said Europe was facing a “red alert” and that “significant further reductions” were needed to “prepare Europe for a severe winter ahead”.
Ursula von der Leyen, president of the European Commission, signed a supply agreement with Azerbaijan on Monday that will increase supplies to Europe by 48 percent this year and aims to double them by 2025, although Azeri imports make up only a small part of the total volume of the EU.
The Central Asian country is one of several, including Qatar, the US, Israel and Nigeria, being courted by the EU as it tries to secure alternatives to Russian supplies.
Italy is also on the verge of increasing supplies from Algeria, with Italian energy company Eni and France’s TotalEnergies and Occidental poised to sign a deal with Algeria’s Sonatrach on Tuesday for a new $4 billion gas development project that will eventually led to new supplies.
But the IEA, which serves as the West’s energy watchdog, said on Monday that efforts to increase supplies were not yet successful and the EU needed tougher measures, including curbing demand for air conditioners and auctioning gas supplies. for industry.
The commission’s draft document does not include exact figures, but they are expected to be finalized before the final release of the proposal on Wednesday.
The latest documents are revisions to a plan leaked last week that recommended limiting central heating and cooling in buildings, as well as exempting coal-fired power plants from emissions reduction targets.
Diplomats and EU officials have been engaged in negotiations over potential targets and how they would be met given the different energy mixes of different member states.
An EU official said talks are underway on what sanctions could be imposed if the targets become mandatory and are not met.
Europe previously relied on Russia for about 40 percent of its gas, but since Russia’s invasion of Ukraine, those supplies have been increasingly weaponized by Moscow in response to EU support for Kyiv.
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Russia has already stopped supplies to the Baltic states, Finland, Poland and Bulgaria and reduced flows to Germany and Italy.
In the draft plans, the commission noted that in June gas flows from Russia to the EU fell to less than 30 percent of the average between 2016 and 2021. Europe imported a total of 155 billion cubic meters of gas from Russia in 2021 and consumed nearly 400 billion cubic meters of gas in total in a normal year.
The leaked gas plan warns that continued cuts to Russian gas supplies could lead to a drop in EU GDP of up to 1.5 percent, depending on the level of disruption. The European Commission declined to comment.
Von der Leyen said in a speech in Baku that the EU should “diversify from Russia and turn to more reliable, trustworthy suppliers” and described Azerbaijan as a “crucial energy partner”.
The plan is for Azeri supplies to increase to 12 billion cubic meters this year from 8.1 billion cubic meters in 2021 and eventually reach “at least” 20 billion cubic meters by 2027, according to a memorandum. The fuel will arrive in the EU via the Southern Gas Corridor pipeline, a joint project between Brussels and Baku that opened in 2018 and is supplied mainly from gas fields in the Caspian Sea.
But despite the EU’s efforts to create a joint effort to buy gas, similar to the coordinated procurement of Covid vaccines, officials admitted it was competing in a narrow market where countries already have long-term contracts.
Additional reporting by Peggy Hollinger in London and Amy Kazmin in Rome
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