The European Commission is proposing new measures so that member states are better prepared for winter, when their energy needs are higher. It comes after Gazprom claimed it could not fulfill gas contracts with Europe.
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European countries will reportedly have to quickly curb their natural gas consumption as part of a broader plan to deal with reduced supplies from Russia.
The European Commission, the EU’s executive body, is due on Wednesday to present a plan for countries to prepare for the winter period, when their energy needs are much higher.
The plan comes as Russian energy giant Gazprom claims it cannot fulfill gas contracts with the bloc – a major headache for European nations given that they were so dependent on Russian energy before the invasion of Ukraine.
An EU official, who did not want to be named because the plan is still being finalized, told CNBC on Monday that one of the “most controversial” elements of the proposal was the gas reduction targets.
Confirming details from a draft document seen by the Financial Times, the official added that the idea was likely to be controversial because different EU member states have different energy needs, meaning it is, for example, harder for Germany, one of the most major importers of Russian energy to reduce gas consumption by, for example, 5% compared to Spain.
The European Commission declined to comment on the plan before its publication.
The Financial Times reported on Monday that Brussels will tell EU countries to cut gas consumption “immediately” and that gas reduction targets will become mandatory in the event of a major disruption to gas flows.
The European Union is preparing for a possible complete suspension of gas supplies from Russia as a result of Moscow’s offensive in Ukraine. However, the level of preparedness appears to be increasing as concerns grow that Russia will indeed significantly reduce flows to Europe or even end them altogether.
The Nord Stream 1 pipeline – a key transit point for Russian gas to Europe – is closed for repairs until July 21. However, many European officials are skeptical that flows will resume at full capacity.
Gazprom, the Russian energy giant, said on Monday it could not fulfill gas contracts with Europe due to unforeseen circumstances. German energy company Uniper rejected Gazprom’s argument.
This latest development added to earlier fears that Russia was close to a complete shutdown of gas supplies to Europe after flows were already down 60% last month.
“Russia is stepping up its commodity war against Europe by freezing Nord Stream 1 gas supplies,” Velina Chakarova, director of Austria-based think tank AIES, told CNBC.
She added that this move by Russia “should be seen as a harbinger of a full gas embargo before the winter season, as European storage capacities are not filled to the required extent and the governments of European countries heavily dependent on Russian gas supplies will are under enormous economic pressure.”
European economies already face a bleak economic outlook with inflation at record levels and growth suffering from persistent downward corrections. Much of this economic reality is caused by the energy crisis, greatly exacerbated by Russia’s war in Ukraine.
The forthcoming plan to prepare for winter comes as the Commission also steps up gas deals with other parts of the world. On Monday, it announced a new agreement with Azerbaijan and has previously signed deals with the United States.
European Energy Commissioner Kadri Simson said in June that the gas filling level was above 56%, but some member states needed to make more progress in the coming weeks to improve their capacity levels. Back in March, the commissioner called for a minimum storage target of 80% by November 1.
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