European Union seals deal on reducing gas use as Russia squeezes supply
- Energy ministers approved a proposal for all EU countries to voluntarily cut gas use by 15 per cent from August to March
- The bloc has been urged to save gas and store it for winter as it braces for further Russian reductions in supply through the Nord Stream 1 pipeline
European Union countries approved a weakened emergency plan to curb their gas demand on Tuesday, after striking compromise deals to limit the cuts for some countries, as they brace for further Russian reductions in supply.
Europe faces an increased gas squeeze from Wednesday, when Russia’s Gazprom has said it would cut flows through the Nord Stream 1 pipeline to Germany to a fifth of capacity.
With a dozen EU countries already facing reduced Russian supplies, Brussels is urging member states to save gas and store it for winter for fear Moscow will completely cut off flows in retaliation for Western sanctions over its war with Ukraine.
Energy ministers approved a proposal for all EU countries to voluntarily cut gas use by 15 per cent from August to March.
The cuts could be made binding in a supply emergency, but countries agreed to exempt numerous countries and industries, after some governments had resisted the EU’s original proposal to impose a binding 15 per cent cut on every country.
Gazprom to cut Nord Stream gas deliveries to Europe
German Economy Minister Robert Habeck said the agreement would show Russian President Vladimir Putin that Europe remained united in the face of Moscow’s latest gas cuts.
“You will not split us,” Habeck said.
Hungary was the only country that opposed the deal, two EU officials said.
Germany, the EU’s economic powerhouse, is hugely dependent on Russian gas and remains at the mercy of the supply from Gazprom for the years still needed to find alternative sources.
“It is true that, Germany with its dependence on Russian gas, has made a strategic mistake but our government is working … to correct this,” Habeck said.
France said showing solidarity with Berlin would help in turn protect all of Europe, even though Germany takes a major share of the 40 per cent of EU gas imports that came from Russia last year.
“Our industrial chains are completely interdependent: if the chemical industry in Germany coughs, the whole of European industry could come to a halt,” said French minister for energy transition, Agnes Pannier-Runacher.
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European Commission President Ursula von der Leyen welcomed the move, saying in a statement that “the EU has taken a decisive step to face down the threat of a full gas disruption by Putin.”
Russia’s Gazprom has blamed its latest reduction on needing to halt the operation of a turbine – a reason dismissed by EU energy chief Kadri Simson, who called the move “politically motivated”.
Russia said it is a reliable energy supplier. It has also said the invasion, begun on February 24, is a “special military operation”.
The EU deal would exempt from the binding 15 per cent gas cut countries such as Ireland and Malta that are not connected to other EU countries’ gas networks.
News of the latest reduction to Russian supply has driven gas prices higher, adding to the cost of filling storage, while creating incentives to use less.
Early on Tuesday, the benchmark front-month Dutch contract rose almost 10 per cent and is more than 450 per cent higher than a year ago, although down from record highs touched soon after Russia began its invasion of Ukraine.
Putin warns EU that gas supplies could keep dwindling
Countries that meet an EU target for filling gas storage by August could face weaker targets – softening the cuts for roughly a dozen states, including Germany and Italy, based on current storage levels.
They can also exempt the gas they use in critical industries, such as energy-intensive steelmaking, from the target.
In addition, those with a limited ability to export gas to other EU countries can request a lower target, provided they export what they can. That could include Spain, which does not rely on Russian gas, and has said cutting its own demand would not help other countries since it lacks infrastructure capacity to share spare fuel.
“Everyone understands that when someone asks for help, you have to help. Help can be in different ways, but I believe that the spirit of collaboration will prevail,” Spanish Energy Minister Teresa Ribera said on Tuesday.
The EU plan has tested countries’ solidarity, with Greece and Poland among the countries opposed to mandatory gas cuts.
Polish Climate Minister Anna Moskwa said the deal would impose no constraints on Poland’s gas use, and opposed the idea that a country should curb its industrial gas use to help other states facing shortages.
Some EU diplomats raised concerns that the number of opt-outs in the final regulation may mean it fails to ensure countries save enough gas for winter.
Although governments including Germany have upped their energy saving measures, EU countries have reduced their combined gas use by only 5 per cent, despite months of soaring prices and dwindling Russian supplies.
“Fifteen per cent will probably not be enough given what the Russians have just announced,” Irish Environment Minister Eamon Ryan said.
The deal requires backing from a majority of countries to trigger the binding gas cuts, after many opposed the Commission’s original proposal that it have the final say.
