On Tuesday, the European Union (EU) agreed to voluntarily cut its natural gas demand by 15% from August to March to “prepare for possible disruptions of gas supplies from Russia that is continuously using energy supplies as a weapon.” The reduction target is based on an average of the bloc’s gas consumption in the last five years.
In a press statement, the EU also mentioned that the bloc could trigger a “Union alert” in case of an emergency, making the gas cuts mandatory. However, the bloc has decided to exempt Malta, Cypress, and Ireland, as they are not interconnected with any other EU member’s network and therefore wouldn’t be able to release significant volumes to help others in a crisis. It has also excluded Balkan members from the resolution since they rely on gas for their electricity needs.
We will have to closely monitor developments and stay ready to do more if and when that becomes necessary.
— Frans Timmermans (@TimmermansEU) July 26, 2022
Further gas savings should start tomorrow: every day we wait to make these difficult but necessary savings, we increase the costs of facing a full-scale disruption.
The EU members can also request a reduced goal “if they have overshot their gas storage filling targets” or if their gas consumption has increased by at least 8% in the past year compared to the previous five years. Furthermore, the bloc will ensure that the gas reduction will not impact households and essential services, such as healthcare and defence.
“Adopting the gas reduction proposal in record time has undoubtedly strengthened our common energy security,” Czech Minister of Industry and Trade Jozef Síkela noted; the Czech Republic currently holds the rotating EU Presidency. “The winter will be much cheaper and easier for EU’s citizens and industry,” he added. Síkela also warned that a cut is necessary because Russian President Vladimir Putin “will continue to play his dirty games in misusing and blackmailing gas supplies.”
Never forget Russia is only capable of selling two things: oil and gas. And gas it can sell only to Europe. We stop buying, the country closes down
— Bruno Maçães (@MacaesBruno) July 27, 2022
This move comes against the backdrop of Russian state-owned energy company Gazprom’s announcing on Monday that it is reducing gas deliveries through the Nord Stream 1 pipeline down to 20% of its capacity from Wednesday onwards, adding that it was stopping the operation of one of the last two functioning turbines because of the “technical condition of the engine.”
Furthermore, one of its gas turbines is stuck in transit in Germany, which the Kremlin said would be returned and installed “sooner rather than later.” Kremlin spokesman Dmitry Peskov pointed out that the situation has been “seriously complicated by the restrictions and sanctions that have been imposed against the Russian Federation.”
In this regard, Ukrainian President Volodymyr Zelensky stated that “this is an overt gas war that Russia is waging against a united Europe,” calling for the need to strengthen sanctions against Moscow. “These are just different forms of terror. And that’s why it is necessary to hit back,” he remarked.
Gas embargo and energy resources diversification, sanctions against the entire RF banking system, tighter oil restrictions, stronger individual sanctions. More weapons for 🇺🇦 and complete isolation of RF by designating it a state sponsor of terrorism. Should do all of it.
— Andriy Yermak (@AndriyYermak) July 25, 2022
Meanwhile, European Commission President Ursula von der Leyen welcomed the EU’s decision, saying that “the EU has taken a decisive step to face down the threat of a full gas disruption by Putin.” She also noted that Gazprom’s latest declaration “further illustrates the unreliable nature of Russia as an energy supplier.”
Along the same lines, EU Commissioner for Energy Kadri Simson called Russia’s supply cut “politically motivated” and stated that it “underlined once again that we have to be ready for the possible supply cuts from Russia at any time.” In fact, following the bloc’s resolution, Simson noted in a statement that “we have a blueprint to act together, in a coordinated way, if the situation worsens.” “This was a test for the unity and resolve of the Union,” she declared.
The bloc’s gas storage capacity is currently 66% full. As per European Commission, the 15% reduction target would ensure that the EU could avoid using 45 billion cubic metres of gas, which would see the bloc through a cold winter. However, if the temperature drops further, gas reserves could be severely depleted by next spring. In this respect, Irish Environment Minister Eamon Ryan fears that 15% “will probably not be enough” considering Gazprom’s latest announcement.
Before the Russian invasion of Ukraine, Russia was responsible for supplying 40% of the EU’s energy needs. However, countries across the bloc have begun to diversify their energy portfolios. For example, France recently signed an energy deal with the United Arab Emirates, while Italy signed one with Algeria. Likewise, the bloc has signed a deal to double gas imports from Azerbaijan.
🔋 #TTE Energy | 👏 This was not a Mission Impossible! Ministers have reached a political agreement on gas demand reduction ahead of the upcoming winter.#EU2022CZ pic.twitter.com/XBnKuTs75W
— EU2022_CZ (@EU2022_CZ) July 26, 2022
Against this backdrop, even countries that have been historically reliant on Russia to meet the majority of their energy needs have welcomed the EU’s recent decision to ban 75% of Russian imports (and set a 90% target by the end of the year) as well as the 15% reduction target it issued yesterday.
For example, Germany, which relied on Russia for 55% of its energy needs prior to the war, has stated that it “made a strategic error in the past with its great dependency on Russian gas and faith that it would always flow constantly and cheaply.” Vice Chancellor and Minister for Economic Affairs and Climate Action Robert Habeck said after the latest EU announcement that the new reduction target shows the bloc’s unity in the face of Russia’s provocative behaviour, affirming, “You will not split us.”
the europeans have held together on 7 rounds of russian sanctions, despite significant economic hardship
— ian bremmer (@ianbremmer) July 27, 2022
they have unanimously welcomed ukraine as a candidate eu member
they’re very unlikely to break apart over a hard winter
Meanwhile, Hungary was the only EU member that objected to the bloc’s announcement, claiming that the “decree completely ignores the interests of Hungarian people.” “This is an unjustifiable, useless, unenforceable, and harmful proposal,” declared Hungarian Minister of Foreign Affairs Péter Szijjártó. Hungary, which is a traditional Russian ally, currently imports 65% of its oil and 80% of its gas from Russia. In fact, Szijjártó agreed to buy an additional 700 million cubic metres of Russian gas on his visit to Moscow last week.
Hungarian Prime Minister Viktor Orbán, whom Ukraine has declared as an enemy over his support for Putin, has previously stated that energy sanctions on Russia represent a “red line” for him.