Econostrum | Economic News in the Mediterranean

EU member states agree on plan to reduce gas consumption

Written by Frédéric Dubessy on Thursday, July 28th 2022 à 15:40 | Read 357 times

26 of the 27 EU Member States are ready to reduce their gas demand by 15%... if necessary (illustration: European Commission)
26 of the 27 EU Member States are ready to reduce their gas demand by 15%... if necessary (illustration: European Commission)
EU. The Council of the European Union succeeded on Tuesday 26 July 2022 in Brussels in getting the energy ministers of the Member States to adopt a project concerning a coordinated reduction in their gas consumption proposed by the European Commission.

"Europe must reduce its dependence on Russia as soon as possible", argued Jozef Sikela. The Czech energy minister, whose country holds the rotating presidency of the Council of the European Union from 1 July 2022, also said before this meeting, "unity and solidarity are the best weapons we have against Putin, and I am sure that this is what we will show today".

A few days ago, the European Commission called for a 15% reduction in European gas demand compared to the average of the last five years over the same period, starting in August 2022. The text adopted on Tuesday 26 July 2022 has been substantially modified from the original draft in order to gain the approval of twenty-six out of twenty-seven Member States. Hungary is the only exception. The agreement had to take account of "different issues", as Kadri Simson, European Commissioner for Energy, pointed out before the meeting.

Exemptions for several countries

There was indeed a lot of reluctance among the Europeans, forcing extensive negotiations. Several Mediterranean countries (Cyprus, Spain, France, Greece, Italy, Malta and Portugal), some of which are islands and therefore not interconnected to the gas networks of other countries, and others which have exceeded their gas reservoir filling targets, have obtained exemptions. Ireland (not interconnected), the Baltic States and Belgium also obtained exemptions.

Most of them had refused the first proposal to reduce European gas demand by 15% from August 2022. Several voices were then heard to reject this text, notably that of Hungary, but also of France. Although Paris finally voted in favour, Budapest is still formally opposed. Peter Szijjarto, the Hungarian Foreign Minister, spoke of "an unjustifiable, useless, unworkable and harmful proposal that completely ignores national interests".

The new version therefore decrees more modestly that each country should "do its utmost" to reduce its gas consumption between August 2022 and March 2023 by at least 15% compared to the average of the last five years over the same period.

However, it provides that "in the event of a risk of a serious shortage" an alert mechanism would make the 15% reduction "binding" on all Member States. "The possibility of declaring a European alert state leading to compulsory reductions in gas consumption in all Member States is a strong signal that the EU will do everything in its power to ensure its security of supply and protect consumers, be they households or industry," commented Ursula von der Leyen, President of the European Commission. This measure mainly satisfies Germany, which was the first to support its project. At the beginning of June 2022, Russia was still supplying 35% of its gas exports, compared with 55% before the conflict in Ukraine.

It should be noted that it is the Council of the European Union that will trigger this alert, and not the European Commission as foreseen in its proposal.

"A decisive measure"

In a press release published on the evening of Tuesday 26 July 2022, the President of the European Commission referred to "a decisive measure to face the threat of a total interruption of gas deliveries by Putin". According to Ursula von der Leyen, "the EU has laid a solid foundation for an indispensable solidarity between the Member States in the face of the Russian president's energy blackmail".

This compromise comes at a time when Gazprom, the Russian giant, indicated on the same day that it was going to reduce its gas deliveries to 33 million cubic metres per day, i.e. about 20% of the Nord Stream pipeline's capacity, from Wednesday 27 July 2022. Its leaders cite maintenance work on a turbine as the reason. In 2021, Russia accounted for about 40% of the EU's gas imports.

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