What has been agreed?
From next month until the end of March 2023, all EU member states will aim to voluntarily reduce their gas consumption by 15%. In the event of a major supply shock – a complete shutdown of Russian gas – the EU can declare a state of emergency and make the target mandatory with immediate effect. Three island states not connected to the EU gas network – Cyprus, Ireland and Malta – will be exempt from the mandatory energy savings. However, almost every Member State, especially those with little connection to the natural gas grid, or those facing electric shocks, will have the right to apply for an exemption.
How would it work?
EU governments can choose how to supply gas, as long as they protect supplies to households. Industrial users will feel the pinch first. factories could be given targets to reduce heating and cooling. Some could be spared, such as manufacturers of critical goods or facilities that are difficult to restart after a power outage. While consumers are protected, they are expected to do their part. EU authorities are urging governments to launch campaigns to encourage people to switch off lights and switch off thermostats and air conditioning. EU governments are being urged to speed up the transition to renewable energy, but are also being asked to consider delaying their exit from nuclear power or coal – an attempt to find any alternative to Russian gas. Member states must report to EU authorities in Brussels on their energy-saving plan every two months, a form of peer pressure intended to push them into action.
Why is the EU doing this now?
As the EU was in the final throes of negotiating the plan, Gazprom announced that a drastic cut in supplies through the critical Nord Stream 1 pipeline would take effect on Wednesday. The timing was coincidental but underlines why the EU is pushing to reduce its use of Russian gas. Graph Following Russia’s invasion of Ukraine, the EU decided to phase out Russian fossil fuels, which are important sources of funding for the Kremlin’s war effort. For many EU member states, ending the use of Russian natural gas will be painful. Before the invasion, Russia supplied 40% of the EU’s natural gas and 55% of Germany’s natural gas, although Europe’s largest economy has since reduced its dependence.
How is the block divided for the subject?
EU member states have very different energy mixes: some countries depended almost 100% on Russian gas, while others used none. Countries that used little or no Russian energy objected to making sacrifices for those that benefited from years of cheap fuel from their eastern neighbor. Map Spain and Portugal, which have little connection to the EU gas network, argued that the overall target of 15% was unfair. Ultimately, all countries in the bloc supported the plan except Hungary, where the government is a long-time Kremlin ally that reluctantly supports EU sanctions. France, Luxembourg and the Netherlands supported the original plan, fearing the financial ripples of a recession from the German economy.
How much energy will be saved?
If the EU reduced natural gas use by 15%, it would avoid using 45 billion cubic meters of fuel, according to European Commission estimates. Various exemptions reduce that total, but officials say that even if countries take full advantage of the exemptions, the plan would still see the EU in for an average cold winter. The 15% target, however, was designed to get the EU through a blindingly cold winter. Expect long-term weather reports to be scrutinized as closely as EU economic forecasts.
What happens next?
Winter 2022-2023 is expected to be difficult, especially if temperatures drop. But some fear that next winter could be even worse. EU gas storage levels are at 66%, but by the end of next spring they could be seriously depleted with fewer options to replace stocks. EU officials suggest the gap could be filled with pipeline gas from Norway and Azerbaijan, more liquefied natural gas delivered by tanker from as far away as the US, and efforts to reduce demand. The original gas-saving plan was to last two years, but EU governments reduced the scope to one year. The plan for winter 2023-24 has yet to be written.
