By Sardar Khan Niazi
The war in Ukraine has pressed the 27-nation bloc to change its energy policies. European Union governments have agreed to ration natural gas this winter to shield themselves against any more supply cuts by Russia.
Based on a proposal sometime back from the European Commission, the EU’s executive arm, the ministerial agreement was prepared and approved in less than a week.
Overpoweringly keen to uphold a common EU front over a war that displays no signal of ending, the commission said in time rationing would facilitate the bloc, as a whole to get through the winter should Russia halt all gas deliveries
Czech Industry Minister Jozef Sikela, whose policy portfolio includes energy, says that the winter is coming and we do not know how cold it will be.
EU energy ministers certified a draft European law intended to lower demand for gas by 15%. The fresh law involves voluntary national steps to decrease gas consumption and if they produce unsatisfactory savings, an initiative for obligatory moves in the bloc.
Gazprom, the Russian energy giant said of late that it would limit supplies to the EU through the Nord Stream 1 pipeline to 20% of capacity, adding to the concerns that Russia will use gas trade to encounter the European Union’s disapproval of the war in Ukraine.
The EU countries agreed last month that all natural gas storage in the 27-nation bloc must be topped up to at least 80% capacity for next winter to avoid shortages all through the winter season. The new rule also says underground gas storage on EU soil will also need to be filled to 90% capacity before the 2023-24 winter.
The bloc has agreed to ban 90% of Russian oil by year-end in addition to a ban on imports of Russian coal. The EU has not included gas; a fuel used to power factories and generate electricity, in its own sanctions for fear of extremely damaging the European economy. Before the war in Ukraine, it relied on Russia for 25% of its oil and 40% of its natural gas.
In order to cut the use of Russian energy, the European Commission has been diversifying suppliers. Their efforts are already making a big transformation. Since March, global LNG exports to Europe have climbed by 75% compared to 2021. LNG exports from the U.S. to Europe have nearly tripled.
The average monthly import of Russian pipeline gas has declined by 33% compared to last year, as the EU is for a speedy transition toward renewable sources of energy. Renewables are homegrown; they are more cost-efficient and cleaner.
Since the Ukraine war, the West has protested with economic sanctions against Russia, and twelve EU countries have faced a cessation or decrease in Russian gas deliveries.
Though the EU has decided to restrict oil and coal from Russia starting later this year, it has abstained from sanctioning Russian natural gas because Germany, Italy, and some other member states rely greatly on these imports.
The interruptions in Russian energy trade with the EU are fueling inflation already at record levels in Europe and threatening to generate a recession in the bloc just as it still recovering from a pandemic-induced slump.
Although the EU has gained centralized authority over monetary, trade, antitrust, and farm policies, national sovereignty over energy matters still largely prevails. The energy squeeze is reviving decades-old political tests for Europe over policy coordination.
As an indication of this, the energy ministers scrapped a provision in the draft gas-rationing law that would have given the European Commission the power to decide on any move from voluntary to binding actions. Instead, the ministers make sure any decision on obligatory steps would be in member-state hands.