EU strikes deal to cut gas use by 15% amid Russian energy 'blackmail'

Energy ministers reach compromise deal as threat of Russian gas stoppage looms

Europe relies on natural gas from Russia for a large chunk of its heating and electricity generation. AFP
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The European Union struck a deal on Tuesday to slash its energy consumption this winter as Russia holds back supplies in what Ukraine called an “overt gas war”.

EU members agreed a 15 per cent target to reduce their gas use between August and March, although the package was watered down to include opt-outs for some countries.

The aim of the cuts, which are initially voluntary, is to save energy so that storage tanks can be filled up, energy rationing is avoided, and Russia is prevented from blackmailing its neighbours during the stand-off over Ukraine.

Russian exporter Gazprom raised the stakes on Monday by saying it would cut supplies through its main pipeline to Germany, Nord Stream 1, to 20 per cent of capacity, and there are fears that Moscow will turn off the tap altogether.

“Today, the EU has taken a decisive step to face down the threat of a full gas disruption by Putin,” said European Commission President Ursula von der Leyen, who had proposed the gas cuts last week and described Russia's policies as “energy blackmail”.

“The announcement by Gazprom that it is further cutting gas deliveries to Europe through Nord Stream 1, for no justifiable technical reason, further illustrates the unreliable nature of Russia as an energy supplier,” she said.

The compromise deal was struck between the EU's 27 energy ministers in Brussels, after what one official described euphemistically as “interesting discussions” among member states.

The initial proposal was amended so that Ms von der Leyen's Commission cannot declare a “union alert” unilaterally, but must be invited to do so by five countries and then put the idea to member states.

The alert would be the trigger for gas cuts to become mandatory, but some member states with limited links to Europe's power grid — which include islands such as Ireland and relatively remote nations such as Spain — would be exempt.

Those nations successfully argued that their position outside the gas grid meant there was no point forcing them to save energy if it would not really increase Europe's supplies.

“In each case, it’s based on a reality — in our case, a physical reality, we’re not connected to the European gas grid,” said Irish minister Eamon Ryan. “That doesn’t stop the basic desire of all of us to reduce our use.”

Another compromise is that countries can request an opt-out from the 15 per cent target in certain cases, for example if they overshoot their gas storage targets or they badly need gas for electricity.

The 15 per cent figure was calculated because the EU would be short by roughly that much if Russia switched off supplies from now until winter, according to modelling by officials.

Recommended savings include switching to cleaner fuels in industry, cutting back on heating and air conditioning, bringing in incentives for companies to save power, and raising awareness among citizens of the need to use less energy.

Hungary was the only country to vote against the package, which unlike some of the EU's sanctions policies did not need unanimity to pass.

The fact that wealthy Germany is among the most in need of solidarity has sparked ironic comparisons to the 2010s eurozone crisis, when Berlin was seen as showing little sympathy for indebted countries such as Greece and Ireland.

But those nations declined to stick the boot in now that Germany has been caught cold by its past reliance on Russian gas.

“We have to look forward, more than anything else [at] how we get through this winter. And that makes the case for solidarity no matter what happened in the past,” Mr Ryan said.

EU energy ministers struck a deal at emergency talks in Brussels on Tuesday. AP

Vice Chancellor Robert Habeck, representing Germany, said any economic strife in Europe's biggest economy would also affect neighbours such as Poland and France.

He accepted that Berlin had miscalculated by becoming so reliant on Russian gas, but said: “It is not only a German problem, but it is a Central and Eastern European problem”.

Like the Commission, Mr Habeck's ministry said it saw no technical reason why Gazprom should cut supplies through Nord Stream, rejecting the state-owned company's explanation about problems with a compressor station.

The reduction calls into question whether EU countries such as Germany can hit the target of filling up their storage tanks to 80 per cent before winter.

Ukrainian President Volodymyr Zelenskyy said Russia was waging an “overt gas war” aimed at breaking European unity over the invasion.

“All this is done by Russia deliberately to make it as difficult as possible for Europeans to prepare for winter,” he said.

European countries are meanwhile trying to end their reliance on Russian gas by buying from alternative suppliers, increasing interconnections and increasing their renewable energy use.

There are gas agreements in place with the US, Canada, Norway, Egypt and Israel, and officials are looking into options to increase imports from Nigeria.

The bloc will overcome “this winter, and then, next winter,” said Luxembourg's delegate Claude Turmes. “And then anyway, it's bye, bye, Russian gas”.

Updated: July 26, 2022, 4:41 PM
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