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EU countries plan for gas deals to replace Russian fuel – draft

EU countries plan for gas deals to replace Russian fuel - draft
© Reuters. A model of a natural gas pipeline and a torn European Union flag are placed on a Russian flag in this illustration taken September 7, 2022. REUTERS/Dado Ruvic/Illustration

By Kate Abnett and Jan Strupczewski

BRUSSELS (Reuters) – European Union countries intend next year to push for more gas deals – including long-term contracts – to replace Russian supplies, draft conclusions for an EU leaders’ summit on Thursday showed.

The draft, seen by Reuters, said the EU should move quickly to start jointly buying gas – an idea suggested by the EU last year to use the bloc’s heft as the world’s biggest gas market to negotiate lower prices, but which it has yet to put into practice.

At the same time, countries should also accelerate talks with reliable suppliers “to secure the supply of gas in view of winter 2023/2024 with a view to concluding long-term contracts,” said the draft, which could change before it is adopted by leaders.

Russia was Europe’s top gas supplier but has cut off the majority of European deliveries since its invasion of Ukraine in February, sending energy prices soaring and driving EU countries to secure extra supplies from Algeria, Norway and the United States.

Brussels has said the majority of Russian supplies should be displaced by locally-produced renewable energy and energy savings, to ensure the EU meets its climate change targets. The draft leaders’ statement also said such investments should be stepped up.

The EU is negotiating a proposed law that would ban countries from concluding CO2-emitting gas contracts with a duration beyond 2049, to avoid such contracts thwarting the EU’s aim to achieve net zero greenhouse gas emissions by 2050.

The EU has also committed to cut its net greenhouse gas emissions 55% by 2030, from 1990 levels. By the EU’s own estimates, that would see total gas consumption drop by 30%, or 100 billion cubic metres, by 2030.

“Having to replace most of Russian gas supplies, it makes sense for Europe to sign up to long-term contracts,” said Simone Tagliapietra, Senior Fellow at think-tank Bruegel.

Tagliapietra said such contracts need not be in breach of the bloc’s climate targets, but they should not prevent the EU from re-directing gas flows to Asian countries planning a slower shift away from gas on the way to reaching net zero emissions, if the fuel is no longer needed in Europe.

Source: Investing.com

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