At the EU ‘Energy’ Council on Monday 4 March, the European energy ministers discussed security of supply and preparations for the winter, agreeing in particular on a European Commission recommendation to continue the coordinated reduction in gas demand (see EUROPE 13359/14) and assessing the end of the agreement on the transit of Russian gas via Ukraine.
Reducing demand for gas
The gas demand reduction regulation was adopted in 2022 as an emergency instrument to deal with the energy crisis caused by Russia's invasion of Ukraine. It was extended in March 2023 for one year, until the end of March 2024, to ensure security of supply and deal with price volatility.
“I am delighted to see a fall in demand, and we are in a better situation than before (...) However, gas markets remain tense and vulnerable to shocks”, the Belgian Minister for Energy, Tinne Van der Straeten, told a press conference.
She welcomed the “broad consensus around the table” that has made it possible to extend the demand reduction measure. EU countries are therefore now encouraged to reduce their gas consumption by at least 15% by 31 March 2025, compared to their average gas consumption in the period from 1 April 2017 to 31 March 2022.
In addition, the recommendation takes account of specific circumstances, such as desynchronisation, isolated networks and limited interconnection capacity, and recommends maintaining other existing measures under the regulation, such as monitoring and reporting of gas demand reduction by sector.
The ministers discussed other issues relating to security of supply, such as the demand for flexibility in the energy system in the context of the increasing integration of renewable energies and preparations for the coming winters.
Preparing for winter
In an information note, the European Commission communicated to the national delegations that the EU should enter the stock-filling period with 45 to 55 billion cubic metres of gas, “which constitutes a good basis for preparing for the winter of 2024/2025”.
On 24 February, underground storage reached 64% of its capacity. This is comparable to the previous year, but above the 44.6% average for the years 2016-2020 and “on track” to meet the 90% target by the 1 November 2024.
Transit agreement via Ukraine
With regard to the transit agreement between Gazprom and Naftogaz via Ukraine, which expires on 31 December 2024, the ministers discussed the importance of close monitoring and coordination in order to ensure the EU’s security of supply in the future. This route will carry 14 billion cubic metres of Russian gas through Central and South-Eastern Europe by 2023.
“However, the flexibility of the gas system without Ukrainian transit needs to be further assessed, as the use of other supply routes could lead to higher transport costs and storage charges applied at interconnection points could make this diversification more difficult and costly”, the Commission warned in its information note.
It indicated that it will continue this development and identified the necessary steps to be prepared for a possible situation where the flow of Russian gas transiting through Ukraine is completely interrupted as of 1 January 2025.
The European Commissioner for Energy, Kadri Simson, however, sought to reassure: “After two years of work under RepowerEU, the EU has a diversified network of alternative transport infrastructures. Member States have options to acquire gas from other routes, and the shortfall left by the cessation of Russian supplies by this route can be absorbed by the European market. The EU has no interest in prolonging this trilateral agreement with Russia and the focus must now be on how to support Ukraine and how best to use its gas storage infrastructure in the future and better integrate it into the EU”.
Russian LNG imports
More generally, Russian gas accounted for 15% of the EU’s total gas imports in 2023, or 43 billion cubic metres (compared with 80 in 2022 and 150 before the war), of which 18 billion cubic metres were liquefied natural gas (LNG).
On this subject, the Lithuanian delegation has published a specific information point calling for urgent legal action to stop Russian LNG imports into the EU.
“We are not in a position to accept that Russia should use LNG to compensate for the natural gas it has unilaterally decided to cut off via the pipeline”, the Commissioner stressed.
She explained that LNG could not be banned easily, as Lithuania was requesting, since the decision falls under the EU sanctions regime, which requires unanimity among Member States.
She therefore referred to the gas package recently agreed between the EU institutions (see EUROPE 13310/5), which will allow Member States, on a voluntary basis, to adopt restrictions on the supply of natural gas, including LNG, from Russia or Belarus.
Finally, over lunch, the ministers held talks with the solar energy sector to ensure the competitiveness of the European industry in this field. Following the meeting, Commissioner Simson explained that the Commission was ready to take concrete action and was working on a “solar power pledge”. (Original version in French by Pauline Denys)