Commodities and Futures News

EU countries rewrite plan to cut gas demand, seek carve-outs

2022.07.25 12:49

EU countries rewrite plan to cut gas demand, seek carve-outs
FILE PHOTO: European Commissioner Kadri Simson speaks at a news conference in Brussels, Belgium July 20, 2022. REUTERS/Yves Herman/File Photo

By Kate Abnett

BRUSSELS (Reuters) – European Union countries are seeking to soften the bloc’s plan to require them to use less gas as Europe prepares for a winter of uncertain supplies from its main gas supplier Russia.

The European Commission proposed last week that the 27 EU member states each cut their gas use by 15% from August to March. The target would be voluntary, but the Commission could make it binding in a gas supply emergency.

Brussels has urged countries to curb gas use now to help fill storage ahead of winter, and warned that a full cut-off of Russian gas is likely. But the EU plan has faced resistance from a swathe of governments, with some flatly against binding cuts and others unwilling to let Brussels control their energy use.

Diplomats from EU countries will discuss a revised proposal on Monday. The proposal, seen by Reuters, would keep the voluntary target for all countries to curb gas use, but set different mandatory targets.

The latest proposal, drafted by the Czech Republic, which currently chairs EU country meetings, offers a range of exemptions to the binding target to use less gas.

Countries without links to EU gas networks would be exempted – which could cover island countries such as Ireland and Malta – and those with large volumes of stored gas could face lower targets to curb demand.

States that export gas to other countries could also face lower targets, likely including Spain, which does not rely on Russia for gas and has been among the firmest opponents of the EU proposal. Critical sectors such as chemicals and steel could also be exempted.

The new proposal puts national governments rather than the Commission in charge of the process to make the target binding, which could only be done with majority support from countries.

Diplomats from EU countries had mixed views on the latest draft, with some welcoming it and others concerned by the large number of exemptions.

Energy ministers will attempt to approve it on Tuesday. The proposal needs approval from a reinforced majority of at least 15 EU countries to become law.

Source

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