European Union is ready to buy common gas to reduce Russia’s imports

How to reduce the European Union’s dependence on Russia’s energy? This question is at the heart of the European Council, where 27 leaders will meet in Brussels on Thursday, March 24th and Friday, March 25th. Russia is a major supplier of gas to Europe, as conflicts have exacerbated energy prices that were already high before the outbreak of the war in Ukraine. Therefore, EU member states are seeking to diversify their sources.

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Among the possible measures, the draft final declaration of the European Council, announced on Tuesday, March 22, will be presented by Member States and the European Commission. “Cooperate for joint purchase of natural gas, LNG and hydrogen”..

Therefore, the Commission has announced that 27 people will help launch this program as of this year. In any case, this measure was sought by leaders in Italy, Spain, Greece and Portugal at the end of last week to counter the rising energy prices that hit individuals and businesses. “Common storage (of gas) will allow us to protect each other. General purchases can increase bargaining power with suppliers.”Showed Mario Draghi, Head of Government of Italy, after meeting in Rome on Friday, March 18.

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European executives had already proposed last year to pool 27 pools of strategic stock composition of natural gas presented by certain countries such as Spain as a means of mitigating the energy crisis. Nonetheless, this proposal is badly recognized by suppliers because it limits the room for price fixing. It also caused resistance within the EU (energy policy is a US issue), but was attracted to the war in Ukraine, which could jeopardize Russia’s gas supply in the short or medium term.

Fill inventory up to 90%

The Commission should also propose to Member States to adopt a rule requiring 90% of gas reserves to be filled before each winter during the period of the European Council. EU storage capacity is currently only 26% used. The draft Declaration emphasizes that 27 people have agreed to adjust this stockpile and will begin to do so. ” as soon as possible “. French Minister of Economy Bruno Le Mer said early March in a “European collective solution” that could be introduced to move towards Europe, which is more independent of Russia’s energy. Already mentioned this measure.

Heads of State and government leaders will also discuss new measures to protect consumers from rising energy costs and optimize the functioning of energy markets. The European government has already spent tens of billions of euros to limit the effects of rising energy prices that began before Russia invaded Ukraine. For example, France has frozen the price of gasoline sold to French homes since last fall. This measure was initially planned to cost € 1.2 billion to the state, but Bruno Le Mer now estimates the cost to be € 6.4 billion.

Elsewhere in Europe, Germany chose to introduce public subsidies for heating, Belgium and the Netherlands decided to lower VAT for energy, and Poland purely and simply abolished VAT for gas. ..

27 struggles to agree

However, 27 is struggling to agree on a collaborative response against the backdrop of disagreements about the best way to curb price increases.

France, Spain, Portugal, Italy, Greece and Belgium are seeking price restrictions at the European level by capping prices or separating the price of electricity from the price of gas.French Minister of Economy specifically defended on Friday, March 18 “27 caps on gas prices”..According to him, this is “We will negotiate with three major suppliers, Russia, Norway and Algeria. The price is 27, which is the maximum price.” Add it “We will suddenly impose the highest price on the company that produces the company.” In particular, it cites Russian Gazprom and Algerian Sonatrach.

But other countries, such as Germany, the Netherlands and Denmark, are particularly reluctant to do so, saying they are afraid that disguised forms of fossil fuel subsidies will discourage investment in renewable energy. am.

However, energy imports into Europe have continued since the beginning of the war in Ukraine. According to the Research Center of the Energy and Clean Air (Claire) Research Center, the amount of flow between the Kremlin and Europe in almost a month has reached € 16.8 billion (that is, € 646 million per day). Details: € 10.6 billion for gas, € 5.77 for oil (crude and refined), € 438 million for coal. A money supply that allows Vladimir Putin to fund his war and so far resist the economic sanctions imposed by the West.

Russian gas: why Europe is trapped