EU leaders seek escape route from Russian fossil fuels, weigh energy investment plan

EURACTIV.com with Reuters

 10 Mar 2022

Europe’s energy independence from Russia, including in its financial aspects, will be a key topic of discussion at a two-day summit in Versailles hosted by the French EU presidency. [France Diplomatie – MEAE]

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European Union leaders will tackle ways to wean themselves off Russian fossil fuels on Thursday (10 March) and debate how quickly to ditch their key supplier, with countries split over whether to sanction oil and gas imports as Moscow wages war in Ukraine.

Russia’s invasion of Ukraine prompted Brussels to unveil plans this week to reduce reliance on Europe’s top gas supplier this year and end it within the decade.

How to implement those plans, not to mention how to finance them, will be a key topic under discussion at a two-day summit in Versailles, France.

A draft of the summit statement, seen by EURACTIV, would agree to phase out the EU’s dependency on imports of Russian gas, oil and coal, including by ramping up liquefied natural gas imports and speeding up deployment of renewable energy. It did not set a date for the phase-out.

“Some are asking 2030, some are asking 2027, some are saying now,” an EU official said, referring to the member states.

LEAK: EU leaders to consider phasing out Russian fossil fuels

EU heads of states and government will consider ways to “phase out our dependency on Russian gas, oil and coal imports” at an informal meeting later this week, according to leaked draft summit conclusions seen by EURACTIV.

The 27 countries of the EU rely on Russia for 40% of their collective gas needs, 27% of oil imports and 46% of coal imports.

Russian gas flows to Europe have continued at a steady pace since the invasion, which Russia calls a “special military operation”, but Moscow has warned that Western sanctions on its oil could prompt it to close a major gas pipeline to Europe.

The EU leaders will discuss also contingency plans for supply disruptions.

“We cannot exclude that Russia will take retaliatory steps,” EU energy policy chief Kadri Simson said.

The United States, which is less reliant on Russian energy, banned imports of Moscow’s oil and gas on Tuesday, while the EU has so far focused its measures on banks and oligarchs, banned Russian aircraft from EU airspace and halted technology exports.

Approval would be needed from all 27 member states but EU officials say the stance of German Chancellor Olaf Scholz, who rejects sanctioning energy imports, is shared by other countries.

Germany receives 18% of Russia’s gas exports and 11% of its oil.

“While we condemn Russia’s armed offensive and we also condemn the war, we will not allow Hungarian families to be made to pay the price,” Hungary’s prime minister Viktor Orbán said on Tuesday, opposing energy sanctions. Hungary imports most of its oil and gas from Russia.

Other countries say the hundreds of millions of euros per day Europe pays Russia for fossil fuels must stop – even if that hurts Europe’s economy and pushes soaring energy prices even higher.

“Billions are flowing to Russia via Nord Stream 1,” a Polish diplomat said, referring to a gas pipeline from Russia to Germany. “These are billions for which today Ukrainians are paying with their own blood.”

EU rolls out plan to slash Russian gas imports by two thirds before year end

The European Commission on Tuesday (8 March) presented proposals to reduce the EU’s dependence on Russian gas by two thirds before the end of 2022 as part of a plan to become independent from all Russian fossil fuels “well before 2030”.

EU leaders will also hold initial talks in Versailles about a joint investment plan to boost the bloc’s independence in defence and energy following the crisis in Ukraine, a French presidency official said on Wednesday.

“We are thinking about it, it’s the start of a discussion about a plan to speed up and increase joint investments in defence, energy and climate transition,” the official said ahead of the two-day summit on Thursday evening.

The official said the aim was to identify the economic impact of the crisis, determining countries’ financial needs as a result of it and then considering what instruments could be used.

Dutch Prime Minister Mark Rutte, who has resisted such joint financial initiatives in the past, said earlier on Wednesday that the European Union should first make full use of existing instruments before rolling out new EU funds.

Finnish PM Sanna Marin said Finland would also be opposed to a scheme based on joint liability. “Such openings we would try to turn down quickly,” she said.

The European Commission’s Vice President Frans Timmermans denied the existence of such plans, which would need unanimous approval from member states.

Finland unkeen on EU joint bond sales idea to fund energy and defence

To free itself from Russian energy, boost the green transition and increase defence spending, the EU is rumoured to be planning a vast recovery package. The initial response from Finland is distinctly cool.

According to the Bloomberg News Agency (8 March), …

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