Europe refuses oil and gas from Russia. Not right away, but the plan and money are already there
- Alexey Kalmykov
- BBC
The BBC News Russian Service app is available for iOS and android. You can also subscribe to our channel at Telegram.
Russia’s attack on Ukraine gradually increases the farewell to impossible fuel consumption and focuses on the rejection of Russian oil and gas specifically. On Wednesday, the EU announced the new measures, and at the same time, the European Commission published a plan of action in case the Kremlin itself turns off the gas.
Under the updated plan, the EU raises additional funds more than 200 billion eurosto completely abandon Russian fossil fuels by 2027.
Before the talk of war, there was only talk of banning long-term contracts with Gazprom after 2050, but two weeks after the Russian invasion, the European Commission outlined a plan to cut oil and gas from Russia completely by 2030. Now this plan has been concretized, and the deadline is approaching for another three years.
“Putin’s war has destabilized the global energy market and has shown what we rely on when we rely on Russia as a fossil fuel supplier. We have an obligation to reduce dependence on Russia as quickly as possible. This is a predetermined plan.
For this, the European Commission has tightened the goals and the highest European program of “green” economic restructuring RePowerEU, expected until 2050. The EU is going to increase and decrease gas consumption by 30% by 2030.
What is the EU going to do?
Partially replaced by Russian oil and EU gas is collected by increasing purchases in other countries, primarily in the US and the Middle East. The preparation of terminals, pipelines and other possibilities will take 12 billion euros.
But the main and significant part of the plan is the growth of production from economic sources and energy savings.
The EU is now going to double the share of total sources in energy and bring it to 45% (in the pre-war plan it was 40%), as well as reduce energy consumption in general by 2%, not 1.5% per year and reduce it by 2030 . 13% instead of 9%.
To collect the “green” restructuring, the European Commission proposed to make solar panels for all office and residential buildings from 2025, and from 2029 for new residential buildings. Gas boilers will be quickly replaced with heat pumps, and the construction of windmills on land and at sea will be approved under an accelerated program.
The costs must ultimately be bought, not only politically through dependence on a militant eastern neighbor, but also financially. According to the European Commission, by 2030 the 27 EU countries will annually save 80 billion euros on gas imports, 12 billion on oil and almost 2 billion on coal.
However, this requires that all of them comply with the recommendations of the European Commission and adopt all the necessary decisions and laws. Now they are united as never before in the face of Russian aggression, but not all the proposals of the European Commission are being called up.
Thus, Hungary continues to block the sixth package and requires subsidies for itself to reduce losses from the oil embargo. Part of the funds announced today may just be used to pay for these expenses and the possibility of easy consumption through the Druzhba oil pipeline.
Oil and gas war
New measures and plans would not have been born without Russia’s energy war against consumption – its nearby, nearest and richest market.
It started back in autumn, when Gazprom turned on the tap. Gas prices in Europe soared to unprecedented heights, which led to the slowdown of the second eastern economy of the world and the discontent of the EU residents. They are facing record inflation and falling living standards, already sick from a two-year flu pandemic.
But as soon as Russian President Vladimir Putin sent an army to seize Ukrainian lands, the energy war also moved from a cold stage to a hot one.
The EU has introduced a decision, a decision from Russian coal, to reduce gas purchases in Russia by two thirds by the end of the year and almost agree on an embargo on Russian oil. In response, Putin ordered to take gas for gas in rubles, disagreeing with Poland and Bulgaria, Gazprom cut off supplies.
This is a fight not for life, but for death.
The EU imports 57.5% of all energy consumption, and Russia is a key supplier. The EU buys about 40% of all gas and up to 30% of oil and oil products from Russia.
Raw Russia is no less dependent on the EU. The oil and gas sector generates most of the budget revenues and more than half of exports, and 70% gas and 60% oil and oil products it sells just to Europe.
If Putin turns off the gas
Each next blow in the war, due to opponents, strives to appear where it hurts the opponent more. Russia earns more on oil, and cannot yet use the choice from gas. Therefore, the EU, preparing an oil embargo against Russia, fears that Putin will respond by cutting off gas.
Plan for this event European Commission made public together with a large package of measures for dependence on growing energy resources. It has few details, and is broadly divided into two parts.
First, solidarity: turn off the energy in cycles, but coordinate it at the EU level in such a way that all countries suffer equally, and not just those that are most exposed to danger from the Russian threat.
And secondly, subsidizing prices, if they are available sky-high. This is usually objected to, but in many countries the EU is actively consuming energy in the context of the energy war in Russia.
“Since September 2021, Germany, France, Italy and Spain have been earmarking resources of between 20 billion and 30 billion euros to artificially curb the price of gas, electricity and gasoline,” says economist Simone Tagliapietra from the Brueghel Research Center.
“Such large-scale subsidies are unaffordable for taxpayers and harmful from the point of view of geopolitics and energy security, not to mention the environment, – he writes. – limiting the power of the EU countries subsidize President Putin.”