Europe agrees compromise deal on gas rationing as Russia squeezes supply


European Union governments on Tuesday agreed to ration natural gas this winter to guard against further supply cuts by Russia as Moscow continues its invasion of Ukraine.

EU energy ministers have approved draft European law that would cut gas demand by 15% from August to March. The new legislation includes voluntary national steps to reduce gas consumption and, if they don’t bring enough savings, a trigger for mandatory moves in the 27-strong block.

European Commission President Ursula von der Leyen welcomed the move, saying in a statement that “the EU has taken a decisive step to address the threat of a full-scale gas disruption by (Russian President Vladimir) Putin.”

On Monday, Russian energy giant Gazprom said it would limit supplies to the EU via the Nord Stream 1 pipeline to 20% of capacity, raising concerns that Putin will use gas trading to squash the bloc’s opposition to the war in Russia to challenge Ukraine.

“Winter is coming and we don’t know how cold it will be,” said Czech Industry Minister Jozef Sikela, whose policy area includes energy. “But what we do know for sure is that Putin will continue to play his dirty games by abusing and blackmailing gas supplies.”

The ministerial agreement was sealed in less than a week. It is based on a proposal made last Wednesday by the European Commission, the EU’s executive branch. The commission is keen to maintain a common EU front over a conflict that shows no sign of ending and said coordinated rationing would allow the bloc as a whole to weather the winter should Russia cut all gas supplies.

Since Russia invaded Ukraine in February and the West protested with economic sanctions, 12 EU countries have had to stop or reduce Russian gas supplies.

Despite agreeing to embargo Russian oil and coal from later this year, the EU has refrained from sanctioning Russian natural gas because Germany, Italy and some other member states are heavily dependent on these imports.

“Germany has made a strategic mistake in the past with its great dependence on Russian gas and the belief that it would always flow constantly and cheaply,” said Federal Minister of Economics Robert Habeck, who is also responsible for energy and is Vice Chancellor. “But it’s not just a German problem.”

Disruptions in Russia’s energy trade with the EU are already fueling inflation in Europe to record levels and threatening to trigger a recession in the bloc as it recovers from a pandemic-related slump.

Energy shortages are also reviving decades-old political tests for Europe in terms of policy coordination. While the EU has gained centralized powers over monetary, trade, antitrust and agricultural policies, there is still largely national sovereignty over energy issues.

In a sign of this, energy ministers removed a provision in the draft gas rationing law that would have given the European Commission the power to decide on a switch from voluntary to mandatory measures. Instead, ministers ensured that all decisions on mandatory steps are in the hands of member states.

They also watered down other elements of the original proposal, including exemptions for island states.

Nonetheless, Tuesday’s agreement marks another milestone in EU policy integration and crisis management.

The agreement comes just six days after the Commission rushed out the draft law – a stark contrast to previous EU energy legislative initiatives, which have often required months or years of negotiations between national governments. Europe agrees compromise deal on gas rationing as Russia squeezes supply

Fry Electronics Team

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