EU countries agree to cut gas demand by 15% over Russia supply fears
Updated 23:29, 26-Jul-2022
The Nord Stream 1 Baltic Sea pipeline and the transfer station of the OPAL gas pipeline, the Baltic Sea Pipeline Link, in Lubmin, Germany, July 21, 2022. /CFP

The Nord Stream 1 Baltic Sea pipeline and the transfer station of the OPAL gas pipeline, the Baltic Sea Pipeline Link, in Lubmin, Germany, July 21, 2022. /CFP

The European Union (EU) countries on Tuesday reached a political agreement to voluntarily cut their natural gas demand by 15 percent this winter, according to a statement from the European Council.

"Member states agreed to reduce their gas demand by 15 percent compared to their average consumption in the past five years, between 1 August 2022 and 31 March 2023, with measures of their own choice," it said.

The purpose is to "make savings ahead of winter in order to prepare for possible disruptions of gas supplies from Russia," according to the statement, which could be made mandatory in case of a substantial risk of a severe gas shortage or an exceptionally high gas demand.

Hungary was the only country that opposed the deal, two EU officials said.

Some exemptions

The European Council agreed to exempt numerous countries from a mandatory gas reduction order.

Member states that are not connected to other member states' gas networks, such as Ireland and Malta, are exempted, as they would not be able to free up significant volumes of pipeline gas to the benefit of other member states.

Member states whose electricity grids are not hooked up to the European electricity system, and are heavily reliant on gas for electricity production, are also exempted, in order to avoid the risk of an electricity supply crisis.

Countries that meet an EU target for filling gas storage by August could face weaker targets – softening the cuts for roughly a dozen states, including Germany and Italy, based on current storage levels.

They can also exempt the gas they use in critical industries, such as energy-intensive steelmaking, from the target. 

In addition, those with a limited ability to export gas to other EU countries can request a lower target, provided they export what they can. That could include Spain, which does not rely on Russian gas, and has said cutting its own demand would not help other countries since it lacks infrastructure capacity to share spare fuel. 

Russia further limits supplies

Since the Russia-Ukraine conflict began in February and the West protested with economic sanctions, 12 EU countries have faced halts to, or reductions in, Russian gas deliveries.

On Monday, Russian energy giant Gazprom said it would limit supplies to the EU through the Nord Stream 1 pipeline to 20 percent of capacity.

Although the EU has agreed to embargo oil and coal from Russia starting later this year, it has refrained from sanctioning Russian natural gas because Germany, Italy and some other member states rely heavily on these imports.

The disruptions in Russian energy trade with the EU are stoking inflation already at record levels in Europe and threatening to trigger a recession in the bloc just as it was recovering from a pandemic-induced slump.

(With input from agencies)

Search Trends