BRUSSELS/LONDON (Archyde.com) – Political pressure is mounting within the European Union to tackle the difficult task of plugging loopholes in efforts to end the use of Russian fossil fuels. ing.
A year after Russia invaded Ukraine in February 2022, the EU has targeted oil and coal imports from Russia by sea.
Although Russian natural gas is not subject to sanctions, reliance on pipelined natural gas has fallen dramatically. At the same time, EU countries are increasingly importing Russian liquefied natural gas (LNG) as a whole, threatening to meet the EU’s pledge to move away from using Russian fossil fuels by 2027. .
As a result, the EU has transferred billions of dollars to Russia’s state-owned natural gas companies Gazprom and Novatek, which may be paying for the war in Ukraine. The two energy companies are among the biggest contributors to Russia’s finances due to their corporate tax payments.
Analysts at Capraview, a research firm that forecasts the global natural gas market, said nearly half of Russia’s LNG exports went to Europe in the first 10 months of its invasion of Ukraine, generating about $14 billion in revenue. I am making a trial calculation.
An EU analysis puts Russian LNG imports up from 16 billion cubic meters in 2021 to 22 billion cubic meters last year. Although far less than the 155 billion cubic meters of natural gas that the EU once purchased from Russia via pipelines annually, some countries have significantly increased their imports since the start of the invasion. be seen.
Belgium and Spain have nearly doubled their imports of Russian LNG in the 12 months since Russia’s invasion of Ukraine began, according to an analysis by research firm Kepler.
There are growing calls within the 27-member EU to address the issue, but no agreement has been reached on how to do so. This is because there is a high risk that energy prices will soar, or even increase Russia’s energy earnings.
EU energy commissioner Kadri Simson last month called on member states and EU companies to stop buying LNG from Russia, touting efforts to cut the flow of EU money to Russia while bolstering LNG imports. He said there was a “risk of damage to the EU’s reputation” if volumes were rising.
And in Spain last month, Energy Minister Tereza Rivera urged Spanish companies not to sign new contracts to buy Russian LNG. But he said EU companies that stopped buying Russian LNG would have to pay penalties for breach of contract, unless official sanctions were the reason.
“I think it should be part of the sanctions package, otherwise it would be a very absurd situation,” Rivera told Archyde.com.
“It’s true that the total amount is not that much, but I don’t think it’s easy to explain why we are still importing Russian LNG.”
Given the high political hurdles to approve sanctions that require the consent of all member states, some in the EU are exploring other options.
Last week, several EU member states jointly proposed a legislative option for the EU that would allow Russian companies to stop reserving the infrastructure needed to export LNG to Europe.
The proposal is part of a draft law containing broader rules for the EU’s natural gas market, which will require consultation with the European Parliament. The European Parliament is calling for further action, proposing a virtual ban on all imports of Russian natural gas into the EU.
“Unprecedented times call for unprecedented responses,” said former Polish Prime Minister Jerzy Brzek, who is the lead proponent of the bill in the European Parliament. Buzek said the proposal is in line with the EU’s strategy to end dependence on Russian fossil fuels.
But some EU officials say the European Parliament’s proposal is highly unlikely to win political support from member states, partly because of legal difficulties.
Claus-Dieter Borchert, senior energy adviser at Baker McKinzie Law Firm, said that World Trade Organization (WTO) rules allow countries to specify certain conditions under certain conditions. All it does is remove the products from its home market.
“Personally, I doubt whether a proposal like this one is consistent with the WTO principle of non-discrimination,” Borchart said of the European Parliament’s proposal. He previously held a senior position with the European Commission’s Energy Agency.
Dutch Energy Minister Rob Jetten told Archyde.com there were practical difficulties in some countries as they were unable to source enough supplies to meet the immediate suspension of LNG imports.
“For some EU member states, this will go too far,” Mr. Jetten said of the prospect of sanctions on Russian LNG.
Since the start of the invasion of Ukraine, the Netherlands has completely stopped importing Russian natural gas via pipelines. Although LNG imports are decreasing, they have not reached zero.
Halting Russian LNG imports is a double-edged sword, analysts say.
Capraview analyst Tamil Durz said the import ban would raise natural gas prices in Europe but would not necessarily reduce Russia’s export earnings. If it is LNG, it is easy to change export destinations to Asian markets where sanctions against Russia have not been imposed.
“Unlike pipeline gas exports, which are essentially docked in Russia, it will be much more difficult to reduce Russia’s export earnings and the dependence of the global natural gas market on Russian natural gas,” said Druz. says Mr.
In addition, considering the transshipment between tankers, it is difficult to determine that LNG brought in from other countries does not contain Russian products, and the enforcement of the embargo remains an issue.
Some EU diplomats believe that if, for example, Europe requires the presentation of documentation proving that LNG is not from Russia, and other markets do not require such proof, suppliers will not be allowed to ship LNG to Europe. There are concerns that people will hesitate to take a step back.
Given the tight supply and demand in the LNG market of late, some analysts believe that it will not be easy for Europe to seek alternatives to Russian LNG, and that if the gap cannot be filled, gas shortages will occur. I’m talking about fear.
“The whole point of sanctions is to ensure that your country doesn’t do more harm than the country you’re sanctioning,” said Annesophie Corbault, a researcher at the Center for Global Energy Policy at Columbia University.
(Translation: Eacleren)