The European Commission on Tuesday proposed 'REPowerEU' plan to stop Europe's dependence on Russian fossil fuels before 2030, starting with gas, after the bloc's energy sources came under threat with Russia's invasion of Ukraine.
The proposed plan includes measures to respond to rising energy prices in Europe and to replenish gas stocks for next winter.
Natural gas, oil and coal prices in global markets have recently reached record levels over the Russian-Ukrainian war.
Natural gas trading on the TTF - the Netherlands-based virtual natural gas trading point - saw a 160% increase over the last 12 days since the start of the Russian-Ukrainian war on concerns that the conflict will result in damage to natural gas infrastructure along with the possibility of gas flow being interrupted from Russia's bombing and missile attacks on Ukraine.
In order to phase out EU's dependence on fossil fuels from Russia before 2030, the commission proposed REPowerEU plan that will increase the resilience of the EU-wide energy system.
The plan includes diversification of gas supplies, via higher Liquefied Natural Gas (LNG) and pipeline imports from non-Russian suppliers, and larger volumes of biomethane and renewable hydrogen production and imports.
The plan also aims to reduce faster the use of fossil fuels in homes, buildings, industry, and power system, by boosting energy efficiency, increasing renewables and electrification, and addressing infrastructure bottlenecks.
'REPowerEU will seek to diversify gas supplies, speed up the roll-out of renewable gases and replace gas in heating and power generation,' the commission said, noting its expectation that the move can reduce EU demand for Russian gas by two thirds before the end of the year.
Underlining that the EU must become independent from Russian oil, coal and gas, Commission President Ursula von der Leyen said the bloc “cannot rely on a supplier who explicitly threatens us.”
Urging caution to mitigate the impact of rising energy prices, diversify the bloc’s gas supply for next winter and accelerate the clean energy transition, von der Leyen said the quicker “we switch to renewables and hydrogen, combined with more energy efficiency, the quicker we will be truly independent and master our energy system.”
She also noted that she would discuss the issue with European leaders at Versailles later this week.
Commissioner for Energy, Kadri Simson said Europe has sufficient amounts of gas for the remaining weeks of this winter, and urged for the need to replenish reserves urgently for next year.
'The Commission will therefore propose that by 1 October, gas storage in the EU has to be filled up to at least 90%,' Simson said adding that price regulation, state aid and tax measures to protect European households and businesses against the impact of the exceptionally high prices were also outlined.
-Emergency measures on energy prices and gas storage
Building on the commission's 'Energy Prices Toolbox' announced in October, additional guidance allows the member countries to regulate prices in exceptional circumstances and set out details while redistributing revenue from high energy sector profits and emissions trading to consumers.
The plan also offers short-term support to companies affected by high energy prices, and help reduce their exposure to energy price volatility in the medium to long term.
The commission will also present a legislative proposal by April requiring underground gas storage in the EU to be filled to at least 90% capacity by 1 October each year.
The proposal would entail the monitoring and enforcement of filling levels and build in solidarity arrangements between member states.
The commission continues its investigation into the gas market in response to concerns about potential distortions of competition by operators, notably Gazprom, according to the statement.
To address the skyrocketing energy prices, the commission will look into all possible options for emergency measures to limit the contagion effect of gas prices in electricity prices, such as temporary price limits.
It will also assess options to optimise the electricity market design taking into account the final report of the EU Agency for the Cooperation of Energy Regulators (ACER) and other contributions on benefits and drawbacks of alternative pricing mechanisms to keep electricity affordable, without disrupting supply and further investment in the green transition.
Attributing to the EU's 'Fit for 55' plan which refers to the bloc's target of reducing net greenhouse gas emissions by at least 55% by 2030, the statement said full implementation of this plan would already reduce annual fossil gas consumption of the bloc by 30%, equivalent to 100 billion cubic metres (bcm).
'With the measures in the REPowerEU plan, we could gradually remove at least 155 bcm of fossil gas use, which is equivalent to the volume imported from Russia in 2021. Nearly two thirds of that reduction can be achieved within a year, ending the EU's overdependence on a single supplier,' it added.
The EU imports 90% of its gas consumption, with Russia providing around 45% of those imports, in varying levels across member states. Russia also accounts for around 25% of oil imports and 45% of coal imports.
By Sibel Morrow
Anadolu Agency
energy@aa.com.tr