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EU urges countries to slash gas demand by 15%

July 20, 2022

The European Commission has unveiled an emergency plan to scale back gas consumption in case Russia totally cuts off supplies, which Commission chief Ursula von der Leyen has said is "a likely scenario."

The receiving station for the Nord Stream 1 natural gas pipeline near Lubmin, Germany
European officials say countries need to begin saving gas immediately to avoid a winter crunchImage: Sean Gallup/Getty Images

The European Commission published emergency plans on Wednesday to immediately reduce gas demand in the EU, as Europe aims to avoid a shortage of gas during the winter amid fears of Russia cutting off deliveries.  

In unveiling the proposal, EU Commission chief Ursula von der Leyen said that Russia was "using energy as a weapon."

"In any event, whether it's a partial, major cut-off of Russian gas or a total cut-off of Russian gas, Europe needs to be ready," she said. 

Von der Leyen added that Russia fully cutting off gas flows to Europe is "a likely scenario."

"We have to be proactive. We have to prepare for a potential full disruption of Russian gas. That's what we've seen in the past," von der Leyen said.

"We are preparing for the worst, and hoping for the best," she added.

What is in the EU gas proposal?

The emergency plan proposes that member states to engage in voluntary measures to reduce consumption.

All EU member states are asked to reduce gas demand by 15% between August and April. The proposal also allows Brussels the ability to trigger an emergency alert that requires mandatory gas demand reduction throughout the bloc.  

"This is a signal to all public bodies, consumers, households, owners of public buildings, power suppliers and that they must now take extraordinary and rapid measures to save gas," the proposal said. 

EU countries are largely responsible for their own energy policies. The emergency plan proposal would need member states' approval before being put in place.  

European countries depend on gas both for power and heating, and a colder winter threatens a dire situation later in the year if Russia further restricts supplies because of the EU's continued support for Ukraine. 

European governments are also closely monitoring if Russian gas flows through the Nord Stream 1 pipeline through Germany will restart as planned on Thursday after a scheduled maintenance period.

Why is the EU unveiling this plan now? 

As Russia's Gazprom has halted deliveries to some member states, EU officials warned that further cuts are to be expected. 

According to the International Energy Agency (IEA), the efforts to diversify energy sources and lessen dependency on Russia by the EU had not amounted to enough guaranteed supply to avoid reducing energy consumption during winter. 

This was likely one of the reasons for the emergency plan being proposed, as it calls for an immediate reduction in the consumption of gas to ensure reserves are filled in time. 

In 2021, 40% of the EU’s gas was imported from Russia. 

What does this mean for industries and private consumers?

European governments have also been advised to launch financial incentives for companies to reduce gas consumption.

Auctions or tenders could also be used, compensating large consumers for using less gas. Private households are being nudged to save energy by not utilizing heating or cooling as much. 

In case of an acute energy shortage, governments will need to make a decision on which industries to shut down and in what order. 

All 27 member states are asked to deliver national emergency plans with specific demand reduction measures to the EU by September after consulting with their immediate neighbors. 

The International Monetary Fund (IMF) on Wednesday cut Germany's growth forecast due in large part to gas supply constraints. The IMF predicts the German economy will grow by 1.2% this year and then as little as 0.8% in 2023, down from around 2% that had been predicted for both years in May.

Inflation is expected to average 7.7 percent in 2022 and 4.8 percent in 2023 if energy prices stabilize.

Gas supply: How will Germany cope in winter?

EU lawmaker says 'nothing new, nothing bold' in EU plan

Michael Bloss from Germany’s Green Party is a member of the European Parliament serving on the energy committee, and told DW that he is not convinced the gas saving plan would be enough to get European states safely through the winter.

“So the Commission announced today a lot of different measures that are anyway being pursued by member states, that we knew before, so there’s nothing new, nothing bold in it. So therefore its not now the big thing that actually helps us survive this energy crisis.”

Bloss said that in reality preparation would need to be made for there being not enough gas coming to Europe

“There will be rationing in place and the decision has to be made: Which industry has to go off first, and these questions have not been addressed.”

Another potentially dire consequence could be consumers not being able to cope with spiraling energy prices.

“Millions of EU citizens are not able to pay for their energy bills, their gas bills, and they need to get some protection, some kind of EU energy money in order to survive, and this is something we have to look at because if we risk that so many citizens will basically get bankrupt, then Putin achieved its aim to really tear Europe’s solidarity apart.”

kb,los/wmr (dpa, Reuters)