EU energy ministers to discuss plans for supply shocks from Ukraine crisis

Energy ministers from European Union countries will on Monday discuss preparations for potential energy supply shocks and measures to shore up gas stocks following Russia’s invasion of Ukraine.

The invasion of Ukraine by Russia, Europe’s top gas supplier, has sharpened concerns of disruption to energy supplies and increased scrutiny of European Union countries’ reliance on imported fossil fuels.

EU ministers will “take stock of possible additional actions in terms of safeguarding supply, the use of strategic oil stocks, the management of gas stocks” at the emergency meeting, according to a preparatory note by France, which currently chairs EU ministers’ meetings.

They will also discuss possible assistance to Ukraine’s energy sector, according to the document, seen by Reuters.

Russia supplies around 40% of Europe’s gas. EU rules require all member countries to have a plan to respond to gas supply shocks.

The European Commission has said Europe could cope with a short-term disruption to Russian gas flows. Analysts say a complete or prolonged halt would have severe economic repercussions, requiring emergency measures like factory closures.

Dutch front-month gas prices spiked by around 40% on Thursday, softening on Friday as pipeline flows from Russia stayed steady. Gazprom said it was supplying gas via Ukraine in line with demand from European consumers.

The EU ministers will also consider extra measures to tackle high energy prices. Soaring gas prices in recent months have hiked bills for households and industries, prompting governments in most of the EU’s 27 countries to use subsidies and tax breaks to curb bills.

The European Commission will this week unveil plans to require countries to fill gas storage to minimum levels ahead of winter, as a buffer against supply shocks.

A draft of the plan, seen by Reuters, also includes measures to expand renewable energy faster, as Brussels stresses the need to shift away from imported fossil fuels and rely on locally-produced low-carbon sources – not only to fight climate change, but as a matter of security.

“Let’s now dash into renewables at lightening speed… The faster we move, the sooner we reduce dependency on others,” EU climate policy chief Frans Timmermans said in a tweet on Friday.

To meet its 2030 climate target, the EU expects to reduce gas consumption more than 25% from 2015 levels, although gas is expected to retain a significant share of Europe’s energy mix for at least the next decade.

Source: Reuters