EU Plans First Joint Gas Purchase Ahead of Winter – Reuters

By Kate Abnett

BRUSSELS – The European Union is set to begin joint purchasing of gas ahead of the winter season, according to the bloc’s energy policy chief. This plan aims to reduce dependence on Russian fossil fuels and create a buffer against potential future energy supply disruptions.

Recently, the European Commission proposed a strategy for the EU to phase out Russian fossil fuels by 2027. This strategy includes accelerating investments in renewable energy, implementing energy savings, and transitioning to non-Russian fossil fuel sources.

Since its invasion of Ukraine, Russia, which traditionally supplies 40% of natural gas to the EU, has halted supplies to countries such as Poland, Bulgaria, and Finland due to their refusal to pay in roubles.

In an interview, EU energy policy chief Kadri Simson indicated that joint gas purchasing would commence this year. This initiative will be supported by an EU platform launched last month designed to consolidate the demand from member states and streamline the infrastructure needed to import non-Russian supplies.

Participation in this joint buying effort will be voluntary for EU countries. Analysts have expressed concerns that the initiative may face challenges in securing substantial volumes from the competitive global market and in coordinating the various stakeholders needed to facilitate the purchases rapidly.

Simson noted that by collaborating, EU nations could access supplies that might not otherwise be obtainable. She explained, "There are limited gas volumes available in the global market for this year. Some of these are entering the market due to political decisions," referencing a U.S.-EU agreement from March which entails the U.S. supplying an additional 15 billion cubic meters of liquefied natural gas to Europe this year.

Currently, the EU imports about 155 billion cubic meters of gas annually from Russia.

Brussels has urged member states to primarily rely on renewable energy and energy conservation to compensate for the lost volumes, projecting a 30% decrease in gas demand by 2030 as part of the EU’s climate goals.

However, in the near term, Europe remains reliant on fossil fuels. Recently, the EU enacted a law mandating that countries fill their gas storage to 80% capacity before winter to mitigate the impact of fossil fuel supply disruptions.