The EU Plans not to Renew Long-Term Contracts for Natural Gas from 2049
The European Commission will no longer renew long-term contracts for natural gas imports from 2049. According to Bloomberg, the EU will decide to end such practices as part of the green energy transition.
Due to the agency’s information, this initiative is very unprofitable for Russia, which is the largest supplier of natural gas in Europe. According to documents found by Bloomberg, the termination of long-term contracts is part of a plan for a large-scale reconstruction of the energy market.
The European Commission also proposes improved security of supply, as EU countries have hit record prices and severe shortages this winter. The plan runs counter to Russia’s energy policy, which provides about a third of Europe’s gas consumption. Moscow has long advocated long-term contracts and has repeatedly demanded such a deal from the EU in exchange for a fuel supply condition via Ukraine after 2024.
As Bloomberg suggests, the European Commission initiative will also allow member states to respond better to energy crises, because they are concerned that the consumption of gas is used as a political tool by the Kremlin.
Risks for Europe are rising this winter as gas supplies fall to a record low. At the same time, growing tensions between Russia and Ukraine may reduce gas supplies.
Poland stated last week it expected the gas market to stay volatile until a conclusive decision on the controversial Nord Stream 2 pipeline project that would ship more Russian gas to Germany. As the German Chancellor promised, he will try his best to prevent Moscow from using the link to incapacitate flows through Ukraine, while Belarus’s leader restated threats to halt supplies if the West presses on with sanctions in a dispute over migrants.
To boost the EU strength, the Commission wants to propose a more strategic approach to gas storage, including measures to ensure a high filling level at the beginning of the heating season.