www.clearygottlieb.com

Managing and Ensuring Security of EU Gas Supplies

The CG EU Energy Disruption Resource Center-Section Breaks-Putty-1200x150

On March 25, 2022, President Ursula von der Leyen and President Biden announced a joint Task Force to reduce Europe’s dependence on Russian fossil fuels and strengthen the European energy market.[1]

The Task Force for Energy Security is charged with ensuring energy security for Ukraine and the EU in preparation for next winter and the following one while supporting the EU’s goal to end its dependence on Russian fossil fuels.

The Task Force is organizing its efforts around two goals:

  • diversifying liquefied natural gas (“LNG”) supplies in alignment with climate objectives
  • reducing non-essential demand[2] for natural gas, with a reduction target of 15%[3].

In this context, the Commission is encouraging Member States to: (i) develop new LNG import infrastructure; (ii) conclude long-term supply contracts in order to secure a sufficient volume of LNG for their own populations; (iii) and develop joint storage facilities.

The key objective is solidarity among Member States. The Commission aims to develop a collective buying power within the EU by implementing solidarity obligations for the benefit of the Member States that are not able to secure the critical gas volumes requirements. These obligations to will also apply to Member States with LNG facilities[4].

[1] See Joint Statement by President von der Leyen and President Biden on European Energy Security, June 27, 2022, Brussels, available here.

[2] The “non-essential consumption”, for instance, outdoor heating and heating for private swimming pools, can be reduced under certain conditions and only for “protected consumers”, not for “vulnerable consumers”.

[3] This target has been adopted by the Proposal for a Council Regulation enhancing solidarity through better coordination of gas purchases, exchanges of gas across borders and reliable price benchmarks, dated October 18, 2022.

[4]  See Article 30 of the Proposal for a Council Regulation enhancing solidarity through better coordination of gas purchases, exchanges of gas across borders and reliable price benchmarks, available here.