That’s why we left! VDL accused of ‘sabotaging’ EU’s security by throwing weight around

Putin given 'vast power' over European economies says expert

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Brussels put forward a proposal to ban long-term contracts to import natural gas into the EU after 2049. The move comes after the bloc’s reliance on Russian gas was made more evident after Russian President Vladimir Putin deliberately withheld gas supplies from transiting into Europe, causing prices to skyrocket to record highs. Moscow reportedly did so to speed up the approval of its new gas pipeline, Nord Stream 2, which will transit gas from Russia into Germany, bypassing Poland and Ukraine.

But Mr Putin and Gazprom, the state-owned gas conglomerate, maintained that Russia has still been fulfilling its contractual obligations.

The Commission’s proposal stated: “No long-term contracts for the supply of unabated fossil gas shall be concluded with a duration beyond the end of the year 2049.”

But economist Sebastien Cochard wrote on Twitter that this move is “actively sabotaging energy security” and “interfering into EU members’ supply decisions”.

This may impact the decision of EU governments and MEPs, the majority of whom need to agree for the proposal to come into force.

Kadri Simson, the EU’s Energy Commissioner, said: “Long-term contracts are normally used to open new sites of gas production and ensure their profitability.

“This ban sends a strong signal that such activities should not be pursued unless emissions are abated. This repeats our clear message that our gas market will be decarbonised by 2050.”

But Mr Cochard also warned that this move could block “a geostrategic energy alliance with Russia”.

Russia has so far taken a rather cautious approach to the proposal but does not seem too keen.

Pavel Sorokin, Russia’s deputy energy minister, said: “Let’s wait for the decision they actually take. Normally, a discussion ends with a more weighted approach.

“So let’s wait until they are done talking and see the final proposals. Then, let’s wait another 10-15 years and see whether they remain in place.”

In 2020, Gazprom Export LLC supplied a total of 174.9 billion cubic metres of gas to European countries

It is responsible for over a third of the supply on the European gas market.

Gazprom has also seen its profits soar due to the surging prices across the bloc, generating record revenue, with a net income of 582bn rubles (£5.86bn) from July to September.

Mr Sorokin warned that the EU’s proposal might not be the best decision, arguing that it could cause energy prices to soar even higher and might result in social unrest.

He said: “Remember what happened with the gilets jaunes in France? It happened because of a higher ecological tax on gasoline. Now imagine what happens when [the commission] reveals the actual cost of all these actions.”

Konstantin Simonov, head of Russia’s energy security fund, also appeared displeased by the proposals, calling their timing “foolish”.

He also warned that this move might even cause the gas crisis to worsen.

He said: “When the spot gas price is skyrocketing, [it] seems the agenda should be the opposite. It’s like Europe is trying to worsen the crisis.

“When experts even in Europe say long-term contracts are a way out, the officials want to cancel them

“It’s very strange. Well, let them go for it, let’s move everything to the spot market and see what happens.”

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But with Russia pledging to go carbon neutral 2060, 10 years after the EU, Mr Sorokin said the transition to clean energy was a shared ambition.

He said: “We absolutely must move toward ecological neutrality, it’s a non-disputed fact that everyone has accepted and everyone is moving to. But we must do it without slogans but with real calculations and a real understanding of prices.”

The EU’s proposals are not the only measure the bloc has taken in an attempt to avert an energy crisis.

The Commission has also proposed a system of joint gas purchases and shared storage for EU countries.

The new system would allow member states’ transmission system operators (TSO) to jointly buy strategic stocks of gas, which could be used in an emergency situation when supplies become extremely scarce.

Countries including Spain, Greece and Romania have argued this would help shore up supplies.

Ms Simson said countries should carry out national risk assessments based on their purchasing and storage needs.

She added: “These reserves could be released in times of emergency and be in line with EU energy market and competition rules.”

At an EU summit today, the bloc will also discuss measures to increase the production of biogas and green hydrogens as it looks to decrease its reliance on gas.

It will also propose cutting entry tariffs for low-carbon gas and integrating these sources into the EU’s gas grid, as well as introducing nuclear to the EU taxonomy.

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