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Brussels calls for extension of gas demand reduction

The EU needs to reduce its dependence on gas imports, which is why the European Commission is proposing to extend the gas demand reduction target to avoid an energy crisis as uncertainty over natural gas supplies grows.

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The European Commission has proposed that EU member states extend their gas reduction targets for the winter of 2023-2024 in the face of growing uncertainty over natural gas supplies. The initial target of reducing gas demand over the period August 2022-March 2023 by 15% compared to the average of the last five years has been largely exceeded thanks to mild weather and high tariffs that have encouraged households and businesses to save money. However, Energy Commissioner Kadri Simson stressed that the situation will not remain favorable, and encouraged member states to extend their target to avoid an energy crisis.

Continued uncertainty about gas supplies

EU member states have sought to reduce their dependence on imported hydrocarbons and cushion the fall in Russian supplies by reducing their demand for gas. However, demand may increase as the economy recovers, while supply may tighten in the global market due to an expected strong rebound in Chinese buying. In addition, the EU is keen to stop importing Russian gas, which could lead to supply challenges.

New gas demand reduction target proposed

The Energy Commissioner has therefore proposed extending the voluntary 15% demand reduction target to next year. This would allow the adequate level of storage to be reached by November, at 90% of the EU’s reserves, as is now required by European law. However, this objective will have to be approved again by the EU-27.

The need to stop purchasing Russian LNG

Kadri Simson also called on the Europeans to stop buying liquefied natural gas (LNG) from Russia, even though they are not subject to sanctions. She encouraged states and companies not to renew their contracts with Russia, pointing out that in five member states the share of Russian LNG had increased. According to her, some landlocked countries such as Hungary have difficulty finding alternatives to Russian pipeline gas, but this is not the case for LNG, a globalized market where shipments are made.

Energy challenges for the EU

Reducing gas consumption is a major challenge for the EU, which must reduce its dependence on gas imports and accelerate the energy transition. The reduction target is likely to be met with increased competition in the global market, with a sharp increase in Chinese purchases expected.

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