EU to call on member states to ‘immediately’ slash gas usage

The EU is about to be told to cut gas consumption immediately in order to avoid a fuel shortage this winter.

According to a draft paper seen by the Financial Times, the European Commission will give members voluntary gas reduction targets next week.

According to the document, acting together now will be less disruptive and costly, facilitating solidarity and avoiding the need for uncoordinated actions later in a possible crisis situation.

The move comes as the International Energy Agency warned that Europe faced energy rationing unless demand was restricted to allow storage facilities to be filled ahead of winter.

Russia has cut capacity on the main line to Germany over the past month, and the IEA fears that there will be more cuts in the future. Europe is facing a red alert and significant additional reductions are needed to prepare for a tough winter.

Ursula von der Leyen, European Commission president, signed a supply deal with Azeri on Monday that will increase deliveries to Europe by 48 per cent this year and aim to double them by 2025, although Azeri imports make up only a small portion of the EU's total.

One of the countries being courted by the EU is the central Asian nation.

Italy is on the verge of boosting supplies from Algeria, with Italian energy major Eni and France's TotalEnergies and Occidental set to sign a deal with Algeria's Sonatrach on Tuesday for a new $4 billion gas development project, which will eventually bring new supplies on stream.

The IEA, which serves as the west's energy watchdog, said on Monday that efforts to boost supplies were still falling short.

The commission did not include exact figures in its draft paper, but these are expected to be finished before the proposal is published.

A plan leaked last week recommends limiting central heating and cooling in buildings and exempting coal-fired power stations from emissions reduction targets.

EU diplomats and officials have been talking about targets and how they would be implemented in different member states.

If the targets were made mandatory, the penalties could be enforced, according to one EU official.

Europe used to rely on Russia for 40 per cent of its gas, but since the invasion of Ukraine those supplies have been weaponized by Moscow.

Russia has cut off supplies to the Baltic states and other European countries.

According to the commission, in June gas flows from Russia to the EU had fallen to less than 30 percent of average. In a normal year, Europe consumes 400 bcm of gas and imports 155 bcm from Russia.

According to the leaked gas plan, continued cuts to Russian gas supplies could cause a drop in the EU's GDP by as much as 1.5 percent. The commission didn't comment.

In a speech in Baku, Von der Leyen said that the EU needed to turn to more reliable and trustworthy suppliers in order to get rid of Russia.

According to a memo, Azeri supplies will increase to 12 bcm this year, up from 8.1 bcm in 2021, and eventually reach 20 bcm by 2027. The fuel would arrive in the EU through the Southern Gas Corridor, a joint project between the European Union and the Republic of Azerbaijan.

Despite EU efforts to set up a joint gas purchasing effort similar to its co-ordinated buying of Covid vaccines, officials admitted it was competing in a tight market.

In London and Rome, additional reporting was done by the two women.