LONDON/BRUSSELS (Reuters) – Europe may lower Russian gasoline imports by greater than a 3rd inside a yr, the Worldwide Power Company (IEA) stated on Thursday in its 10-point plan on decreasing reliance on Russia.
The European Union depends upon Russia for about 40% of its gasoline wants, making it the bloc’s greatest provider, however the Russian invasion of Ukraine has sharpened considerations about this reliance and the likelihood for provide disruptions.
“Russia’s use of its pure gasoline assets as an financial and political weapon present Europe must act rapidly to be able to face appreciable uncertainty over Russian gasoline provides subsequent winter,” stated Fatih Birol, govt director of the Paris-based company, which represents 31 principally industrialised nations however not Russia.
Moscow denies utilizing gasoline as a weapon. Gazprom, the state-run agency with a monopoly on Russian gasoline exports by pipeline, says it has met all its long-term contracts – which shoppers verify – despite the fact that flows dipped in 2021.
Russian gasoline deliveries have held regular since Russia launched its invasion final week – motion Moscow calls a “particular operation” – however costs have nonetheless shot up in a gasoline market that was already tight even earlier than the battle raised new considerations.
The benchmark Dutch front-month gasoline worth hit a file excessive of 199 euros ($220) per megawatt hour on Thursday morning. The worth was under 16 euros at the moment a yr in the past.
The IEA stated Europe may safe about 30 billion cubic metres (bcm) of gasoline a yr – about 20% of the quantity Russia often provides – from Qatar, the US and others.
Qatar has stated no single nation has the capability to switch Russian provides to Europe.
The IEA stated European nations mustn’t signal new gasoline contracts with Russia, introduce minimal gasoline storage obligations and speed up new wind and solar energy initiatives.
TIGHT GLOBAL MARKET
It additionally referred to as for extra vitality effectivity measures and stated customers ought to flip down thermostats by 1 diploma Celsius, a transfer it stated may save about 10 bcm of gasoline a yr.
“Taken collectively, these steps may cut back the European Union’s imports of Russian gasoline by greater than 50 billion cubic metres, or over one third, inside a yr,” the IEA stated.
Analysts say that, in idea, Europe’s unused pipeline and liquefied pure gasoline (LNG) infrastructure may deal with sufficient gasoline from different suppliers to nearly substitute Russia, however in follow this may be restricted by international liquefaction capability.
The European Fee will subsequent week suggest new steps to chop reliance on Russia and assist cope with any provide shocks, together with guaranteeing international locations fill gasoline storage to a minimal stage earlier than winter and accelerating the rollout of renewables, in keeping with a draft seen by Reuters.
The EU can be negotiating new measures to sort out local weather change, similar to boosting renewables utilization, steps it sees as an enduring answer to ending dependence on fossil fuels and that would lower EU reliance on gasoline by 23% by 2030.
However these wouldn’t tackle a short-term provide crunch.
The IEA outlined short-term measures similar to redirecting windfall earnings made by vitality companies, secured from excessive gasoline costs, to help clients dealing with increased payments.
The European Fee is anticipated to suggest that member states tax windfall earnings of vitality firms to help funding in renewables and compensate customers.
($1 = 0.9038 euros)
Reporting by Susanna Twidale and Kate Abnett; Modifying by Kirsten Donovan and Edmund Blair