logo
How the EU plans to ban Russian gas

How the EU plans to ban Russian gas

Reuters17-06-2025
June 17 (Reuters) - The European Commission on Tuesday proposed legally-binding measures to cut off the European Union's imports of Russian gas and liquefied natural gas imports by the end of 2027, which would end decades-old energy relations with Europe's former top gas supplier.
Here are some details about the proposals, which still need approval from EU countries and the European Parliament.
The ban would take effect in stages. First, from Jan. 1, 2026, the EU would ban imports under any new Russian gas and LNG deals signed before the end of this year.
The EU would then ban imports under short-term contracts from June 17, 2026, for contracts signed before June 17, 2025.
Finally, the EU would ban imports under existing long-term Russian gas and LNG contracts from Jan. 1, 2028. That would sever supply contracts of companies including TotalEnergies (TTEF.PA), opens new tab and Naturgy (NTGY.MC), opens new tab, which were designed to extend into the 2030s.
EU LNG terminals would be banned from servicing Russian customers from Jan. 1 2026, under contracts signed after June 17, 2027. Services under existing long-term contracts must halt by Jan. 1, 2028.
Around two-thirds of Europe's Russian gas imports are under long-term contracts. The rest is short-term and spot trades.
The ban is based on EU trade and energy law - meaning it can be approved with support from a reinforced majority of countries and a majority of the European Parliament.
A reinforced majority means having the support of at least 15 of the EU's 27 member countries, representing at least 65% of the EU's population.
The Commission chose this route to avoid its proposals being vetoed by Slovakia and Hungary, whose governments have opposed the ban. Sanctions would be the strongest legal basis for banning Russian gas, but require unanimous approval from all EU countries.
Spain, Belgium, the Netherlands and France - which import Russian LNG - have said they fully support the ban, while emphasising it must be legally strong enough to avoid exposing firms to penalties or arbitration, EU diplomats told Reuters.
Lawyers have said it would be difficult to eliminate this risk if the EU does not use sanctions. European buyers have "take-or-pay" contracts with Gazprom (GAZP.MM), opens new tab, which require those that refuse deliveries to pay for much of the contracted gas.
Commission officials said the legal measures will allow companies to invoke the contractual clause of "force majeure" - an unforeseeable event - to break their Russian gas contracts, if the contracts include this clause.
To enforce the ban, the EU will require companies to disclose the volumes, duration and destination clauses of their Russian gas contracts to customs authorities.
Russia supplied 19% of EU gas imports last year, through LNG and via the TurkStream pipeline supplying Hungary and Slovakia - far below the 45% share Russia supplied before its full-scale invasion of Ukraine in 2022.
Russia's share is expected to fall further, to 13% this year.
The Commission said its proposals would not threaten Europe's energy supplies, since EU countries have spare LNG import capacity or alternative pipeline routes through which they can import non-Russian gas.
The EU has infrastructure capacity to import 250 billion cubic metres of LNG per year, but last year used less than half of this, the Commission said.
To replace Russian supplies, the EU has signalled willingness to increase LNG imports from the United States, which Brussels is under pressure from President Donald Trump to do.
For Hungary and Slovakia, switching to alternatives will cost. Russian pipeline gas was sold at a 13-15% discount to other options last year, according the Center for the Study of Democracy.
Unlike with gas, the EU has imposed sanctions on most Russian oil imports, with exceptions for Slovakia and Hungary, which still import more than 80% of their oil from Russia.
The Commission proposed a legal obligation on Tuesday for Slovakia and Hungary to produce national plans for how they will quit Russian oil by end-2027. Just 3% of total EU oil imports now come from Russia.
Brussels will also propose measures to limit the EU's reliance on nuclear fuel from Russia, but has not confirmed a date for these proposals.
Orange background

Try Our AI Features

Explore what Daily8 AI can do for you:

Comments

No comments yet...

Related Articles

Out-gunned Europe accepts least-worst US trade deal
Out-gunned Europe accepts least-worst US trade deal

Reuters

time22 minutes ago

  • Reuters

Out-gunned Europe accepts least-worst US trade deal

LONDON, July 27 (Reuters) - In the end, Europe found it lacked the leverage to pull Donald Trump's America into a trade pact on its terms and so has signed up to a deal it can just about stomach - albeit one that is clearly skewed in the U.S.'s favour. As such, Sunday's agreement on a blanket 15% tariff after a months-long stand-off is a reality check on the aspirations of the 27-country European Union to become an economic power able to stand up to the likes of the United States or China. The cold shower is all the more bracing given that the EU has long portrayed itself as an export superpower and champion of rules-based commerce for the benefit both of its own soft power and the global economy as a whole. For sure, the new tariff that will now be applied is a lot more digestible than the 30% "reciprocal" tariff which Trump threatened to invoke in a few days. While it should ensure Europe avoids recession, it will likely keep its economy in the doldrums: it sits somewhere between two tariff scenarios the European Central Bank last month forecast would mean 0.5-0.9% economic growth this year compared to just over 1% in a trade tension-free environment. But this is nonetheless a landing point that would have been scarcely imaginable only months ago in the pre-Trump 2.0 era, when the EU along with much of the world could count on U.S. tariffs averaging out at around 1.5%. Even when Britain agreed a baseline tariff of 10% with the United States back in May, EU officials were adamant they could do better and - convinced the bloc had the economic heft to square up to Trump - pushed for a "zero-for-zero" tariff pact. It took a few weeks of fruitless talks with their U.S. counterparts for the Europeans to accept that 10% was the best they could get and a few weeks more to take the same 15% baseline which the United States agreed with Japan last week. "The EU does not have more leverage than the U.S., and the Trump administration is not rushing things," said one senior official in a European capital who was being briefed on last week's negotiations as they closed in around the 15% level. That official and others pointed to the pressure from Europe's export-oriented businesses to clinch a deal and so ease the levels of uncertainty starting to hit businesses from Finland's Nokia ( opens new tab to Swedish steelmaker SSAB ( opens new tab. "We were dealt a bad hand. This deal is the best possible play under the circumstances," said one EU diplomat. "Recent months have clearly shown how damaging uncertainty in global trade is for European businesses." That imbalance - or what the trade negotiators have been calling "asymmetry" - is manifest in the final deal. Not only is it expected that the EU will now call off any retaliation and remain open to U.S. goods on existing terms, but it has also pledged $600 billion of investment in the United States. The time-frame for that remains undefined, as do other details of the accord for now. As talks unfolded, it became clear that the EU came to the conclusion it had more to lose from all-out confrontation. The retaliatory measures it threatened totalled some 93 billion euros - less than half its U.S. goods trade surplus of nearly 200 billion euros. True, a growing number of EU capitals were also ready to envisage wide-ranging anti-coercion measures that would have allowed the bloc to target the services trade in which the United States had a surplus of some $75 billion last year. But even then, there was no clear majority for targeting the U.S. digital services which European citizens enjoy and for which there are scant homegrown alternatives - from Netflix (NFLX.O), opens new tab to Uber (UBER.N), opens new tab to Microsoft (MSFT.O), opens new tab cloud services. It remains to be seen whether this will encourage European leaders to accelerate the economic reforms and diversification of trading allies to which they have long paid lip service but which have been held back by national divisions. Describing the deal as a painful compromise that was an "existential threat" for many of its members, Germany's BGA wholesale and export association said it was time for Europe to reduce its reliance on its biggest trading partner. "Let's look on the past months as a wake-up call," said BGA President Dirk Jandura. "Europe must now prepare itself strategically for the future - we need new trade deals with the biggest industrial powers of the world."

Euro gains as investors cautiously welcome US-EU trade deal
Euro gains as investors cautiously welcome US-EU trade deal

Reuters

time22 minutes ago

  • Reuters

Euro gains as investors cautiously welcome US-EU trade deal

NEW YORK, July 27 (Reuters) - Investors cautiously embraced news of a trade deal on Sunday between the U.S. and European Union that is expected to bring clarity for companies and some certainty to markets ahead of U.S. President Donald Trump's Friday tariffs deadline. The euro rose against the U.S. dollar , up 0.27% at $1.177. The currency also gained 0.2% against both the pound and the Japanese yen . Trump announced the United States has struck a framework trade deal with the EU that includes a 15% tariff on EU goods entering the U.S. and significant EU purchases of U.S. energy and military equipment. European Commission President Ursula von der Leyen said the deal includes "cars, semiconductors and pharmas." The deal is similar to parts of the framework agreement the U.S. clinched with Japan last week. "It's really in line with the Japan deal, and I assume investors will view it positively as they viewed the Japan deal," said Rick Meckler, partner at Cherry Lane Investments in New Vernon, New Jersey. Optimism over easing trade tensions broadly helped push U.S. stocks to record highs last week and lifted European shares to their highest since early June. Trump's April 2 "Liberation Day" announcement of sweeping global tariffs sent stocks plunging in the immediate aftermath, due to spiking fears about a recession that have since faded. "I don't think equities in particular needed much of an excuse to rally and now they've got one," said Michael Brown, senior research strategist at Pepperstone in London. Still, investors have been bracing for increased volatility heading into August 1, which the U.S. has set as a deadline for raising levies on a broad swath of trading partners. "We will need to see how long the sides stick to the deal. From a market perspective, it is reassuring in the sense that having a deal is better than not having a deal," Eric Winograd, chief economist at investment management firm AllianceBernstein, said about the EU agreement. The announcement came after Von der Leyen traveled to Scotland for talks with Trump to push a hard-fought deal over the line.

Online safety laws behind surge in VPN use
Online safety laws behind surge in VPN use

Telegraph

time22 minutes ago

  • Telegraph

Online safety laws behind surge in VPN use

Apps offering VPNs, which are commonly used in authoritarian countries to get around internet censorship, made up half of the top 10 most popular free apps on the UK's App Store this weekend, according to the latest Apple rankings. Proton VPN overtook ChatGPT to become the top free app in the UK. The Swiss-based company said it had seen a more than 1800 per cent increase in daily sign-ups from UK-based users since Friday. On X, Proton said: 'We would normally associate these large spikes in sign-ups with major civil unrest. This clearly shows that adults are concerned about the impact universal age verification laws will have on their privacy'. Nord, another VPN provider, said there had been a 1000 per cent increase in UK purchases of VPN subscriptions since the new rules kicked in. Data from Google Trends also showed a significant increase in search queries for VPNs in the UK this weekend, with up to 10 times more people looking for VPNs at peak times. Rules 'not foolproof' for teenagers Oliver Griffiths, Ofcom group director for online safety, told the Financial Times that the watchdog's age verification rules would not be 'foolproof' for a 'determined teenager', just as under-18s are sometimes able to buy alcohol in UK stores. Mr Griffiths said: 'There are opportunities for people to use VPNs, but this is part of a broader system approach.' Opposition to the new rules has grown in recent days, with a petition submitted through the UK Parliament website attracting more than 280,000 signatures. The petition demands that the Online Safety Act be withdrawn, with a surge of signatures being added to the document in the past week. Under the Online Safety Act, websites that ignore the new laws could be fined up to £18m, or 10 per cent of worldwide revenue.

DOWNLOAD THE APP

Get Started Now: Download the App

Ready to dive into a world of global content with local flavor? Download Daily8 app today from your preferred app store and start exploring.
app-storeplay-store