EU Aims to Give Members Option to Block Russian LNG Imports

(Bloomberg) -- The European Union is targeting a way for member states to have the option to effectively ban Russian shipments of liquefied natural gas without implementing new energy sanctions. 

The bloc’s energy ministers on Tuesday endorsed a proposal that would allow member governments to temporarily prevent Russian exporters from booking the infrastructure capacity needed for the shipments. 

While individual governments would still need consultations, including with other EU countries and the European Commission, to employ the mechanism, the tool could continue to reduce the flow of energy products from Russia.

“We cannot and will not go back to the status quo with Russia as our main gas supplier,” said Kadri Simson, the EU’s energy commissioner. “The possibility for member states to temporarily restrict capacities for gas, including LNG, from Russia and Belarus, is an important addition. We need to protect our security of supply.”

The ministers’ endorsement occurred during a broader policy meeting in Brussels in which they also agreed to extend demand cuts for gas. 

The proposed regulation on LNG still needs approval from the European Parliament, which has offered its own solutions to curtail Russian gas imports. The push for new import-blocking powers for member states is led by Finland, Estonia, Latvia, Lithuania and Poland. 

The move is part of the EU’s shift away from Russian gas after President Vladimir Putin’s invasion of Ukraine. While pipeline flows of natural gas have dropped to record lows, LNG shipments from Moscow have surged.

Simson earlier this month called for Russian LNG shipments to be stopped, saying companies shouldn’t renew long-term contracts once current ones end. Spain, the EU’s top buyer so far this year, asked companies not to sign up for new purchases from Russia. 

Energy ministers also signed off on a regulation that will require new cars to have zero emissions after 2035, marking an effective end to the era of combustion-engine cars. A key pillar of the ambitious Green Deal, the measure was approved following an agreement between the commission and Germany on provisions that would allow room for cars running solely on so-called e-fuels after 2035.

Nuclear Standoff

The gathering also included the first discussion by ministers on a redesign of the region’s electricity markets. Ministers extended a voluntary gas demand reduction target of 15% by another year to help ease the pressure on supplies next winter. It was set to expire at the end of the month.

Talks were particularly intense around the subject of nuclear energy amid a push by France and like-minded countries to receive credit for the technology under the bloc’s plans to scale up renewables to as much as 45% of the energy mix by the end of the decade. The Swedish Presidency is preparing for “non-fossil energy sources” to help contribute toward those goals ahead of negotiations with parliament on Wednesday, according to the latest draft proposal seen by Bloomberg.

France and other like-minded members also called for more investment in nuclear energy. A letter to the commission on scaling up small modular reactors, a nascent technology that allows for smaller facilities than those currently in operation, was also planned.

“Nuclear power will contribute to a decarbonized energy mix, advancing the ambitious climate targets and the important objective to maintain the competitiveness of the EU industry,” according to a draft letter seen by Bloomberg. The EU “must take urgent action to avoid falling behind in reaping the benefits of the development, commercialization and deployment of SMR technology.”

(Updates throughout to reflect actions during meeting.)

©2023 Bloomberg L.P.