By reducing consumption starting this summer, the EU could keep the economic impact of a complete absence of Russian gas at an average of 0.4 percent of GDP

Assessing that Russia is using gas as a political weapon and preparing for a possible complete supply cutoff, the European Commission on Wednesday proposed a response – preventive and coordinated reduction of gas use in EU member states by 15 percent from August to March next year, so that gas storage facilities could be filled by winter.

This implies voluntary savings measures, but if they are not sufficient, should an emergency situation really arise, the crisis plan also foresees the possible introduction of mandatory consumption cuts in member states, which altogether should lead to minimizing economic losses for the EU as a whole.

By reducing consumption starting this summer, the EU could keep the economic impact of a complete absence of Russian gas at an average of 0.4 percent of GDP, according to estimates. If no action is taken and the winter is severe, and Russia cuts off supply, the EU could feel the blow of a loss of 1.5 percent of GDP.

European Commission leaders on Wednesday described those measures as preventive and as activating the principle of solidarity in time, before a major crisis occurs.

And the director of the International Energy Agency Fatih Birol this week also published a series of proposed measures that the European Union should undertake and significantly reduce natural gas consumption this summer in order to prepare for the possibility of spending the winter without supplies from Russia. According to him, this concerns about 12 billion cubic meters of gas that the EU could save in the next three months and pump into storage, which is equivalent to about 130 LNG tankers.

Of course, among industry ranks the proposals to reduce consumption, in anticipation of the European Commission's proposal, triggered reactions and warnings. The chemical industry, one of the major gas consumers, explained that it is also important for consumers and for other industries, so it should not be the first to be hit. If there is no gas for chemical production, that means there are “no chemicals for yeast, and without yeast there is no bread,” Politico quotes a lobbyist for that industry in Europe, the director of the European Chemical Industry Council. He then lists that chlorine production is also at issue, which is important for drinking water, but also that this industry produces active ingredients important for medicines.

Some industrialists warn that their plants may suffer damage if a regular gas supply is not ensured because some production processes, such as those in the glass industry, require a constant flow of gas. The secretary general of the European Glass Industry Alliance, also a lobbyist, says that stopping gas for them would mean a “catastrophic option of last resort”.

On the other hand, there are also countries in the EU that have already managed to create sufficient gas reserves for this winter, such as Poland, or countries that are less dependent on gas, such as Spain and Portugal, which would not exactly reduce consumption and thereby worsen the state of their economies. Thus Polish minister Anna Moskwa spoke out against imposing mandatory reduction targets, explaining that the European solidarity mechanism must not lead to a reduction in the energy security of any member state, as Politico reports.

Hungary, meanwhile, has already declared a state of emergency in energy and its plan is not to allow gas exports from the beginning of August, but the European Commissioner for Energy says it has not yet informed Brussels about this. He notes that individual national restrictions affecting cross-border gas deliveries are not justified and can only intensify problems in the current situation on the gas market. One of the associates of the think tank European Policy Centre emphasizes, meanwhile, that it is very important that “energy nationalism” does not occur in Europe because that would increase the costs of the gas crisis for everyone.

As Bloomberg wrote earlier, citing a draft document of the European Commission, simulations by EU gas system operators indicate that in the event of a complete cutoff of gas supplies from Russia this month, gas storage facilities could reach November at an average fill level between 65 and 71 percent, which is well below the targeted 80 percent. If the cutoff occurs in October or later, the risk of insufficient filling is reduced, but there would be very little time to react.

Otherwise, gas supply from Russia is now, it is said, at 30 percent of the average recorded in the period 2016-2021. Russia's supply restrictions so far have affected 12 EU member states, and Germany already sounded the alarm last month because of the risk.

Source: novac.jutarnji.hr