Can the EU afford to phase out imports of Russian fuel?
Cutting off Russian energy imports is the aim of the new RepowerEU Roadmap presented by the European Commission. The executive cites security reasons, adding that it will also accelerate the EU's energy transition, but what are the obstacles to achieving this?
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00:00Ending Russian energy dependence is the aim of a new roadmap presented by the European Commission.
00:20The executive cites security reasons, adding that we also allow for better price control and the promotion of renewable energy in the EU.
00:30EU Decoded explains the objectives and the obstacles of the new Repower EU roadmap.
00:37Europe began to move away from its energy dependence on Russia after the large-scale invasion of Ukraine in 2022.
00:44The war led to a spike in energy prices and the EU has since reduced its imports.
00:49Oil has fallen from 27% to 3%, gas has fallen from 45% to 19%.
00:56Coal, which then accounted for 50% of EU consumption, has been banned entirely by sanctions.
01:03The EU executive now wants to phase out all such imports by 2027.
01:09Nevertheless, the EU continues to contribute to Russia's budgets.
01:13Energy imports in 2024 brought in 23 billion euros to Moscow's coffers.
01:19We asked some Europeans about the ends of these imports.
01:22We should be looking externally for these things. I mean, why would we be sending money to countries that are hurting other countries?
01:37Europe does need gas, and finding new sources of gas probably is not as simple as going from day one to day two.
01:58I think, yes, we have to come up with a way to be sustainable, but I think Europe doesn't have the means to do that for the time being. We are still dependent.
02:07Euronews reporter Jorge Liborero has been following the EU's disengagement with Russia.
02:13What's the relation between the sanctions on Russian fuels and this new Repower EU roadmap?
02:20Well, it's related, but it's very different. We have to say sanctions are a foreign policy instrument that is used mainly to curtail the revenues that Russia earns to then fund the war of aggression against Ukraine.
02:33Now, the Repower EU, the main objective is to end the dependency that we have on Russian fuels.
02:40So the logic is the same, but the roadmap is trade and energy policy. So this is very important because it means it doesn't require the unanimity that sanctions require.
02:52Which countries are likely to oppose the phase out of Russian fuels?
02:57Hungary and Slovakia. Nobody would be surprised to know this. They are still reliant on Russian fuels.
03:04They say that the phase out from Russia will increase prices, will make prices more volatile for consumers and companies.
03:11And they also say it violates the sovereign right of every member states to choose their energy mix.
03:18But because we don't need unanimity, it will be easy to pass this?
03:22Exactly. I think this is why the Commission is trying this new way, you know, with trade and energy policy to bypass any individual vetoes that we might see in the future.
03:32How does the Commission intend to break these contracts with Russia and what could be the risks for the companies in this sector?
03:39Well, there are risks because the contracts with Russian companies are usually long term. They cover many years.
03:46So if you break the contract, you have to pay penalties for breaking the contract.
03:51So what the Commission is saying is that by imposing these bans, this prohibition on gas from Russia, the companies will have a strong excuse to invoke what is known as force majeure.
04:03Which allows a company, a client, to break the contract without facing any penalties because there is a circumstance that is beyond their control.
04:13The Repower EU roadmap proposes a ban on new short term contracts for pipeline gas and LNG by the end of 2025.
04:22A ban on imports of these gases under existing long term contracts by the end of 2027.
04:28New restrictions to phase out imports of uranium, enriched uranium and other nuclear materials.
04:35No new contracts with Russian suppliers co-signed by the Euratom supply agency.
04:41Around a third of EU member states will be affected.
04:44Russian gas reaches 10 southern, central and eastern countries.
04:48Oil is used only by Hungary and Slovakia.
04:52Nuclear materials and services are used in seven countries.
04:56Our guest is Svetelina Penkov, a Bulgarian socialist that is also one of the vice chairs of the European Committee on Industry Research and Energy.
05:06Does the EU have a sufficient safety net to avoid major disruptions in the market including high prices by cutting totally the Russian energy?
05:17So we've been trying to cut off the dependencies, create enough storage, find alternative suppliers and routes to ensure that the European industry and our households would not suffer from those shocks.
05:31We've done a lot in terms of legislative framework.
05:34Of course there is still more to be done given that the dependency was quite high but we've cut in terms of the volumes that we use.
05:41Could you be creating new dependencies, particularly from the gas coming from the United States with which we have a trade war ongoing?
05:51Well that's one of the traps that we can fall into.
05:55Once we're trying to switch from one dependency we shouldn't be falling into another.
05:59Basically diversification and risk reduction means that we really need to have many more suppliers and not put all of our eggs into one basket.
06:08I'll give one example of a country that was very responsive in terms of the alternative gas supply that we needed with the start of the war.
06:18This was Azerbaijan for the last, they were the first one actually to proactively offer additional supplies of natural gas to the EU.
06:28And they also have increased their production capacity almost twice to be able to meet the increasing demand from the EU.
06:36And finally, how successful is the EU in transitioning to renewable energy when the European Green Deal is increasingly watered down?
06:46I think the European Green Deal set the infrastructure and the framework which makes it possible now to be speaking about the industrial deal.
06:54When we're speaking about energy stability and predictability of prices, we really need to be very clear that we need a balanced energy mix.
07:04Balanced energy mix means renewable energy sources and baseload power.
07:10I'm really happy that the moods towards nuclear energy in the EU are changing in a positive direction now.
07:18Because to ensure the stability in the energy system, we really do need baseload power, which in this case the only future option for the Union is investing in nuclear energy.
07:29Madam Penkova, thank you very much for your contribution.
07:32The European Commission stated that it wants to stop filling the Kremlin's war chest.
07:37The President Ursula von der Leyen even said no more Russian fuels forever.
07:42But some Member States would like to resume business with Russia after the war, which could lead to lower energy prices.
07:50The European Union is walking a tightrope between protecting economy and ensuring security.
