Brussels wants the preparation, solidarity and reaction capacity of the 27 in the face of a sudden, total and irreversible cut in the gas supply from Russia, and believes that the only way to do this, or at least the best way to proceed, is to equip itself with powers to to be able to coordinate, in case of emergency, a collective, obligatory and linear rationing of up to 15% in gas consumption in the Union. This is stated in the proposal presented this Wednesday with the title of a Plan for the reduction of European gas demand.
The core of this preparation plan for a very harsh winter is to reduce gas consumption in all member states so that if there is a supply cut, the shock is as controlled as possible. A few weeks ago that was the worst scenario, but little by little it has become the base scenario. In the text presented today, the Commission urges a significant voluntary and gradual reduction from now on and over the next eight months, but introduces a notable turn from then on, when specific and binding objectives would be set for each country.
“The Plan has three pillars: switch from gas to alternative sources, encourage the reduction of consumption in industries through market tools and save on air conditioning and heating”, starts the proposal, which puts its finger specifically on the systems outside heating. “All consumers, public administrations, households, owners of public buildings, energy providers and industry can and should take steps to save gas,” he adds. That said, households would not enter into these contingency preparations, they are “protected targets” and the reductions would not affect households, at least in principle. They should be the last to suffer the consequences.
“I know that it is a lot to ask for” recognized the president Ursula Von der Leyen in the presentation of her legislative proposal “but Russia is blackmailing us and uses gas as a weapon”, she has warned, fearing that the coming winters will be the most complicated for the continent . “With this reduction we can arrive safely”, she has said, thinking of 2023.
The idea does not have majority support right now. The Commission proposes, but it is ultimately the national governments (with a negotiation with Parliament in between) who have the last word, and they will address the issue next Tuesday in an Extraordinary Council of Energy Ministers. One thing is solidarity in case of emergencies, as has been seen when Russia cut off shipments to Bulgaria, Finland or Germany, and another thing is an effort on this scale. The same resentments that existed 15 years ago in the financial crisis are repeated now, but the latitudes change. And some of those who were singled out at the time, such as Spain or Portugal, look today at those who have been ignoring the warnings about their energy dependency on Russia and underestimating the calls to diversify. Poland itself, whose economy will suffer a lot, refuses to have mandatory consumption rationing: “The solidarity mechanism should not push for a reduction in anyone’s energy security,” its Climate chief, Anna Moskwa, has said these days.
A Russian cut would mean, at the very least, a drop in the European economy of 1.5%, according to Brussels estimates. The voluntary reduction, of up to 15%, would take place immediately if it had the support of the capitals, between August 1 and the end of March 2023. But if the total tap was closed from Moscow, everything would change. . The Commission would decree a State of Alert and then the mechanism would become mandatory. That 15% goal, which is impossible according to diplomatic sources to pass the filter of the Council at this time, would be calculated based on the average consumption of each national economy in the last five years. At best, those sources say, if the idea were to go ahead it would be with a significant reduction in numbers.
The legal basis would be Article 122 of the Treaty, one that has been mentioned numerous times in recent years and that allows for exceptional measures in emergency situations. “Without prejudice to the other procedures laid down in the Treaties, the Council, on a proposal from the Commission, may decide, in a spirit of solidarity between Member States, on measures appropriate to the economic situation, in particular if serious difficulties arise in the supply of certain products, especially in the field of energy”. This emergency could be declared by the European Commission on its own initiative or at the request of three states. It is something that was considered with the vaccines when there were problems with AstraZeneca and that Spain and Portugal took advantage of for the Iberian solution to be able to limit the price of gas in electricity generation.
But the idea is that whoever wants solidarity will have to earn it. The Commission proposes a governance mechanism to certify that everyone has rolled up their sleeves and is really doing everything they can and should to reduce consumption now and prepare for the coup. Whoever does not do so would not have a ‘right’ to help from his neighbors.
The 27 have until September to send their updated emergency plans to Brussels, in which they must reflect what measures they are going to take to move towards that 15%.
Within the package approved today by the College of Commissioners, and which diplomats are already discussing, there are many complicated elements. Despite the fact that the priority of the legislature is the green transition and the reduction of emissions, the EU assumes that a total cut of supply by Russia would imply reinforcing the commitment to other sources, even if they are polluting. There are countries that are reviewing their decision to give up nuclear energy and the Commission is now opening the door to relax controls on industrial emissions.
Some measures, which had been known, went through forcibly limiting thermostats, both air conditioning and heating, to 25 and 19 degrees, in public buildings or large surfaces. Or reward industries that voluntarily reduce their consumption through tax incentives. The proposal of the community body contemplates incentives through State aid for companies that produce electricity to change their fuels and reinforce alternative sources such as solar energy, biomass or biomethane, as well as the use of oxygen instead of gas in some industrial facilities. The proposal also includes offering auction or bidding processes through which the reduction in gas consumption by large industrial operators is additionally rewarded.
The Commission wants national governments to tighten the screws now, even with the heat wave hitting the continent. Each capital has its emergency plans ready and updated, and the feeling is that a very hard blow is coming in the fall and that all foresight and previous sacrifices are not enough.
The numbers do not come out and if the cut comes suddenly and the 27s have not significantly reduced their consumption and filled the tanks, the shock may be too great. For this reason, the least specific part of the plan involves changing the discourse right now and starting to raise awareness, worry and prepare the public. National measures allow for drastic steps in this preventive phase, such as ultimately removing non-essential operators from the system to save money. No one is going to dare so much, but the feeling is that not enough and what is necessary is being done, far from it. And they ask for a touch of attention.
“To get through the winter we will need solidarity. But for this solidarity to work, each member state must assume its responsibilities. Those who ask for solidarity will have to show that they have implemented all the necessary measures to reduce the demand for Russian gas. On energy saving, it was It is urgent to provide clear guidelines in the worst case scenario to guarantee the continuity of our supply chains, ensure the availability of essential goods and services and keep productive capacities intact.My goal is clear: do everything possible to find substitutes to avoid the closure of industries. For the integrity of the internal market, of course, but above all to preserve jobs and the standard of living of Europeans,” said Commissioner Thierry Breton, responsible for the Internal Market.
Hungary, for example, declared its state of emergency last week, with galloping inflation. But far from going in line with the spirit of solidarity, she chose to activate the mechanisms that actually do the opposite, such as prohibiting gas exports abroad.
The Commission proposes that key companies, such as those in charge of Health or Defense, cannot be affected, and that the supply of raw materials, food and essential components must also be covered. But that the sectors that have the possibility of looking for alternatives, even if they are more expensive, have to do so.
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