EU countries seek deal on weakened plan to cut winter gas use

© Reuters. Model of natural gas pipeline, EU and Russia flags, July 18, 2022. REUTERS/Dado Ruvic/Illustration

By Kate Abnett

BRUSSELS (Reuters) - European Union countries are set to approve a weakened emergency EU proposal to curb their gas demand on Tuesday, with opt-outs allowing them to follow different national paths to prepare for Russian supply cuts.

Europe faces a further gas squeeze this week, after Russian's Gazprom (MCX:GAZP) said it would again reduce flows to Europe through the Nord Stream 1 pipeline. With a dozen EU countries already facing reduced Russian supplies, Brussels has warned that a full cut-off is likely - and is urging countries to prepare by saving gas and storing it for winter.

The European Commission last week proposed emergency rules requiring each country to cut its gas use by 15% from August to March. The target would be voluntary, but the Commission could make it binding in a supply emergency.

However, the plan has faced resistance from a range of governments and countries have redrafted it to include exemptions for numerous countries and industries. Energy ministers from EU countries meet on Tuesday to approve the final version.

"Member states have to make sure that their targets are feasible given their domestic situation," a senior EU diplomat said.

Another diplomat said ministers appeared likely to approve the plan, now that many had won exemptions or softer rules. "There should be a broad consensus," the diplomat said.

But others warned that the weakened rules risked countries failing to save enough gas for winter. While governments including Germany, Europe's biggest gas user, have upped their energy saving measures, EU countries have reduced their combined gas use by just 5%, despite months of soaring prices and dwindling Russian supplies.

Russia supplied 40% of EU gas before its invasion of Ukraine in late February.

The redrafted proposal would exempt from the binding target countries like Ireland and Malta that are not connected to EU gas networks. Countries that export gas to others, and those with near-full gas storage, could face weaker targets, while industries such as chemicals and steel could be exempted.

The draft would require a majority of countries to trigger the binding gas cuts, after many opposed the Commission's original proposal that it have the final say.

The plan has tested EU solidarity, and some states say imposing a single percentage cut across all countries is unfair. Critics include Spain, which does not rely on Russian gas, and Greece, which says it could cope with a Russian cut-off.

A Polish official said the country would oppose any rules that could allow other EU members to use Polish gas reserves.