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Factbox-Europe's plan to use less gas this winter

·3-min read
FILE PHOTO: Pipes at the landfall facilities of the 'Nord Stream 1' gas pipeline in Lubmin, Germany

By Kate Abnett

BRUSSELS (Reuters) -European Union countries on Tuesday agreed to an emergency plan to use less gas, as they attempt to save fuel for a winter of uncertain Russian supplies.

Before it invaded Ukraine, Russia was the 27-country EU's top gas supplier, providing 40% of its supply.

Moscow has slashed gas flows to Europe since the invasion in February and this week said it would cut them further, making it harder for EU states to fill their gas storage ahead of winter.

To attempt to get as much gas into storage as possible and prepare for a possible full Russian cut-off, EU countries agreed on Tuesday to reduce their gas demand, albeit with a wide range of exemptions for countries and some industries.

Here's what they agreed:

VOLUNTARY GAS CUTS

Energy ministers agreed that all EU countries should voluntarily cut gas use by 15% from August to March, compared with their average annual use during 2017-2021.

The cuts could be made binding in a supply emergency, but only if a reinforced majority of 15 EU countries agree to this. The European Commission can propose that the binding cuts are triggered if there is a risk of a severe gas storage in Europe, or if at least five countries ask for this.

CARVE-OUTS, EXEMPTIONS

The EU Commission, which drafts EU laws, had initially said every country should face the same binding 15% cut. A swathe of countries had opposed that plan, with Spain, Poland and Greece among the critics.

European governments eventually agreed to allow some countries to reduce or opt out of the binding targets.

Ireland, Malta and Cyprus, which are not connected to other EU countries' gas networks, would be exempted from the binding 15% gas cut. Baltic countries, whose electricity grids are linked to Russia, would be exempted only if Russia severed that link.

States that overachieve an EU target for filling gas storage by August can request weaker targets - potentially softening the gas demand cuts for roughly a dozen countries, based on current storage levels. For example, Germany's storage is 66% full, versus its target to reach 45% of capacity by August 1.

Those with a limited ability to send gas to other EU countries can also request a lower target, provided they export what they can.

That could include Spain, which does not rely on Russian gas, and has said cutting its own demand would not help other countries since it lacks infrastructure capacity to share spare fuel.

Countries can ask to adjust their target if they use gas as a feedstock in critical industries, such as energy-intensive steel-making.

SOLIDARITY, SAVINGS

EU countries have faced a week of negotiations on the emergency gas plan, which initially faced resistance from many EU countries whose reliance on Russian fuel varies significantly.

Greece had opposed the mandatory target and said it could cope with a Russian cut-off. Poland, which had its gas supply cut by Russia in April, said one country's industry should not have to use less gas to help other states facing shortages.

In the end, only Hungary opposed the deal, two EU officials said.

Some countries said they were already well on the way to a 15% gas cut. Italy said it should only need to deliver a further 7% reduction once gas savings it has already made were taken into account.

The Commission said the agreement should save at least 30 billion cubic metres of gas - enough to survive an average winter if Russia fully cut supplies now.

Some EU country officials raised concerns over whether the agreement, with all its opt-outs, would manage this - although some noted it was in countries' interests to save gas for winter, even without an EU requirement to do so.

Levels vary between countries, but EU states overall have cut their combined gas use by just 5%, despite months of Russian supply cuts and surging prices.

(Reporting by Kate Abnett; Editing by Jan Harvey)

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