EU leaders agree on 15% energy cuts to save gas for the winter

The final version of the agreement comes watered down with many caveats and exceptions

Today, EU leaders agreed to implement a watered-down version of the Commission’s Save Gas for a Safe Winter. The plan would see member states try to reduce their natural gas consumption by 15% between August 2022 and March 2023 in light of Russia’s Gazprom supply cuts.

The idea behind the measure is to ensure that even if not all Member States are able to fill up their storage capacity, there would be enough gas to go around and avoid massive shortages across the bloc. At the same time, the agreement was approved with a number of caveats, exemptions and limits for certain member states.

Will 15% be enough to avoid a shortage

Europe will face an increased gas squeeze from Russia’s Gazprom, as the company announced it would slow deliveries down to a trickle from Wednesday, as Reuters reports. Flows to Germany in Nord Stream 1 would go down to a fifth of its capacity.

At the same time, dozens of countries are facing reduced flows of Russian gas, which prompted Brussels to propose a 15% EU-wide gas cut, to save energy for the winter. Although Russian authorities claim that most of the gas reductions are due to technical issues, most EU authorities believe that they are a response to Western sanctions.

The agreement proposes that Member States do voluntary 15% energy savings, which can be mandatory in the case of a supply emergency. However, some countries are exempt from this clause. The agreement, however, requires backing from a majority of countries to trigger the mandatory cuts.

This is one of the many changes imposed on the agreement after it was first supposed to grant the EU Commission powers to trigger the emergency. Reuters reported that, ultimately, some EU diplomats raised concerns that the final regulation may be too watered down to actually make a difference in winter gas savings.

Currently, although national governments have started implementing energy savings, overall, EU countries have reduced consumption by around 5%, despite months of skyrocketing energy prices and a trickle of Russian gas supplies.

Irish Environment Minister Eamon Ryan explained that 15% would probably still not be enough to make up the gap in natural resources.

The opt-outs and the exemptions

When it comes to opt-outs and exemptions, the EU deal will exempt island nations like Ireland, Malta and Cyprus from the mandatory gas cuts. This is because their grid is not connected to the wider EU energy market and even if they have extra reserves, it would not make a difference as they cannot supply them to the rest of the EU.

A similar case is Spain, as it has a very limited export capacity, while it is not reliant on Russian gas.  Cutting its own demand would not help other countries since it lacks export capacity. Nevertheless, the binding 15% quota could be reduced, provided Spain would export what it can.

Spanish Energy Minister Teresa Ribera, who criticized Germany for its overreliance on Russian energy imports earlier this month, was quoted by media, as explaining that Spain understands and is willing to help.

At the same time, countries that are able to meet the EU’s target for filling gas storages to 85% by August could face weaker targets. This would soften the cuts for around a dozen states, including Germany and Italy, based on current storage levels.  These countries will also have a chance to exempt gas-heavy industries like steelmaking from the target cuts of 15%.