The European Union this Wednesday (20) presented a plan to reduce the consumption of natural gas and reduce Russia’s influence on the region’s energy security.
The original idea is for European Union countries to voluntarily reduce natural gas demand by 15% between August of this year and March 2023. In addition, a bill will also be introduced in the European Parliament so that this reduction can become binding by consensus among the members of the bloc.
“The recent escalation of Russia’s gas supply problems indicates a significant risk that a complete and prolonged gas supply disruption could occur abruptly and unilaterally,” the European Union said in a document detailing the measures.
“Coordinated, immediate and proactive action at European level can prevent serious damage to the economy and citizens from gas supply disruptions,” he added.
According to the European Union, adopting the plan during the northern hemisphere summer would help store more natural gas for the winter a time when fuel consumption increases mainly due to heating needs.
The market reaction to the announcement was slightly negative. That’s because the possibility of the Russians cutting off Europe’s gas supplies had been ignored by European authorities for a few days, and investors had therefore taken the risk of a deeper economic slowdown in Europe.
The Stoxx 50 index, which combines the shares of large European companies, was down 0.78% around 10:50 am, while natural gas on the ICE futures market was up just 0.3%.
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Suspicions that Russia might halt the flow of natural gas to Europe began a few days before Nord Stream’s scheduled maintenance. The pipeline carries natural gas between the two regions and was suspended on July 11, with plans to resume later this week.
The European Union has publicly stated that Russian President Vladimir Putin would likely seize the opportunity to cut gas supplies in order to punish EU countries for their military aid to Ukraine. The Russians invaded Ukrainian territory in late February, starting a war condemned by both the European Union and the United States.
Fears about the fall in gas supplies were confirmed, according to Dutch bank ING, after Putin said natural gas flow in the Nord Stream could drop to 30 million cubic meters per day if a turbine used in the system is not replaced at the same time. Time. “That would only use 20% of Nord Stream’s capacity,” the bank said.
It is worth noting that around half of the 27 members of the European Union are already being hurt by the reduced supply of natural gas from Russia.