Sanctions, tariffs and transparency measures: How the EU plans to phase out Russian gas and LNG by 2027
BRUSSELS, May 18 — The European Commission will next month propose legal measures to fully phase out the EU's Russian gas imports by the end of 2027, and ban spot contracts with Russia by the end of this year.
Here's how that could work.
How will the EU ban Russian gas?
Sanctions are legally the easiest route for the EU to ban Russian gas and liquefied gas imports. However, they require unanimous approval from all 27 EU countries.
Hungary and Slovakia, who want to maintain close political ties with Russia, have vowed to block gas sanctions. The two countries import it via the Turkstream pipeline, and say switching to alternatives would increase energy prices.
As a workaround, the European Commission will in June propose alternative measures that can be approved by a reinforced majority of countries — and which can only be blocked by a group of at least four countries.
In a closed-door meeting of EU countries' ambassadors last week, all bar Hungary and Slovakia welcomed the plan to ban Russian gas, EU diplomats said. Still, some raised concerns about the legal certainty of the EU plan, and its impact on energy prices.
If not sanctions, then how?
The Commission has declined to specify the type of legal tools it's working on. EU diplomats point to a few options.
One would be to impose tariffs on Russian gas and LNG imports. While not an outright ban, tariffs would aim to make new Russian gas deals economically unfeasible.
EU tariffs on Russian fertilisers offer an example of how this could work. There, the EU plans to impose a tariff that rises to 430 euros (US$481.21) per ton within three years — a 'prohibitive' level designed to effectively cut off imports.
Such tariffs could also allow European companies with long-term Russian gas contracts to argue that EU regulation has changed to such an extent that the terms of their contracts are unsustainable, and invoke 'force majeure' to exit these deals.
Lawyers have warned, however, that companies could face financial penalties for doing this.
How can a ban be enforced?
Governments say more transparency on Russian gas trades will be crucial. To achieve this, the EU could use the 'Union Database', a European Commission platform which tracks EU imports of biofuels.
That tool could be re-purposed to track Russian gas and reveal which companies are trading it, allowing officials to target suppliers or traders that breach the ban.
The Commission's June proposals will also include obligations for companies to disclose information on their Russian gas deals.
Who will be most affected?
Around two-thirds of Europe's Russian gas imports are under long-term contracts, which the EU plans to ban by end-2027. The rest is spot trades.
Russia supplied 19 per cent of EU gas imports last year, through LNG and via the TurkStream pipeline supplying Hungary and Slovakia.
That is far below the roughly 45 per cent of Europe's gas that Russia supplied before its full-scale invasion of Ukraine in 2022. Russia's share is expected to fall further, to 13 per cent this year, after deliveries to Europe via Ukrainian pipelines stopped at the end of 2024.
Most EU countries that previously received Russian pipeline supplies have switched to alternatives. Austria, which received Russian gas via Ukraine until late 2024, now imports gas from routes including via Germany and Italy, typically from a mix of suppliers.
For Hungary and Slovakia, moving to alternatives will cost. Russian pipeline gas was sold at a 13-15 per cent discount to other options last year, according to analysis by the Center for the Study of Democracy.
For LNG, the picture is different. Belgium, France and Spain import most of the Russian LNG entering Europe, and can more easily replace this with other supplies from other sources, such as the US, which the EU is under pressure from President Donald Trump to do.
However, some Russian LNG is under long-term contracts that, unless interrupted, would run until as late as 2041. Companies with these contracts include TotalEnergies, SEFE and Naturgy. — Reuters
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Malay Mail
5 hours ago
- Malay Mail
How Juan Antonio Samaranch saved the Olympics — and nearly lost his legacy
PARIS, June 21 — Incoming and outgoing International Olympic Committee presidents Kirsty Coventry and Thomas Bach will salute each other in the handover ceremony on Monday but the person they will thank for the movement's continued existence is Juan Antonio Samaranch Senior. Samaranch Senior — whose son of the same name finished runner-up to Coventry in the IOC presidential election in March — did, like Coventry, serve in a controversial regime prior to being elected in 1980. While Coventry has been sports and arts minister in a Zimbabwean government whose election in 2023 was declared unfair and undemocratic by international observers, Samaranch served at a high level in the fascist Spanish regime of General Francisco Franco. His IOC presidency, which ran from 1980-2001, will for some be forever overshadowed by the 'votes for favours' scandal surrounding the 2002 Salt Lake City Winter Olympics. However, to other more measured voices he is the saviour of the Games who transformed it from a movement at risk of extinction into a vibrant and financially healthy behemoth. 'His legacy is that we have an Olympic Games to talk about,' former IOC marketing executive Terrence Burns told AFP. 'He saved it from financial and political ruin.' Samaranch Senior's earlier career exercised many people when he was IOC chief. After Franco's death and the restoration of the monarchy, Samaranch Senior went on to be ambassador to the Soviet Union. 'I recognised that my political career in Spain was over,' said Samaranch Senior, who always insisted he was not a fascist. It was in Moscow at the 1980 Games, overshadowed by a boycott because of the Soviet invasion of Afghanistan, that he was elected president of the IOC. The IOC members' faith in him was more than repaid. 'Within the IOC I think the Samaranch legacy is fully understood: that he saved the Olympic Movement,' former IOC marketing chief Michael Payne told AFP. His success was developing 'the business model', which included a TV strategy and 'the creation of the TOP programme, the most successful (sports) marketing programme ever,' he added. Payne worked closely with him and said he was a different personality to his son in that he was 'more a listener' than Samaranch Junior, who is a 'great communicator.' 'He was very introverted, a great listener, didn't do a lot of talking, and a great strategic thinker,' said Payne. 'But because he wasn't at the forefront, communicating and explaining, he was often misunderstood. 'He only learned English as his third or fourth language when he was 60.' Participants of the Paris 2024 Olympics and Paralympics game walk in front of the cafeteria of the Olympic Village, in Saint-Denis, northern Paris, on July 22, 2024. — AFP pic 'I cannot regret' Payne said Samaranch's leadership shone through during the Salt Lake City scandal. Six members were to be expelled and Samaranch also oversaw a series of reforms to prevent a repeat of the situation. 'He was calm under unbelievable pressure and stress,' said the 66-year-old Irishman. 'Honestly, you went to the office every day and you didn't know if the organisation would survive... And that was for three months. 'It was brutal. And yet, Samaranch Senior displayed absolute calm, focus.' Nevertheless Samaranch, in a rare moment of letting the mask slip, revealed the effect of what Payne described as 'personal attacks'. 'Retiring myself after the Barcelona Games (in 1992), I could have been a hero, no?' he told the Los Angeles Times in 2000. 'I cannot regret. I have to write my history again.' Payne said despite his diplomatic background Samaranch could play hardball. One incident occurred when Greece refused to allow the Olympic torch to be lit ahead of the 1984 Games in Los Angeles, as they objected to the commercialisation of the event. 'Samaranch sent one of his relatives to Olympia to privately film the lighting of the flame, put it in a miner's lamp, and brought it back to Lausanne,' said Payne. 'Then Samaranch called the Greeks and said, 'just for you to understand, I now have the Olympic flame on my desk. ''Either you will agree to let the Americans come and properly light it or there will never be another torch lighting in Olympia. Because it will be lit at the Olympic Museum in Lausanne.' 'So he wasn't shy of being very tough.' — AFP
Malay Mail
6 hours ago
- Malay Mail
Pope Leo warns politicians of the challenges posed by AI
VATICAN CITY, June 21 — Pope Leo warned politicians today of the challenges posed by the rise of artificial intelligence (AI), addressing its potential impact on younger people as a prime concern. Speaking at an event attended by Italian Prime Minister Giorgia Meloni and parliamentary delegations from 68 countries, Leo revisited a topic that he has raised on a number of occasions during the first few weeks of his papacy. 'In particular, it must not be forgotten that artificial intelligence functions as a tool for the good of human beings, not to diminish them or even to replace them,' Leo said at an event held as part of the Roman Catholic Jubilee or Holy Year. AI proponents say it will speed up scientific and technological progress and help people to carry out routine tasks, granting them more time to pursue higher-value and creative work. The US-born pontiff said attention was needed to protect 'healthy, fair and sound lifestyles, especially for the good of younger generations.' He noted that AI's 'static memory' was in no way comparable to the 'creative, dynamic' power of human memory. 'Our personal life has greater value than any algorithm, and social relationships require spaces for development that far transcend the limited patterns that any soulless machine can pre-package,' he said. Leo, who became pope in May, has spoken previously of the threat posed by AI to jobs and has called on journalists to use it responsibly. — Reuters
Malay Mail
a day ago
- Malay Mail
Second woman accuses French senator of drugging and assault, says she ‘buried it deep inside'
PARIS, June 20 — A French senator accused of drugging an MP with the intent to assault her is facing an accusation from another woman, according to French television. The woman, who has not been named, accused Joel Guerriau of abusing her at his home in Paris in May 2022. The 67-year-old already faces charges over drugging centrist deputy Sandrine Josso's drink in November 2023, an accusation he has denied. 'I decided to bury it deep inside me,' said the woman, speaking with her face covered and voice altered on France 2 late yesterday. The woman said she felt 'dizzy' before coming to her senses in the senator's bedroom, who she knew from political circles and with whom she had a legal dispute. France 2 said the woman has contacted police but has not yet filed a complaint. A lawyer for Guerriau told France 2 that the centre-right senator 'strongly denies these new rumours', calling them 'absurdities with the sole purpose of bringing Joel Guerriau to the public gallows.' France's Horizons party, led by former prime minister Edouard Philippe, suspended Guerriau in November 2023 after he was formally charged with drugging Josso as part of a plot to carry out a sexual assault. Josso — who is nearly two decades his junior — said she felt ill after accepting a drink at the Paris home of the senator, with whom she was not in a relationship. Tests revealed that Josso had ecstasy in her system, prompting her to file the criminal complaint. Guerriau has denied any intention to sexually assault the lawmaker and has rejected the accusation that he deliberately drugged her, describing it as a 'handling error'. He has so far ruled out resigning, calling it 'totally unfair' to step down before the court's ruling. The latest allegation against Guerriau comes months after the world was shocked by Frenchman Dominique Pelicot, who was jailed for 20 years for repeatedly drugging his wife so he and strangers could rape her. The shocking case, involving scores of men, brought widespread attention to the issue of consent. The French Senate passed a bill on Wednesday to include lack of consent in the country's criminal definition of rape, paving the way for its official adoption in the coming months. Consent-based rape laws already exist in several European countries including Germany, the Netherlands, Spain and Sweden. — AFP * If you are experiencing sexual violence, the following hotlines offer free and confidential support: Talian Kasih at 15999 or WhatsApp 019-2615999 (24/7); All Women's Action Society at 016-2374221/016-2284221 (9.30am-5.30pm); and Women's Aid Organisation (WAO) at 03-30008858 or SMS/WhatsApp TINA 018-9888058 (24/7)
