Gazprom to be kicked out of the EU?
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The European Union is going to phase out natural gas to combat climate change by 2050.
Against the backdrop of the energy crisis, the EU is still making plans to completely abandon gas. Fuel, the main supplier of which to the European Union remains Russia and Gazprom. What does the EU’s global reform envisage?
Hydrogen instead of gas
The main alternative to gas is hydrogen. Technologies for its production exist, but they are very expensive. The EU hopes to invest in infrastructure and, through government support, reduce the cost and make profitable the production of hydrogen fuel cells and the production of hydrogen from renewable sources.
In addition, the EU is going to abandon long-term gas contracts. These are the bilateral contracts tied to the oil price that Gazprom concludes. However, the EU sees a free market as a guarantee of stable supply. The EU acknowledged that it would not be possible to immediately abandon natural gas, but in order to get off the needle, it proposed limiting the duration of long-term contracts for its purchase by 2049.
One of the main reasons for the unprecedented jump in gas prices in recent months in Europe is the lack of gas in underground storage facilities. Europe points the finger at Gazprom, which replies that it is fulfilling all contracts. In order not to find itself in such a situation anymore, the European Commission proposed to create a strategic gas reserve in case of interruptions, following the example of the strategic oil reserve in the United States.
These three points show that, despite the high cost, covid crisis and growing discontent of the population, the EU does not abandon the “green restructuring” of the economy. Moreover, he is ready to aggravate the confrontation with Russia, which he does not directly accuse of gas blackmail, but constantly points out the inadmissibility of using gas as an instrument of political pressure, especially on the neighbors – Ukraine, Moldova and Georgia, with which the EU has concluded partnership agreement.
Russian rate
Russia, on the other hand, does not abandon its stake on fossil fuel exports as the basis of the economy in the future and continues to build export gas pipelines, including the recently commissioned but not yet approved Nord Stream 2 to Germany along the bottom of the Baltic Sea, bypassing Ukraine.
Europe buys about a third of all gas it consumes from Russia, and the Kremlin has repeatedly expressed dissatisfaction with the reform of the EU’s energy market. Putin called it the reason for the current rise in gas prices, and the European Commission – “clever”.
“The clever guys in the last European Commission invented market pricing for gas,” Putin said in September. “Now, please shave, you got the desired result … And those who agreed to conclude long-term contracts with us in Europe now can only rub their hands and rejoice “.
Will it work?
Now gas occupies 25% of the total energy balance of Europe, in the production of electricity – 20%, heat – almost 40%.
The EU consumes 350-400 billion cubic meters per year, 95% falls on natural gas, and only 5% – on the very “clean” gases that the European Commission wooed him to replace.
In the future, they should gradually replace fossil natural gas and occupy a very significant share of the gas component of the total energy balance by 2050, according to the European Commission’s proposals.
Not everyone likes the agility of Brussels officials. Record gas prices hit the pockets of voters, and the authorities of the poorer EU countries fear that, coupled with pandemic fatigue, the growing costs of electricity and heating will overwhelm the cup of patience. Poland has already stuttered about revising its emission reduction targets due to the gas crisis.
On the other hand, Germany – the largest economy, the most populous country and the industrial center of Europe – has confirmed its determination to zero its own emissions by 2045, 5 years ahead of the pan-European target.
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