Brussels urges EU to turn down heat to resist Russian gas curbs

Brussels wants member states to turn down the heating and compensate industries for curbing gas use to prevent an energy crisis as Russia cuts supplies.

EU countries should give companies, which often buy energy on long-term contracts, financial incentives to reduce demand for gas as part of measures to curb use ahead of winter, according to a draft “gas demand reduction plan” prepared by the European Commission and seen by the Financial Times.

Countries are encouraged to switch to renewables or postpone the shutdown of nuclear power plants to cut gas use. Coal-fired power stations restarted to make up for cuts to Russian gas supplies could be exempted from industrial emissions targets under the plans.

The commission, the EU’s executive, suggests member states should limit heating in public buildings to 19C and cooling to 25C and start information campaigns to promote ways to save energy.

The EU is rushing to find ways to reduce its reliance on Russian gas as part of its plans to try to hit Moscow economically as punishment for its invasion of Ukraine. Europe also fears Russia’s ability to weaponize gas, curtailing supplies, in retaliation for western support of Ukraine.

The commission said in the draft text that measures taken now could cut the impact of “sudden supply disruption by one-third”.

“There’s not a big game-changer in [the plan] but I think it will go down well in every capital,” said one EU diplomat.

Until this year Russia supplied about 40 per cent of the EU’s gas. But since mid-June, according to the commission paper, flows through Nord Stream 1, the biggest pipeline from Russia to the EU, have been cut by 60 per cent.

Overall flows from Russia are now less than 30 per cent of the average between 2016 and 2021, according to the draft paper.

In May, the EU asked member states to fill up gas storage facilities to 80 per cent of their capacity by November to have enough energy for the winter. But Moscow’s recent moves to shut off supplies to the Baltic states, Finland, Poland and Bulgaria and reduce flows to Germany and Italy have left countries unlikely to meet this target.

EU-wide gas storage is now 62 per cent full, according to data from Gas Infrastructure Europe, but in some countries, such as Bulgaria and Croatia, the figure is only about 38 per cent.

The draft paper also suggests that certain industries could move operations from areas where demand is tightest to regions where there is better energy supply, and guides countries on which consumers should be given priority in the event of severe gas reductions. It recognizes the supply chain impact of shutting off certain sectors such as the chemical or glass industry.

Jori Ringman, director-general of Cepi, the European pulp and paper industry body, said prioritizing certain sectors was “not about a choice between protecting citizens and continuing industrial production . . . disruption would affect paper packaging for food and pharmaceuticals, and the entire logistics of the EU, as well as essential hygiene products”.

The final plans are expected to be published next week. Brussels also hopes to increase the amount EU countries can authorize in state aid to boost investment in renewable energy and alternative fuel sources.

The commission appears to have taken on board many concerns of EU industry in its draft document, focusing on market incentives to reduce gas consumption and on the wider implications for the European supply chain. “We are happy that we have been heard,” said one industry executive.

Alexandre Affre, deputy director-general of BusinessEurope, the employers’ federation, said: “Everything should be done to avoid forced curtailment of production. To avoid this, market incentives to reduce consumption of gas between now and winter are very much needed.”

The commission declined to comment.

Additional reporting by Andy Bounds

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