EU gas demand expected to fall more than Russian imports in 2023

Brussels has said it expects EU gas demand to fall short of total imports from Russia this year.

Gas-saving measures taken by the EU’s 27 member states are estimated to cut consumption by 60 bcm (billion cubic metres) in 2023 compared with the bloc’s average use over the past five years, an internal study seen by the Financial Times found. According to the document of the European Commission.

The document states that this “represents more than the amount of gas still to be imported from Russia in 2023, both in pipelines and (liquefied natural gas) from Russia”. This is also 8 BCM more than the block saved during its peak energy crisis last year.

EU Energy Commissioner Kadri Simson told a meeting of commissioners on Wednesday that the drop in demand was not “good luck” but the result of a series of emergency laws passed in 2022 in the wake of Russia’s full-scale invasion of Ukraine. According to speaking notes seen by Ft.

There was an agreement between the laws that EU countries would voluntarily reduce gas consumption by 15 percent, a target that had been exceeded according to the commission.

An EU official working on energy policy said that “the figures for the shortfall are quite striking”, and that this meant that “Russia has lost its gas leverage over Europe”.

However, analysts noted that the European Union experienced a mild winter in 2022 and that energy-intensive industries cut production due to higher prices.

If Block 60 meets the commission’s expectations of reducing bcm demand, there could be a supply glut and a “big, big price drop”, said Henning Gloystein, director of energy, climate and resources at Eurasia Group. warned.

EU countries in March agreed to extend a 15 percent demand reduction target for another year, even though energy saving efforts are not felt equally across the bloc.

A report published on Wednesday by the European Environment Bureau found that only 14 out of 27 EU countries had introduced mandatory measures to cut energy consumption and five of these, Germany, France, Italy, Spain and Portugal, accounted for 60% of the decline. percentage was made. in demand.

“The strongest measures on gas savings have been implemented in countries importing large amounts of Russian gas, such as Italy and Germany,” the report said.

The report noted that Bulgaria, Latvia and Romania were the only member states that did not implement any energy saving legislation, which may be partly due to already low gas demand in those countries.

Russian imports previously made up about two-fifths of the block’s gas, but have been steadily cut since and after last year’s invasion of Ukraine by Moscow in an effort to prop up prices and reduce EU energy supplies. Has been. The document said preliminary data from the Commission showed EU imports of Russian gas in March were down 74 percent compared to March 2021.

Total annual gas supplies from Russia are set to fall from 150.2 BCM in 2021 to 74.4 BCM in 2022, according to the commission’s data, while imports have so far reached 10.8 BCM in 2023.

Simson said the EU’s total monthly payments to Russia were set to fall from €21.4bn in March 2022 to €2.7bn in March 2023 as a result of the bloc’s gas cuts.

But efforts to completely end the flow of gas from Russia on routes where Moscow has already cut supplies began after being blocked by EU representatives at the G7 summit this month.

Questions also remain over whether the EU can secure any additional gas supplies this year as most of the available LNG has already been contracted. “There is only so much supply and a lot of it is already committed,” said a diplomat from a non-EU country. “It seems that the EU is demanding more than is possible.”