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Imports

EU Unveils Plan to Phase Out Russian Gas Imports by 2027

Strategic Insights

— 1 min read

The European Union has taken a crucial step towards reducing its dependence on Russian fossil fuels by announcing a plan to phase out gas imports from Russia by the end of 2027. The two-step plan aims to cancel new contracts and existing short-term spot contracts with Russian suppliers by the end of 2025, followed by a complete ban on remaining imports by 2027. This move comes as part of the EU's efforts to diversify its energy sources and mitigate the impact of Russia's ongoing war in Ukraine.

Key Takeaways:

  • The EU's plan to phase out Russian gas imports involves a two-step approach: canceling new contracts and existing short-term spot contracts by 2025, and banning remaining imports by 2027.
  • Russia still supplies 17.5% of the EU's gas, based on EU data, and as much as 19% according to the Institute for Energy Economics and Financial Analysis.
  • The EU's largest LNG supplier is the US, accounting for 45.3% of the market, and the commission plans to increase purchases of LNG from the US.
  • EU officials acknowledge that phasing out Russian energy is easier said than done, as some member states are more dependent on Moscow's LNG than others.
  • France, for example, would face a heavier impact from any move away from Russian LNG since it has five terminals for its delivery in Europe, and has increased its Russian LNG imports by 81% between 2023 and 2024.
  • The EU executive has highlighted its efforts to reduce dependence on Russian fossil fuels since the 2022 invasion, with a reduction in gas imports from 45% to 18% and oil imports from one-in-five barrels to one-in-fifty.

Statistics:

  • 17.5%: the percentage of EU gas supplies that come from Russia, as per EU data.
  • 19%: the percentage of EU gas supplies that come from Russia, as per the Institute for Energy Economics and Financial Analysis.
  • 45.3%: the percentage of EU LNG market share held by the US.
  • 5: the number of terminals for Russian LNG delivery in Europe, specifically in France.
  • 81%: the increase in French Russian LNG imports between 2023 and 2024.
  • EUR2.68 billion: the income generated by Russia from LNG exports to France in 2024.

Sources:

  • AFP (alliance news)
  • Institute for Energy Economics and Financial Analysis
  • European Commission

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