EU leaders to discuss escape route from Russian fossil fuels

European Union leaders will tackle ways to wean themselves off Russian fossil fuels on Thursday and debate how quickly to do so, with countries split over whether to sanction oil and gas imports as Moscow wages war in Ukraine.

Russia's invasion of Ukraine prompted Brussels to unveil plans this week to reduce reliance on Europe's top gas supplier this year and end it within the decade.

How to implement those plans, not to mention how to finance them, will be a key topic under discussion at a two-day summit in Versailles, France.

A draft of the summit statement, seen by Reuters, would agree to phase out the EU’s dependency on imports of Russian gas, oil and coal, including by ramping up liquefied natural gas (LNG) imports and speeding up deployment of renewable energy. It did not set a date for the phase-out.

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“Some are asking 2030, some are asking 2027, some are saying now,” an EU official said, referring to the EU member states.

The 27 countries of the EU rely on Russia for 40 per cent of their collective gas needs, 27 per cent of oil imports and 46 per cent of imported coal.

Russian gas flows to Europe have continued at a steady pace since the invasion, which Russia calls a "special military operation", but Moscow has warned that Western sanctions on its oil could prompt it to close a major gas pipeline to Europe.

With energy prices soaring across Europe, some countries want more EU action to contain costs.

“There must be a cap, a European ceiling, on wholesale gas prices,” Belgian prime minister Alexander de Croo told the De Standaard newspaper on Friday.

Other countries warn capping energy prices would undermine the incentive to invest in renewable energy or LNG projects to help countries quit Russian gas.

“There are no short-term fixes. That’s the problem,” a senior EU diplomat said.

Sanctions

The EU leaders will also discuss contingency plans for energy supply disruptions.

The United States, which is less reliant on Russian energy, banned imports of Moscow's oil and gas on Tuesday, while the EU has so far focused its measures on banks and oligarchs, banned Russian aircraft from EU airspace and halted technology exports.

Approval would be needed from all 27 member states but EU officials say the stance of German chancellor Olaf Scholz, who rejects sanctioning energy imports, is shared by other countries.

"While we condemn Russia's armed offensive and we also condemn the war, we will not allow Hungarian families to be made to pay the price," Hungary's prime minister Viktor Orban said on Tuesday, opposing energy sanctions.

Other countries say the hundreds of millions of euros per day Europe pays Russia for fossil fuels must stop – even if that hurts Europe’s economy and pushes soaring energy prices even higher.

"Billions are flowing to Russia via Nord Stream 1," a Polish diplomat said, referring to a gas pipeline from Russia to Germany. "These are billions for which today Ukrainians are paying with their own blood." – Reuters