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IEA calls on EU not to renew Gazprom contracts

The Worldwide Vitality Company urged the EU to signal no new provide contracts with Gazprom because it set out a 10-point plan to scale back the area’s imports of Russian fuel by a 3rd inside a yr.

Fuel import contracts overlaying greater than 15 billion cubic metres (bcm) of annual fuel, roughly 12 per cent of Russian provides into Europe, are as a result of expire this yr and shouldn’t be renewed, Fatih Birol, IEA government director stated at a press convention with EU officers on Thursday.

Russia, which gives as a lot as 40 per cent of Europe’s fuel, was utilizing its sources “as an financial and political weapon” Birol stated, making it extra vital than ever to scale back the EU’s dependence on Russian provides and hasten the area’s transition to greener fuels.

The IEA’s proposals, which embody growing fuel flows from different nations, increasing renewables, introducing minimal fuel storage obligations for EU members, and bettering vitality effectivity, come towards the backdrop of the deepening battle in Ukraine and hovering vitality prices.

Wholesale European fuel costs jumped one other 13 per cent on Thursday to a document €199 a megawatt hour, as analysts stated corporations with short-term Gazprom contracts have been in search of to exit these offers and discover various sources of provide.

In accordance with IEA evaluation, the EU may improve imports of fuel from different sources, together with piped fuel from Norway and Azerbaijan and liquefied pure fuel from nations reminiscent of Qatar, by 30 bcm over the following yr. Accelerating new wind and photo voltaic tasks and maximising the usage of bioenergy and nuclear may minimize fuel use by 19 bcm, it stated.

Birol introduced the plan alongside Kadri Simson, the European commissioner for vitality, and Barbara Pompili, French minister for ecological transition in France, which holds the rotating presidency of the EU.

“Ending our dependency on Russian fossil fuels, and on fossil fuels on the whole, is important,” Pompili stated.

The IEA’s proposed measures have been aligned with the EU’s local weather goal of reaching internet zero greenhouse gases by 2050, Birol stated. “We don’t make a compromise right here.”

The query of whether or not to delay the deliberate retirement of European nuclear crops was a “delicate difficulty . . . which can advantage debate,” he added.

Further measures may reduce Europe’s reliance on Russian fuel extra rapidly, however would contain “vital trade-offs,” the IEA stated. The bloc may improve coal- and oil-fired energy technology, for instance, however that may not be aligned with its local weather commitments.

Talking alongside Birol, Simson stated the bloc should transfer to renewables “as quick as technically doable”.

The EU has additionally held latest talks with oil-producing nations in a bid to make sure extra emergency provides of crude can be found in case of disruption to Russian deliveries. Russia provides a few quarter of the EU’s oil wants. Underneath EU guidelines, member states are obliged to maintain emergency shares of oil, equal to a minimum of 90 days of imports.

Kadri stated on Thursday if there was any disruption to grease deliveries, Europe can be “ready”. Addressing the European parliament, he stated: “Throughout Europe a sturdy construction of oil reserves is in place.”

Further reporting Henry Foy in Brussels

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