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Can the EU Really Phase Out Russian Fossil Fuels?

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The EU has taken the next step in ending its use of Russian fossil fuels, raising tough questions about the durability and legality of a plan aimed at preventing Moscow's weaponization of oil and gas despite Europe's continued reliance on it. The European Commission's REPower EU road map, published this week, is a long-planned response to Russia's 2022 invasion of Ukraine, which forced the EU to rethink its role as a buyer of Russian energy — a key source of funding for Russia's military activity. But the risk to the EU's energy security remains a key concern, and if the war ends, it's not clear political will for the Russia ban will last. To be sure, Europe has drastically reduced its reliance on Russian fossil fuels. Volumes of imported Russian gas have fallen from 150 billion cubic meters in 2021 to 52 Bcm last year. Russia now supplies about 19% of Europe's gas, down from 45% in 2021. Russian oil imports also have shrunk from 27% of the EU's total in early 2022 to just 3% now. Still, the commission said this week that it paid €23 billion ($26 billion) to Russia for energy imports last year, or €1.8 billion per month. Currently, around two-thirds of Russian gas imports are supplied on long-term contracts, with the rest sold as spot purchases. The commission's proposed policy would ban spot contracts for Russian piped gas and LNG by the end of 2025 and prevent new contracts for term supplies. Next month, new proposals will target Russia's "shadow fleet" transporting crude oil along with measures on imports of enriched uranium and other nuclear materials.

Topics:
Sanctions, Gas Supply, LNG Supply, Gas Pipelines, Ukraine Crisis, Trade, Military Conflict, Policy and Regulation, Crude Oil, Opec-Plus Supply, Gas Demand, Gas Spot Markets, LNG Trade, LNG Spot Trade
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