EU members commit to build an integrated gas market and finally cut dependency on Russia

Signing of the Memorandum of Understanding of the High Level Group on Central and South Eastern Europe Gas Connectivity by Maroš Šefčovič, in the presence of Miguel Arias Cañete, standing, on the left, and Ivan Vrdoljak, Croatian Minister for Economy, standing in the centre. (EC Audiovisual Services, 10/07/2015)

Signing of the Memorandum of Understanding of the High Level Group on Central and South Eastern Europe Gas Connectivity by Maroš Šefčovič, in the presence of Miguel Arias Cañete, standing, on the left, and Ivan Vrdoljak, Croatian Minister for Economy, standing in the centre. (EC Audiovisual Services, 10/07/2015)

Last week, amid uncertainty driven by the Greek vote in the referendum, an important step towards Energy Union was taken. Fifteen EU and Energy Community countries signed a deal to accelerate the building of gas infrastructure, and so to reduce their long lasting reliance on Russia. Ministers from Ukraine and other fourteen countries, more than half of them from the former Soviet bloc, met in Dubrovnik, Croatia, on July 10, and agreed to endorse an action plan to improve energy infrastructure and to formally move towards the development of a fully integrated energy market.

Seven Projects

The Memorandum of Understanding, which would “pave the way for the closer integration of the EU and Energy Community energy markets”, as stated by the European Commission, officially launched seven gas-linked projects that should be eligible for financial support. Projects, such as the Trans-Adriatic Pipeline (TAP), which is set to bring gas from Azerbaijan to Europe, an LNG terminal in Croatia and system reinforcement in Bulgaria and Romania, which have been set as top priorities. They also include gas interconnectors between Greece and Bulgaria and between Serbia and Bulgaria.

A crucial plan

EU Commission Vice-President for Energy Union Maroš Šefčovič, who supervised Dubronik agreement, said: “The improvement of infrastructure through realistic and feasible projects is crucial to diversify energy resources and strengthen the region’s resilience to supply shocks”. “Cooperation among the countries of the region is key in this regard. I myself and the entire Commission support this process, notably in the framework of the European Energy Union Strategy”, he then added.

Heavy dependency on Russia

The crisis in Ukraine and Russia’s decision to cancel the Gazprom-led South Stream project, last year, have once more alarmed the EU for the heavy dependency on Russian gas supplies. Russia procures almost 27 percent of the gas that keeps the EU warm in the winter, and a consistent part of it still flows through pipelines crossing Ukraine. The 63 billion cubic metres per annum-South Stream draft was actually a crucial project for Europe, and Russia’s decision in December last year to drop it as a consequence of the Ukrainian crisis left Brussels with the need to have all nations working together on protecting energy supply.

“The EU’s domestic production is decreasing, and it might lead to increased EU dependency on imports,” Sefcovic told the gathering last Friday. “We must make sure that our supplies are diversified. We need to make sure that nobody will be in a dominant position that would negatively influence our energy security.” The official EU statement indeed shows that the infrastructure projects will “help to diversify supply sources”, and that ultimately, each Member State in the region should have access to “at least three different sources of gas”.

The EU is hungry for energy

Although Dubrovnik agreement marks the time for a very ambitious new approach on energy for the whole Old Continent, the question is very delicate, and a full resolution of the heavy need of energy in Europe is possibly still quite far away. First of all because of the size of this “gap” in energy supply European states suffer from. The EU imports 53% of all the energy it consumes at a cost of more than 1 billion Euros per day.

Now, think about all the amounts are currently discussed these days on the subject of bailouts, debts and financial movements, and then read again that figure. Energy alone makes up more than 20% of total imports of the European macro-region. As official EU research explain, the EU imports specifically 90% of its crude oil, 66% of its natural gas, 42% of its coal and other solid fuels and up to 40% of its uranium and other nuclear fuels.

Financial labyrinth

Further, financing such a project won’t be too easy, let’s say. In general, infrastructure projects should be financed by the market participants, as explained by EU’s official channels, but most of the concerns in this kind of matters usually lay on quotas and the breakdown of responsibilities.

However, the EU has specified that, with regard to this particular topic, were necessary “for their timely completion” and the involvement of the European Investment Bank and the European Bank for Reconstruction and Development “will be considered by the CESEC countries”. The EU also stressed that project promoters are also “encouraged in particular to make use of the opportunities offered by the new European Fund for Strategic Investment”.

The topic as a whole and particularly the dependency on external energy supplies of the EU has become more and more important in the last few years. Already in 2010, in order to help protect against gas disruptions, the EU reinforced its security of supply laws with the adoption of the Security of Gas supply and Regulation and tried to raise awareness among its Member States.

“A well-connected EU energy market […] is a pre-condition for creating a resilient Energy Union with a forward-looking climate policy”, as the Energy Commission stated last week, is for sure the basis to “ensure secure, affordable and sustainable energy for all EU citizens and businesses”.

Having all Member States working together and sharing duties is the only key to make it happen.

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Featured Stings

Cameron’s “No Brexit” campaign wins top business support as Tory front breaks

UN member states express their will to tackle global migration but specific actions are still missing

Changing for the change: Medicine in Industry 4.0

The representatives of the regions and the cities know better what the EU needs on migration, trade, poverty and taxation

Resisting EU budget cuts

Huawei answers allegations about its selling prices

Economic recovery won’t tackle youth unemployment problem

Responsible Artificial Intelligence

Progress in medical research: leading or lagging behind?

European Business Summit 2014 Launch Event: “Energising Industrial Growth”

EU’s new sanctions on Russia into force “in the next few days”: strength, weakness or strategy?

EU Commission: Growth first then fiscal consolidation

Alice in Colombia

Why impoverishment and social exclusion grow in the EU; the affluent north also suffers

LEAGUE OF YOUNG VOTERS LAUNCHES TOOL FOR YOUNG PEOPLE TO COMPARE POLITICAL PARTIES AHEAD OF EU ELECTIONS

Medical students: The need for emigration

European Youth Forum welcomes the European Commission’s proposed revision of the Union Code on Visas, however it does not go far enough

Youth platforms call on German Government to break down legal barriers for young volunteers and pupils

More solidarity and interaction between generations needed to challenge age stereotypes and ingrained ageism

Did Draghi ask the Germans to accept a drastic change of austerity policies?

Banks get trillions and the unemployed ECB’s love…

Contact the Sting

Who is to profit from the quasi announced ECB rate cut?

European Youth Forum and youngest MEPs call on President Juncker to keep his promise to Europe’s youth

Regional competitiveness and growth: a Gordian knot for Europe

Europe again the black sheep at the G20 Finance Ministers and Central Bank Governors

Quality Internships: Towards a Toolkit for Employers

Migration crisis update: The “Habsburg Empire” comes back to life while EU loses control

Brexit kick-off: a historic day for the EU anticlockwise

European Youth calls on European Council for urgent action on “humanitarian crisis” and questions the EU/Turkey deal respect of human rights

Why medicine is relevant to the battle against climate change

The MH17 tragedy to put a tombstone on Ukrainian civil war

Does Switzerland really need more medical students?

Macron’s Presidency: what the young generation’s expectations are

Rehn very reserved about growth in Eurozone

Why Eurozone’s problems may end in a few months

Trump stumbles badly on his Russian openings; Europeans wary of Putin

Why Europe is more competitive than the US

Social inclusion: how much should young people hope from the EU? 

Uncovered liabilities of €5 billion may render EU insolvent

The Commission tells Berlin it is legally obliged to help Eurozone out of stagnation

How Germany strives to mold ECB’s monetary policy to her interests

US, Russia oblige each other in Syria and Ukraine selling off allies

ECB asks for more subsidies to banks

Climate change will never be combatted by EU alone while some G20 countries keep procrastinating

Commission criticised member states on blocking financial transaction tax

Movius @ MWC14: Discussing novel Communications Applications over a “CAFÉ”

The ECB tells Berlin that a Germanic Eurozone is unacceptable and doesn’t work

EU Commission: a rise in wages and salaries may help create more jobs

More capital and liquidity for the banks

Migration has set EU’s political clock ticking; the stagnating economy cannot help it and Turkey doesn’t cooperate

Berlin and Paris pursue the financial fragmentation of Eurozone

Is it just visa-free travel that Erdogan demands from the EU to not break the migration deal?

Eurogroup: IMF proposes Germany disposes

Eurozone set to abandon monetary and incomes austerity and adopt growth friendly policies

China Unlimited and the Chinese dream

“As German Chancellor I want to be able to cope with the merger of the real and digital economy”, Angela Merkel from Switzerland; the Sting reports live from World Economic Forum 2015 in Davos

COP21 Paris agreement: a non legally-binding climate pact won’t stop effectively global warming while EU’s Cañete throws hardest part to next Commission

Eurozone needs more than some decimals of growth

The umpteenth Italian overturn takes Renzi and PD to unprecedented victory at EU elections

More Stings?

Speak your Mind Here

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s