EU's Bold Energy Shift: Phasing Out Russian Gas

The European Commission plans to phase out the EU's Russian gas imports by 2027 and ban spot contracts by the year-end. Legal measures, including tariffs, aim to cut dependency, but unanimous approval is required. Hungary and Slovakia's opposition complicates the process, with potential impacts on energy prices.

The European Commission is set to propose new legal measures next month aimed at eliminating the EU's dependency on Russian gas by 2027. This proposal includes banning spot contracts with Russia by the end of the current year, in a move signaling a significant shift in European energy strategy.

The Commission is looking to sanctions as the most straightforward legal approach to banning Russian gas and liquefied gas imports, though these require concurrence from all 27 EU member countries. Hungary and Slovakia have expressed strong opposition, citing their political connections with Russia and the potential economic impacts of switching to alternative supplies.

Alternative measures that may bypass the need for unanimity are also being considered, such as imposing tariffs designed to make new Russian gas deals financially untenable. The Commission's June proposals are expected to include directives for increased transparency and mandatory disclosures from companies engaging in Russian gas trades.

(With inputs from agencies.)