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Italy, Poland Raise Concerns About EU Proposal to Cut Gas Use
Spain and Portugal have both publicly opposed the plan EU Commission suggested reducing gas consumption by 15%
Joao Lima
21 July 2022, 19:41 GMT+8
Pipework at the Wierzchowice Underground Gas Storage Facility in Wierzchowice, Poland.
Photographer: Bartek Sadowski/BloombergItaly, Poland and Hungary have raised concerns about the European Union’s proposal for the bloc to cut its natural gas consumption, adding to Spain and Portugal’s public opposition to the plan.
Italian, Polish and Hungarian envoys had significant reservations about the idea presented by the European Commission on Wednesday to reduce gas use by 15% over the next eight months, according to people familiar with the discussions.
The EU plan would affect all households, power producers and industry, and reflects mounting concern that Russia could halt gas exports to the region in retaliation for sanctions following its invasion of Ukraine. A cutoff would threaten EU efforts to replenish stockpiles ahead of winter, potentially jeopardizing security of supply to key sectors and crippling the region’s economy well into next year.
The Commission pointed out that between January and April the EU cut gas consumption by 5% overall, and in member states where there had been a reduction there was no discernible impact on gross domestic product, the people familiar with the discussions said.
Read more: EU Seeks 15% Cut in Gas Use on Russian Supply Squeeze
Portugal is completely against the EU proposal, Secretary of State for Energy Joao Galamba told newspaper Expresso. The country has had to increase natural gas consumption for power generation this year due to low hydropower production amid a drought, and the EU plan is “unsustainable” as it would leave Portugal with no electricity, according to Galamba.
Spain cannot endorse the Commission’s proposal, which ignored key economic and social consequences of Europe-wide rationing, Deputy Prime Minister Teresa Ribera said on Wednesday. She added that cutting gas consumption will force the country to reduce electricity output and halt gas exports to the rest of the continent.
“The commission’s proposal can be the starting point, because it is certainly not the point of arrival,” Ribera said.
LNG Dependence
Portugal and Spain have traditionally relied less on Russian gas supplies than other European countries, and the Iberian Peninsula has only limited pipeline links with the rest of Europe while having a large regasification capacity to receive liquefied natural gas shipments.
Portuguese oil company Galp Energia SGPS SA buys LNG from producers including Nigeria, and utility EDP-Energias de Portugal SA gets LNG shipments from Cheniere Energy Inc. in the US and from Trinidad and Tobago through long-term contracts. Spain has also been relying more on LNG shipments, which in June represented almost 77% of its gas imports.
— With assistance by Alonso Soto
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