The European Commission is planning a complete ban on the import of Russian gas into the European Union by the end of 2027. This ambitious goal was unveiled in a plan presented in Strasbourg, outlining the authority’s strategy to end all Russian energy imports. Specific measures to achieve this objective are expected to be presented to member states in June. Data from the EU Commission indicates that in 2024, gas supplies from Russia constituted nearly 19 percent of all EU gas imports, highlighting the significant challenge of completely severing ties.
The proposed import restrictions could significantly impact Sefe, a German energy company owned by the federal government. Sefe, formerly known as Gazprom Germania, was a subsidiary of the Russian state-owned gas giant Gazprom. Following Russia’s invasion of Ukraine and the ensuing energy crisis, the company was nationalized. Currently, Sefe continues to import liquefied natural gas (LNG) from Russia into the EU based on a pre-existing long-term contract. The proposed ban could potentially disrupt this arrangement, creating uncertainty for the company.
While the Commission has not yet specified the exact mechanisms for implementing the import ban, potential avenues include utilizing provisions within EU trade law. However, imposing an import ban through sanctions is considered less likely, as it would require unanimous approval from all EU member states. Hungary, in particular, has consistently opposed such a measure.
The Commission aims to allay concerns among consumers by assuring them that the measures to halt Russian energy imports will be implemented in a way that minimizes price impacts and avoids supply shortages. This assurance underscores the delicate balancing act the EU faces between reducing its dependence on Russian energy and ensuring stable energy supplies for its citizens.
The Commission envisions a phased approach to eliminate Russian gas imports. The initial step involves prohibiting the conclusion of new supply contracts for Russian gas and restricting the acquisition of gas through existing contracts on the spot market. The spot market facilitates the trading of electricity for immediate delivery. The prohibition on spot market purchases is slated to take effect by the end of the year.
Furthermore, the Commission intends to ban the import of Russian gas under existing long-term supply contracts. Recognizing the larger volumes involved, the Commission acknowledged that these imports would need to be phased out gradually. This more comprehensive ban is anticipated to be implemented by the end of 2027. The Commission pledged to engage with affected member states to ensure that the proposals are based on a thorough assessment of the legal and economic consequences, providing companies with the necessary certainty.
EU Commission data reveals that approximately two-thirds of Russian LNG and pipeline gas imports are facilitated through pre-existing long-term contracts. The remaining portion is supplied on a short-term spot basis. This breakdown emphasizes the importance of addressing both long-term contracts and spot market purchases to achieve a complete ban.
The primary impetus behind these plans is Russia’s invasion of Ukraine in February 2022. Subsequently, the EU imposed extensive import bans on Russian energy sources such as coal and oil. However, due to existing dependencies, gas sanctions have been avoided until now. Liquefied natural gas and gas transported via the Turkstream pipeline continue to flow into the EU.
EU Energy Commissioner Dan Jorgensen stated, "Today, the European Union is sending a very clear message to Russia. We will no longer allow Russia to use energy as a weapon against us. We will no longer allow our member states to be blackmailed. We will no longer indirectly contribute to filling the Kremlin’s war chest." Jorgensen’s statement underscores the EU’s determination to disentangle itself from Russian energy dependence and diminish Russia’s ability to exert political pressure.
Sefe, the German energy company, plays a significant role in importing LNG into the EU. According to a report earlier this year, Sefe imported over six times more LNG into the European Union in the past year compared to the year before. Data from the commodity analysis firm Kpler indicated that 5.66 billion cubic meters of LNG imported by Sefe from Russia arrived in Dunkirk, France, located on the English Channel. This substantial increase highlights Sefe’s critical role in facilitating Russian LNG imports into the EU.
Sefe maintains that there is currently no legal basis for terminating or suspending an existing legacy contract between a Russian supplier and the company, as Europe has not imposed sanctions on the import of Russian LNG. The company also asserts that even if Sefe were to refuse to accept the gas, it would still be obligated to pay for the agreed-upon quantities. Furthermore, Sefe argues that refusing to take the gas would simply allow the supplier to resell those quantities, which would ultimately support the Russian economy. This perspective highlights the complex contractual and economic considerations involved in disentangling from Russian gas supplies.
Russian oil and uranium continue to enter the EU as well. The Commission intends to present proposals for measures against Russian imports of enriched uranium in the nuclear energy sector. Restrictions are also planned for new supply contracts for uranium, enriched uranium, and other nuclear materials from Russia, co-signed by the Euratom Supply Agency (ESA). Regarding oil, the roadmap envisions new measures to combat the shadow fleet, which Russia uses to circumvent sanctions and a price cap. These measures demonstrate the EU’s commitment to addressing energy imports across various sectors and closing loopholes that allow Russia to continue profiting from its energy resources. The complexity of the situation will require many new rules and legal battles to resolve the status of Russian energy in Europe.
