EU to extend 15% gas demand cut

The European Union (EU) has proposed an extension of its target to reduce gas demand by 15 per cent, including next winter, as it adjusts to lower Russian supplies. The EU set up the measure last year during the energy crisis, and it is due to expire at the end of the month. The bloc’s executive arm, the European Commission, has proposed the extension, which has widespread support among the EU’s 27 member states. The proposal is subject to formal approval by the bloc’s energy ministers, who are scheduled to meet next week.

European countries are refilling gas storage sites after Russia halted most of its supplies following its war in Ukraine. The region has depended on liquefied natural gas imports and lower demand to help bridge the gap. However, EU Energy Commissioner Kadri Simson said officials remained cautious as the global market was tight. Last month, the International Energy Agency highlighted the risk of a European gas shortage this year if Moscow were to completely cut off supplies.

According to Eurostat data, the EU reduced its usual gas demand by around 19 per cent between August and January. The commission has set a target of filling underground storage facilities to 90% before the next heating season. Currently, the stockpiles for the region are approximately 56 per cent full on average, according to data from Gas Infrastructure Europe. The benchmark futures on Monday fell below €40 per megawatt-hour for the first time since 2021.

Although the 15 per cent reduction is voluntary, it could become mandatory in an emergency situation. The EU’s proposed extension is a proactive measure to manage the energy crisis and ensure a stable supply of gas. The region is increasingly relying on alternative energy sources, such as renewables and hydrogen, to reduce its dependence on fossil fuels. The EU’s proposal is an example of how countries can collaborate and develop collective solutions to address the challenges posed by climate change and global energy security.