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THE BIZNOB – Global Business & Financial News – A Business Journal – Focus On Business Leaders, Technology – Enterpeneurship – Finance – Economy – Politics & LifestyleTHE BIZNOB – Global Business & Financial News – A Business Journal – Focus On Business Leaders, Technology – Enterpeneurship – Finance – Economy – Politics & Lifestyle

Economy

Economy

LNG imports test EU determination to forsake Russian fossil fuel

Model of LNG tanker is seen in front of the EU flag in this illustration taken May 19, 2022. REUTERS... Model of LNG tanker is seen in front of the EU flag in this illustration taken May 19, 2022. REUTERS/Dado Ruvic/Illustration
Model of LNG tanker is seen in front of the EU flag in this illustration taken May 19, 2022. REUTERS... Model of LNG tanker is seen in front of the EU flag in this illustration taken May 19, 2022. REUTERS/Dado Ruvic/Illustration

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European pressure is growing to close a loophole in its attempts to avoid using Russian fossil fuels: liquefied natural gas (LNG).

After Russia invaded Ukraine in February 2022, the EU sanctioned Russian seaborne oil and coal shipments.

Although not sanctioning Russian pipeline gas, it has dramatically reduced its use. Nonetheless, EU members have boosted their overall purchases of Russian LNG, undercutting the bloc’s goal to stop using Russian fossil fuels by 2027.

As a result, the EU has transferred billions of dollars to Russian gas businesses Gazprom and Novatek, who are Russia’s major corporate taxpayers and can fund the Ukrainian war.

CapraView, a worldwide gas forecasting organization, estimates that roughly half of the LNG Russia sold in the first ten months following its invasion of Ukraine went to Europe, generating $14 billion in income.

Last year, Russian LNG imports rose to 22 billion cubic meters (bcm) from 16 in 2021, according to EU research. The EU used to get 155 bcm of pipeline gas from Moscow annually, but several nations have witnessed a large increase since the war.

Kepler found that Belgium and Spain substantially increased Russian LNG purchases in the year since Moscow invaded Ukraine.

The 27-member European Union wants to handle the issue, but there is no agreement on how due to the risks of rising energy costs and increasing Russian energy income.

Last month, EU Energy Commissioner Kadri Simson called it a “reputational risk” for member states and EU corporations to buy Russian LNG while touting their efforts to decrease revenue to Russia.

Last month, Spanish Energy Minister Teresa Ribera urged buyers to avoid new Russian LNG contracts. She warned that EU firms who ceased importing Russian LNG might be penalized for violating their commitments without sanctions.

“I think that should be part of the debate of a sanctions package,” Ribera told Reuters.

“It’s not a lot. Yet, explaining why we still buy LNG is difficult “she remarked.

Several EU members are considering alternatives to penalties because they need unanimity.

This week, member states offered a legislative alternative to restrict Russian enterprises from booking infrastructure capacity to carry LNG to Europe.

The European Parliament must negotiate the idea, part of a gas market law. The EU Parliament wants to restrict all Russian gas imports.

“Unprecedented times necessitate unprecedented measures,” said parliament’s main bill negotiator, former Polish prime minister Jerzy Buzek. He claimed the suggestion fits the EU’s plan to stop using Russian fossil resources.


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