New EU Gas Emergency Plan: "Must Prepare for the Worst Case"

People ♦ Published: July 22, 2022; 09:00 ♦ (Vindobona)

Recently, the European Commission presented its new EU Gas Emergency Plan under the title "Save gas for a safe winter". In this, the European Commission assumes that consumers can save up to 15% gas. The Austrian Federal Economic Chamber is pleased with the Commission's plans.

The Commission wants to reduce dependence on Russia. / Picture: © Gazprom

Recently, the European Commission presented its new EU Gas Emergency Plan under the title "Save gas for a safe winter". In this plan, the European Commission expects that consumers, public authorities, owners of public buildings, energy suppliers and industrial companies, among others, can save gas and thus reduce gas consumption in Europe by 15 percent by next spring.

In addition, the plan foresees that the Commission will be given the possibility to declare a "Union alert" for security of supply after consulting the Member States.

These are core elements of the Commission's proposals for a new legal instrument and a European gas demand reduction plan presented by the European Commission. Commission President Ursula von der Leyen said, "Russia is blackmailing us, Russia is using its gas supplies as a weapon. Europe must be prepared."

The Commission will also speed up work on diversifying energy suppliers, including joint gas purchasing, so that the EU has more options for procuring gas from alternative sources.

The European Union faces further cuts in gas supplies from Russia as the Kremlin uses its gas exports as a weapon. Almost half of the member states have already been affected by a reduction in supply.  If the EU takes action now, it is hoped to reduce the risk as well as the cost to Europe of a complete supply disruption and to strengthen European energy resilience.

To help Member States achieve the necessary reduction targets, the Commission has also adopted a European Gas Demand Reduction Plan, which sets out measures, principles and criteria for coordinated demand reduction. The plan is focused on the substitution of gas by other forms of energy and on energy savings in all sectors.

The aim is to secure supply to households and systemically important users such as hospitals, but also to sectors producing products and providing services that are key to the EU economy, supply chains and competitiveness. The plan also provides guidance on the key considerations Member States should make when planning cuts.

Austrian Federal Economic Chamber calls for immediate implementation

Harald ahrer, President of the Austrian Federal Economic Chamber (WKÖ), is convinced of the new EU gas emergency plan and calls for a quick implementation on the part of the Austrian Federal Government: "Fortunately, the EU Commission proposes realistic possible solutions to be prepared for the winter. The Federal Government must quickly implement the Commission's requirements and recommendations so that we are also prepared for the worst case scenario. To achieve the proposed gas reduction targets, a fuel switch must be enabled quickly in as many areas as possible."

The biggest obstacle to a fuel switch, however, would be the current emission limits. "To enable and incentivise a fuel switch, regulatory adjustments must be made to the emission limits.

In addition, the Ministry of Energy must now issue the necessary subsidy guidelines as quickly as possible in order to support companies in their investments via the Gas Diversification Act. Any further delay will cost the companies and thus the location dearly," adds WKÖ Secretary General Karlheinz Kopf.

The EU plan presented also contains criteria for ranking demand in the event of a bottleneck. In addition to the factors "critical for society", "part of cross-border supply chains" and "possibility of substituting gas consumption", possible damage to plants due to a shutdown as well as economic aspects are to be taken into account.

"It is now important that the federal government concretises and adapts its emergency plan accordingly. At the same time, however, we must also discuss the question of whether really only households should be protected customers with secure gas supplies. What good is it if I can heat my home but many other essential goods are not available without production," said the WKÖ leader.

"The current crisis cannot be solved by limiting energy consumption alone. We urgently need to ensure the diversification of our energy supply. This means establishing energy partnerships with different countries. Here, Austria is still lagging behind in a European comparison," said Mahrer.

EC European Commission

WKO Austrian Federal Chamber of Commerce