Brussels is bracing for possible further cuts in Russian gas supplies, a scenario the head of the International Monetary Fund warned on Wednesday that economies could plunge into recession.
The European Commission’s plan, to be published on July 20, will propose countries to provide financial incentives to industries to reduce gas consumption, switch fuel in industry and power plants, and roll out information campaigns to encourage consumers. traces to use less heating and cooling.
Measures targeting the industry could include auctions or tenders to encourage large consumers to use less gas in return for compensation, according to the draft, which could change before publication.
By acting now, the EU wants to ensure that as much gas is stored as possible and build up a stock buffer for the winter, when gas demand for heating homes peaks.
Households are “protected customers” under EU law, meaning they would be the last to be affected by gas rationing.
Early concerted action at EU level at this critical juncture of stockpiling will reduce the need for a possible and more painful demand cut later in the winter in the event of a disruption in flows from Russia.
EU gas storage is currently 62% full, well short of the bloc’s goal of filling it to 80% capacity by November.
Before Moscow invaded Ukraine in February, the EU relied on Russia for 40% of its gas. That share has plummeted and flows from Russia are now below 30% of the 2016-2021 average, the draft said.
Moscow has cut or reduced gas supplies to 12 EU countries since the start of the war, some cutting off completely over a payment dispute and others affected by cutting flows through the Nord Stream 1 pipeline to Germany.
That pipeline is now offline until July 21 for annual maintenance, which governments, markets and businesses fear could be extended due to the war.