France pushing to strengthen EU’s energy independence as gas prices soar

LUXEMBOURG — France is pushing the EU to reduce its energy dependency on foreign countries as gas prices soar across the continent.

The EU has been grappling with higher energy costs in recent weeks, prompting governments in Spain, Italy, Greece, and France to take drastic actions to soften the impact on consumers.

The front-month gas price at the Dutch TTF hub, a European benchmark, has risen almost 400% since the start of the year. Energy experts foresee further gas price spikes as the winter season approaches.

Euro zone finance ministers on Monday discussed the issue together for the first time at a meeting in Luxembourg.

“We don’t want to be dependent on the supplies coming from foreign [countries],” French Finance Minister Bruno Le Maire told reporters on Monday.

The EU receives most of its natural gas supplies from Russia. In 2020, Moscow accounted for 43.4% of the EU’s natural gas stock, followed by Norway at 20%.

Russia is likely to provide further natural gas to the bloc after Gazprom recently completed construction on the Nord Stream 2 pipeline, a politically charged project designed to deliver more gas to the EU via Germany. Russia’s state-owned energy giant started filling the pipeline with gas for tests on Monday. Gazprom is awaiting approval from German regulators to open the taps.

“It is crucial to diversify energy supply and reduce European dependency on gas-exporting countries as fast as possible,” Le Maire said in a letter last week.

When asked if the EU was too reliant on gas from Russia, Europe’s Economy Commissioner Paolo Gentiloni said this issue would be raised in discussions “for sure.”

He also said the debate among euro zone finance ministers would include: “How can we address [and] strengthen our independence, address costs of procurement [and] different ways of storage.”

Some national EU governments, namely Spain, have asked for a European response to the spike in energy prices.

The European Commission, the executive arm of the EU, was due to put forward new ideas on how the bloc could tackle the issue together this week. This announcement has been postponed, however. 

“We will take a bit more time to work on it,” Dana Spinant, deputy chief spokesperson for the commission told reporters in Brussels, Belgium. “It is a very important matter,” she said.

 The French model

 According to Le Maire, the EU should follow the French way, where nuclear energy accounts for a large part of the market.

“Thanks to the French model we have more independence,” he said, “and this is key: to be independent.”

However, there is a big debate within the 27-member bloc about whether nuclear should be considered a clean source of energy. At the same time, there is a concern that higher energy prices will derail Europe’s green ambitions. This is because consumers are likely to pay higher energy bills going forward, which could impact their support for a rapid transition to climate neutrality.

“If anything, it only reinforces the plan to move away from fossil fuels,” Valdis Dombrovskis, Europe’s trade chief, said in Luxembourg. 

Gentiloni added that the EU needs to coordinate its actions in this area, but that measures cannot contradict its climate plans.

The EU is working to reduce greenhouse gas emissions by at least 55% by 2030 and to become climate neutral by 2050.

Source: https://www.cnbc.com/2021/10/04/france-pushing-to-strengthen-eus-energy-independence-as-gas-prices-soar.html

 

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