Brussels gas directives bring some relief to German industry
The European Commission has released its guidelines on how to distribute fossil gas in times of scarcity, giving EU member states significant leeway — making German industry a bit more optimistic.
The European executive presented on Wednesday (July 20) its plan to save gas in anticipation of next winter. In the event of a major gas shortage, EU rules will protect households, hospitals, schools and large gas-fired power stations from cuts. But European industry has lobbied hard to relax the strict rule, backed by politicians in Berlin.
Citing the EU executive’s plan to cut gas demand by 15% across the EU and ease restrictions on industry switching to more polluting fuels, “the objective of these measures is to avoid the need for a forced reduction [des activités] Of the industry “said EU Energy Commissioner Kadri Simson.
Thus, the regulation proposed by the Commission links solidarity to strict demand reduction measures. “When they ask for a measure of solidarity […] Member States must have implemented all appropriate gas demand reduction measures”reads the recitals of the regulation.
If the demand for gas is sufficiently reduced, the industry can produce throughout the winter without fear of a production stoppage.
“Let me stress this: households and other protected consumers will always be protected. But they can also help by reducing their gas consumption.”explained Frans Timmermans, Vice-President of the Commission and responsible for the European Green Deal (Green Deal).
If the worst should happen — a winter when there is not enough gas — Brussels has provided guidance for “to help Member States identify and prioritize, within their ‘unprotected’ consumer groups, the most critical customers or installations, primarily in industry, so that these groups are restricted last place before protected customers”.
The guidance provided includes five key criteria: importance to society, cross-border supply chains, damage to installations, possibilities for substitution and reduction, and economic considerations of a given Member State.
The whole plan has been hailed by Berlin, whose industry is most dependent on gas. It will be considered at an emergency meeting of ministers on July 26.
“We expressly welcome the European Commission’s proposal”, said German Vice-Chancellor Robert Habeck. The latter had previously openly questioned whether EU rules needed to be changed to protect the industry.
Stressing the importance of solidarity, he added that “if the gas supply of one or more Member States encounters difficulties, this has repercussions for all EU Member States”.
German industry has long argued that if it were to be cut off from gas, the negative impacts would be felt in the various supply chains across the bloc.
“In many member states there is the impression that the plan is intended to help only Germany”, explains the German daily Welt, which quotes a European source. Sources in Warsaw believe the plan was designed to save German industry, the daily adds.
Either way, the industry has seized on this glimmer of hope. “European metal producers are already preparing for a winter that will be decisive for their survival”, explains Guy Thiran, managing director of the Eurométaux metals association.
“Our materials are used in Europe’s critical value chains and provide the clean energy technologies needed to transition away from Russian fossil fuels”he continued, wasting no time in using the Commission’s criteria.
The criteria proposed by the Commission have caused disagreements over who will have priority over gas.
Jori Ringman, managing director of Cepi, an association of paper producers, called for “prioritizing the pulp and paper industry”. Citing the lack of data, “we advocate equal sourcing for all consumers in the industry”said Thilo Brodtmann, managing director of the German machine manufacturers association VDMA.
It remains to be seen who will come out on top in this case. For now, industry bosses can breathe, as the new European gas savings plan appears to favor them more than previous measures.
Moreover, the first signs indicate that Russia is ready to start sending gas again via Nord Stream 1, after a maintenance operation which will have lasted ten days.
“There are approximately 800 GWh of gas for 21.07.2022 originally nominated on German Nord Stream 1 entries »said Klaus Müller, director of the Federal Network Agency, on Twitter.
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