Hungary tests European solidarity by banning gas exports

Hungary tests European solidarity by banning gas exports

Hungary declared itself on Wednesday (July 13) in “energy emergency”announcing that it would stop gas exports to neighboring countries to ensure its own supply as Russia threatens to cut off the tap.

“The time has come for the government to declare a state of energy emergency”said Gergely Gulyas, chief of staff to Hungarian Prime Minister Viktor Orbán, in an announcement on Wednesday (July 13).

From August, exports of fossil fuels to neighboring countries will be banned and measures will be taken to increase national gas production by 33%, from 1.5 billion cubic meters (bcm) to 2 mmc.

Gas covers 85% of Hungary’s heating needs, and most of this gas is supplied by the Russian giant Gazprom.

In Europe, the security of gas supply is governed by a regulation adopted in 2017 after a dispute between Moscow and kyiv over the costs of transiting Russian gas through Ukraine which led to supply cuts in the middle of winter.

This European regulation gives priority to vulnerable consumers, households and small businesses and makes solidarity between European states compulsory.

However, when confronted with a major crisis, Member States revert to their national reflexes, as illustrated by the Hungarian decision. This is in direct conflict with the European regulation, which stipulates that gas solidarity between countries must be based on solidarity agreements governing coordination between national authorities.

“EU Member States are required to put in place the necessary technical, legal and financial provisions to make solidarity gas distribution possible in practice”says the European Commission, which is responsible for enforcing the rules within the Union and its 27 member states.

However, few states have actually signed solidarity agreements among themselves.

Germany has agreements with Denmark and Austria, and is politically committed to signing one with the Czech Republic, while Estonia and Lithuania have agreements with Latvia. Finland meanwhile signed an agreement with Estonia in April, and Slovenia and Italy signed one the same month.

So far, no EU member state has signed a bilateral agreement with Hungary, although Budapest co-signed a first solidarity treaty on electricity between several countries in June.

Georg Zachmann, energy expert in the Bruegel think tank, questioned the relevance of the Hungarian approach. “I am not sure this decision is wise for a landlocked country that has less than 3 billion cubic meters in storage and consumes 10 billion cubic meters of gas per year”he warned on Twitter.

Hungary receives Russian gas via the TurkStream gas pipeline, which connects Turkey to Bulgaria, then to Serbia and Hungary. While Moscow has stopped delivering gas to Sofia, the latter continues to transit gas to Serbia and Hungary.

Germany wants to change EU rules on energy solidarity

Hungary’s announcement comes after German Vice-Chancellor Robert Habeck openly expressed reservations about EU energy solidarity rules, which prioritize deliveries to consumers over industry.

In a speech in Vienna on Tuesday (July 12), Mr Habeck said households should also “contribute their share” if gas rationing became necessary. “A permanent or long-term interruption of industrial production would have significant consequences”he warned.

According to the European regulation on the security of gas supply, households, schools, hospitals and district heating networks would be the last to suffer from possible rationing in the event of a crisis, a rule long contested by the German industry which feels aggrieved.

“The European gas regulation [en situation] emergency provides that critical infrastructure and consumers are protected and that industry and commerce are not”noted Mr. Habeck, openly questioning these rules.

Comments immediately applauded by German industrialists.

” The Minister [M. Habeck] rightly wonders whether the status of ‘protected customer’ is still correctly defined in a gas crisis of unprecedented size and duration”said Karl Hauesgen, president of the VDMA, the German federation of mechanical engineering and engineering.

However, Mr. Habeck’s statements were quickly denied by his ministry, which wanted to clarify his remarks.

“Of course, the Security of Supply Regulation defines the protected customers – namely kindergartens, hospitals and private consumers – who will continue to be supplied and will not suffer any cuts even in the event of a gas shortage. »explained a spokesperson for the Ministry of the Economy and Climate Action.

“It is not a question of saying that these consumers are no longer supplied, but rather of knowing how they can contribute”continued the spokesperson.

But the debate is now open, and the Berlin political sphere is now openly discussing the changes to be made to the European regulation on the security of gas supply.

“The current legal framework, with its ‘protected customers’, is designed for short-term local outages, not for a significant long-term gas shortage”commented Lion Hirth, professor of electricity markets at the Hertie School from Berlin.

“It makes little sense to pretend it’s set in stone”he added in a comment on Twitter.

Ingrid Nestle, spokeswoman for the German Green Energy Party, was more direct. In an interview with the public broadcaster LOL Wednesday, July 6, she stressed the need to “to ensure that, if a country manages to use less gas, to actually save it, to develop other sources of energy, that country also has the possibility […] to save its industry in winter”.

Taking a fictional example, Ms Nestle said gas should not be exported to protected customers overseas who waste energy during a shortage.

[Edité par Frédéric Simon]


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