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Opening remarks given yesterday by Executive Vice-President Timmermans, Commissioner Simson and Commissioner Breton at the press conference on the Save Gas for a Safe Winter package.

"Check against delivery"

Opening remarks by Executive Vice-President Timmermans

Thank you very much and good afternoon.

Testing times, as the President has just said, and we are faced with an energy security situation that is unprecedented. Indeed, it is a political creation by President Putin, as part of his efforts to weaken us and to divide us. In response to such a political action, political counteraction is necessary.

Russia sees gas as a political weapon. So, we need to have a European level political response. It is not easy to predict what Putin's next move will be. But that he will continue to try and divide us and to hurt us is clear. So what we need to do, in any case, is to prepare for even the possibility of full disruption of gas supplies. All scenarios should be taken into account, even that worst scenario.

And that's why in the heat of summer, we have to think about winter. We need to save gas now to keep our homes heated and industry running when winter comes. So when we say winter is coming, we just announce that the season is changing. We are not quoting Game of Thrones.

If we do nothing we will have shortfalls, and shortfalls will not just affect the countries where the shortfalls happen. They will affect every single Member State because they will have serious consequences on our economy, and nobody can escape that consequence. So the choice we have today is triggering solidarity now or waiting for an emergency that will force solidarity upon us, when the circumstances then will be much uglier and the response will have to be much more complicated.

If there would be a complete halt of Russian gas supplies, we will most likely fail to put enough gas into storage and next winter, the winter after next winter, the situation could be even more dire. So we cannot in good conscience allow the situation to spiral out of control because it will, as I said, also cause significant economic damage. But we can reduce potential GDP losses if we apply preventive reductions now instead of taking reactive measures later. If we do that we can say to European citizens: ‘you will not be in the cold and you will not be out of your job because Europe has shown solidarity'.

We believe the situation is urgent enough to invoke Article 122. We are calling on Member States to make voluntary cuts now. We also need the possibility for mandatory demand reduction if the situation gets worse. We would then then propose to the Council to take a decision to go into that direction.

We have opted to set a uniform target because it is the simplest, fastest, fairest and also most transparent way forward. Every Member State will need to take measures relative to their own average consumption. We will work together with industry to identify how to scale back and Thierry will certainly have a lot to say about that.

And let me just underline this: households and other protected consumers will remain protected. But they can also contribute by cutting the gas consumption. Many of the possible savings are no regret measures. Think about it: do we need to have the lights on and empty office buildings or shopfronts all night? Do we have to have air conditioning set at 20 degrees? It could be higher, couldn't it?

Of course it might reduce a bit of our comfort but it might also reduce a lot of our consumption. None of this will be easy. But if we act now, we have a choice about how we do it. We remain masters of our own destiny if we really do this, if we choose now to plan for manage cuts to develop contingency measures together with industry and give up a few comforts ourselves - every one of us - we avoid a full blown crisis next winter.

We must use all the tools we have: energy savings of course but also the other pillars of REPowerEU, and I urge the Council to work hard on translating our proposal into facts.

We need to keep diversifying our energy supplies. The EU Energy Platform can support joint purchasing and coordinate distribution of gas across the EU. And the rollout of renewable energy must continue to accelerate. As the IMF has recently studied, the cost of transition to renewables is lower than continuing with fossil fuel. Just imagine that, the cost is lower than continuing with fossil fuels. So transition is cheaper than staying where we are and this, I think, we should keep in mind.

If we can put this together, and I think we can and I think we need to do that. Then Putin's attempt to manipulate us will fail. Because he is not attacking individual countries. Sure, he will. His plan is to attack individual countries to weaken Europe as a whole. So Europe as a whole is under his attack.

A strong European response is the only response. Unilateral measures are not the way to go. They create severe distortions in the internal market, they are ineffective and they can put the energy security of the entire EU at risk. And we don't want to give that gift to Mr. Putin. We have to move forward in solidarity, standing together and using our strength as a Union.

Thank you

***

Opening remarks by Commissioner Simson

Thank you, President, thank you Frans.

You have outlined very clearly the situation we are facing and why we need to act, quickly, decisively and together. Let me add a few more details.

The possibility of Russia cutting off the gas supply to Europe hangs over us every day. We committed in REPowerEU to end our dependence as soon as possible and reduce it by two thirds already this year - through diversification, renewables and energy efficiency.

But we acknowledged that even with these accelerated efforts, we would not get to zero in the matter of months.

We have carefully analysed, together with ENTSO-G, what a full disruption of gas this year would mean for our security of supply. The message is clear: if there is a full disruption, we will face a gap between gas supply and demand.

We estimate that this gap would be around 30 bcm in an average winter, 45 bcm in a colder one, and even larger if the winter is exceptionally cold. And we assume that non-Russian LNG and pipeline supply will remain high through the winter.

To address that remaining dependency on Russia we need to reduce gas demand. We must also preserve our ability to fill gas storage for this coming winter and the next one.

Member States have already made remarkable progress despite the challenging situation on the gas market, and the filling level today is very close to 65%.

But if the supplies from Russia are cut, reaching our 80% target by November will become very challenging.

And if our demand reduction target is not ambitious enough, we risk ending this winter with empty storage, which would be impossible to refill in time for the next heating season.

Taking all these factors into account, we are proposing a 15% reduction of gas consumption from the beginning of August to the end of March. This corresponds to 45 bcm of gas and will significantly reduce security of supply risks.

By acting together, in a coordinated and proactive way, it is us who decides our energy policy, not Putin. And by taking early action, we reduce the impact on the EU economies, protecting our people and businesses.

Delaying comes with a cost. It increases the negative impact on the GDP by at least a third. In our main scenario, this could mean a difference between a 0.6% and a 1.5% reduction of GDP.

To be prepared for this winter, we have put forward a legal proposal with a two-step approach.

In the first stage, we call on Member States to reduce gas demand by 15% on a voluntary basis, compared to their own consumption over an historical five-year average.

If the Member States are not making sufficient progress or the situation deteriorates, we propose that the Commission can declare a state of EU alert at any moment. This will trigger a mandatory obligation for the Member States to meet the 15% gas reduction target.

We are not telling the Member States which measures they need to take, as they are best placed to know what works for their energy system and economy.

But to help them to implement this ambitious goal, we have also outlined options for voluntary gas savings from fuel switch to interruptible contracts.

The aim of these measures is to avoid the need for forced curtailment of industry. However, if it does become necessary, we have set out guidance for Member States how to take these difficult decisions and Thierry will say more about that.

In the EU, households are protected customers, and there should be no risk of anyone being cut off heating, as the gas supply to homes is safeguarded.

But everyone can and should save gas. We will continue to promote the ideas set out in the EU Energy Savings Plan and ask all Member States to launch awareness campaigns to encourage gas-saving behaviour.

There is also considerable potential for the public sector to reduce demand, especially in heating and cooling.

Let me end by saying that today's package has a very clear and specific purpose: to reduce our gas demand. In parallel, intense work continues on the supply side.

In the first half of the year, LNG supplies to the EU increased by 21 bcm and pipeline deliveries by 14 bcm. In total, we have received an extra 35bcm of non-Russian gas this year. The target in the REPowerEU Plan was 60 bcm of additional supplies in 2022. 

The President and I just returned from Azerbaijan, where we agreed to more than double the gas volumes to the EU by 2027. And we expect to see an increase up to 4 bcm extra already this year.

We have also agreements in place with the US, Canada, Norway, Egypt and Israel, and work continues with Qatar and Algeria.

All the workstreams laid out in REPowerEU – diversification, joint gas purchases, ramping up renewables and hydrogen, increasing energy efficiency and tackling high prices – remain our absolute priorities.

This winter will be a test for the EU's energy system and for our Union as a whole. It is a test that we will pass if we act with unity, solidarity and resolve.

Thank you.

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