The EU will gradually and effectively stop the import of Russian gas and oil by the end of 2027, whether delivered via pipeline or as liquefied natural gas (LNG) under a legislative proposal put forward by the European Commission on June 17 in Brussels. The plan, which follows the REPowerEU Roadmap, the Commission argues will end the EU’s exposure to market and economic security risks due to dependency on Russian fossil fuels, and will ultimately boost the Union’s energy independence and competitiveness, but Hungary and Slovakia claim it puts energy security in Central Europe at risk while raising utilities costs.
Under the envisaged gradual import ban, Russian gas imports under new contracts will be prohibited as of January 1, 2026. Imports under existing short-term contracts will be stopped by June 17, 2026, except those for pipeline gas delivered to land-locked countries and linked to long-term contracts which will be allowed until the end of 2027, according to the Commission. Imports under long-term contracts will be stopped by the end of 2027. Long-term contracts for LNG terminal services for customers from Russia or controlled by Russian undertakings will also be prohibited.
The number of loopholes and exceptions remains considerable, making it difficult to argue that this is in fact a “get tough” policy. But since EU Member States will always have significant input on matters that impact their energy security, this may be the best that can be achieved. Or is it possibly asking too much?
Asked how realistic a complete phase out of Russian energy is, Günther Oettinger, Former EU Energy Commissioner and Vice President told NE Global on the sidelines of an Energy Transition Summit in Athens on June 17, “I think it is time, yes. The proposal of the Commission is no imports from Russia directly or indirectly by 2027. Actually, we have 19 percent of our annual consumption coming from Russian sources: Turkish Stream or LNG (liquified natural gas) and I think it’s possible to reduce from 19 to zero in two-three years’ time. The question is what about Hungary and what about Slovakia because they are against such a proposal, how to come to a decision knowing that Budapest and Bratislava are not in favor of this proposal. But it’s time. If you want to be credible, no money for Russian energy.”
Asked about discussions to bring the Nord Stream pipelines back into operation, Oettinger said, smiling, “No, no, no. Some in the West, some in Germany are dreaming but forget it. If Germany doesn’t want to violate Poland and the Baltics completely, forget this use.”
European Commission President Ursula von der Leyen said in a statement on June 17, “Russia has repeatedly attempted to blackmail us by weaponizing its energy supplies. We have taken clear steps to turn off the tap and end the era of Russian fossil fuels in Europe for good.”
But at the Energy Transition Summit in Athens on June 18, Hungarian Foreign Minister Péter Szijjártó slammed the Commission’s REPowerEU plan to phase out Russian energy imports, claiming it is “killing Hungary.”
“It will cause serious dependencies on us instead of diversification. Why? Because there are currently two oil pipelines leading to Hungary out of which one will be phased out. So, instead of two pipelines leading to Hungary there will be one. This is everything but diversification. On gas, they will phase out the currently biggest entrance of gas supplies to Hungary, which means within one year there will be 26 billion cubic meters of incoming capacity of gas flows out,” the Hungarian minister said. Szijjártó also stressed that Russian suppliers have so far proven to be the most reliable energy partners for Hungary.
Szijjártó attended the almost totally unnoticed St. Petersburg International Economic Forum (SPIEF) in Russia where he said on June 19 that he agreed with Russian officials and energy company leaders to maintain their cooperation.
Szijjártó and his Slovak counterpart Juraj Blanár have spearheaded efforts to stop the REPowerEU plan.
But the Commission argues the phase-out of Russian fossil fuels will make an important contribution to the objectives of the Competitiveness Compass, the Clean Industrial Deal and the Affordable Energy Action Plan, which underlined how a cleaner and independent energy system helps boost the economy, while also supporting Europe’s decarbonisation ambitions.
Member States will be required to present diversification plans with precise measures and milestones for the gradual elimination of Russian gas and oil imports. The proposed Regulation will follow the co-decision legislative process, meaning that it will be for the European Parliament and Council to adopt it. Adoption in the Council will require a qualified majority, not unanimity.
Mark Alföldy-Boruss, Deputy State Secretary at Hungary’s Energy Ministry, told NE Global on the sidelines of the Baku Energy Forum in Azerbaijan earlier in June that his country receives Russian gas via the Turkish Stream gas pipeline and also is a transit country for Slovakia and Ukraine. “We have a contract with Gazprom until 2036. That’s more than ten years from now and so far, Gazprom has been a reliable partner and supplied all the energy needs that we had and under the conditions that are undersigned in this contract. Nevertheless, Hungary has the aim to have much more diversified import in hydrocarbons as well and to boost the domestic energy production,” he argued. “However, we can only do that step by step. The deadline that was announced by the European Commission as of 2027 is too early and we have a contract still with our Russian partners,” he added.
During the Baku Energy Forum on June 3, Hungary’s MOL Group and Azerbaijan state oil and gas giant SOCAR signed key terms for an exploration, development, and production sharing agreement for a new onshore area covering the Shamakhi-Gobustan regions of Azerbaijan.
In terms of further diversification, the Deputy State Secretary at Hungary’s Energy Ministry said, “The Vertical Corridor would be a very good option for us” but the fees are still a big question mark.
Hungary eyes Azerbaijan’s green energy potential
“We need more renewable and more stability in renewables. We are expanding the wind potential of Hungary reaching 1 GW by 2030,” Alföldy-Boruss said in Baku. Hungary has also already installed almost 8 GW of solar power capacity, sufficient to meet domestic demand during sunny days.
Alföldy-Boruss added that Hungary is interested in the Caspian-Black Sea-Europe Green Energy Corridor project and is actively pursuing access to Azerbaijan’s green energy resources. “If the Green Energy Corridor will produce green electricity from Azerbaijan using wind energy and also photovoltaics will be finalized somehow around 2033 then most probably they will be able to supply even a much broader load that the domestically available energy sources because of the time-differentiation and also because of the Caspian wind potential. So that is really interesting to us how to make that available however we are still waiting the final assessment of the feasibility study,” he said.
