Fifteen per cent: what the gas demand reduction deal asks of each Member State

The Council reached a political agreement on 26 July on a Council Regulation on coordinated demand-reduction measures for gas[1]. The text asks every Member State to reduce its gas consumption by 15 per cent between 1 August 2022 and 31 March 2023, measured against its average consumption over the previous five years[1]. The Commission had tabled the proposal six days earlier, on 20 July, under the title "Save Gas for a Safe Winter"[2]. Formal adoption will follow by written procedure[1]. We examine what the deal contains, what the Council changed and what it asks of our generation.

What the Commission proposed and why

The Commission chose Article 122 of the Treaty on the Functioning of the European Union as the legal basis[2]. That Article allows the Council, on a proposal from the Commission, to decide "in a spirit of solidarity between Member States" on measures appropriate to the economic situation, in particular if severe difficulties arise in the supply of certain products, notably in the area of energy[9]. The Council acts by qualified majority and the European Parliament has no role.

The Commission says that twelve Member States already face a partial or total cut-off of Russian gas and that Russian flows are now less than one third of their level a year ago[3]. Russian gas accounted for about 40 per cent of the Union's imported gas before the war[10]. Storage sites stood at about 64 per cent on 20 July, against the legal obligation of 80 per cent by 1 November that Parliament and Council adopted in June[3][8]. The Commission estimates that a full cut-off during a cold winter, without preparation, could reduce the Union's GDP by up to 1.5 per cent, and by up to 1 per cent in an average winter[4]. A 15 per cent reduction equals about 45 billion cubic metres, which the Commission says would carry the Union through a winter without Russian gas[3][10].

Russia supplied the argument in real time. On 25 July Gazprom announced that flows through Nord Stream 1 would fall to about 20 per cent of capacity from 27 July, citing the maintenance schedule of a turbine at the Portovaya compressor station[5]. President von der Leyen said on 20 July: "Russia is blackmailing us"[3]. Each turbine story arrives when the Union is about to decide.

What the Council changed

The agreement keeps the 15 per cent figure and the voluntary stage. It changes who decides on the mandatory stage. The Commission wanted to declare a Union alert itself after consulting Member States[2]. The Council text provides instead that a Union alert is triggered by a Council implementing decision on a proposal from the Commission[1]. The Commission must propose such a decision if there is a substantial risk of a severe gas shortage or of exceptionally high demand, or if five or more Member States that have declared a national alert ask for it[1].

The Council also added exemptions and derogations. Member States that are not interconnected with the gas networks of other Member States are exempt from the mandatory reduction, as are Member States whose electricity grids are not synchronised with the European system and that depend heavily on gas for electricity[1]. A Member State with limited interconnection may ask for a lower obligation if it shows that its export capacity or its domestic LNG infrastructure already redirects gas to other Member States to the fullest extent[1]. A Member State may also seek a derogation if it has overshot its storage filling target, if it depends heavily on gas as a feedstock for critical industries, or if its gas consumption rose by at least 8 per cent in the past year against the five-year average[1].

These derogations answer identifiable objections. Spain's minister for the ecological transition, Teresa Ribera, said on 20 July that Spain did not support the Commission's proposal and that Spain had not lived beyond its means in energy terms[6]. She pointed to two decades of unanswered requests for interconnection and to Spain's role as the entry point for 30 per cent of the liquefied natural gas that reaches Europe[6]. Portugal's secretary of state for energy, João Galamba, called the measure "unsustainable" and "disproportionate" and cited the absence of links to the European network[12]. The Council accommodated these objections. Only Hungary voted against. Its foreign minister called the text "unjustifiable, useless, unenforceable and harmful"[7]. The Czech minister Jozef Síkela, who chaired the meeting, said that the adoption "in record time" had strengthened common energy security[11].

The result is a Regulation with a firm number and soft edges. A target with derogations for the peninsula, the islands and the Baltic grid will not deliver 45 billion cubic metres if the large consumers fall short. The Union alert, now in the Council's hands, will require a qualified majority at the moment of greatest pressure on national governments.

What this asks of our generation

Our generation did not build the dependence on Russian pipeline gas, and it will pay for the exit. The Council's list of measures includes fuel switching in industry, reduced gas use in electricity generation, limits on heating and cooling in public buildings, awareness campaigns and auctions between companies[1]. Households are protected customers and should not be cut[1]. The burden will fall first on industry and public budgets, then on the people who enter the labour market this autumn.

We recommend that each Member State publish, with its updated emergency plan in September, the volume in cubic metres that it expects to save under each measure, so that the 15 per cent target can be checked against a sum and not against a promise.

We recommend that the Commission publish every two months a single table of consumption against the five-year baseline for all 27 Member States, including those that invoke a derogation.

We recommend that Member States agree now on the criteria that would lead the Commission to propose a Union alert, so that the Council does not debate the trigger in the middle of a cold week in January.

We recommend that the Union treat the derogation for limited interconnection as a deadline for the interconnection itself.