How dependent is Europe on Russian energy?

The European Union has launched a new plan to decouple Russian energy, although some EU member states oppose a total embargo on Russian crude
.
The Russian-Ukrainian conflict has tested the EU in key ways, not just the conflict itself, but also Europe's energy resilience
.

After the Russian-Ukrainian conflict, European countries tried to decouple from Russia's energy, and the specific road map gradually became clear
.

On May 18, local time, the European Union launched an investment plan totaling about 300 billion euros, aiming to reduce dependence on Russian fossil fuels in the next few years and accelerate the transition
to clean energy.

Get rid of dependence on Russia

At present, about 40% of the EU's energy imports come from Russia, about 40% of natural gas, 30% of oil and nearly 20% of coal
.

According to the EU's plan, between now and 2027, EU countries' dependence on Russian gas, oil and coal should be gradually reduced to zero, and the development of renewable energy and fuel efficiency should be accelerated to meet the EU's climate change targets
.

According to the European Union, according to estimates, the entire plan will need to invest 210 billion euros by 2027, and the investment will increase to about 300 billion euros
by 2030.

The funding involved in the programme will be mainly from the €750 billion recovery fund
previously set up by the EU to respond to the COVID-19 pandemic and its economic impact.
According to the plan, about 86 billion euros will be used for renewable energy, 27 billion euros for hydrogen infrastructure, 29 billion euros for power grids and 56 billion euros for energy conservation and heat pumps
.
For Central and Eastern European member states that are landlocked and highly dependent on Russian energy, the plan proposes to provide oil investment subsidies
of about 2 billion euros to each country.

According to the plan, European countries will soon negotiate gas supply agreements with producers in the United States, the Middle East and Africa to replace Russian supply
.
At the same time, the EU will expand renewable energy construction on a large scale by increasing project funding and streamlining regulatory measures that slow project construction
.

In addition, European Commission President von der Leyen proposed to raise the EU's 2030 energy efficiency target from 9% to 13%, and the share of renewable energy from 40% to 45%.

No agreement was reached on the oil embargo

Since the Russian-Ukrainian conflict, the European Union has begun to push for harsh sanctions against
Russia.

The European Union began imposing its first sanctions on Russian energy in April, approving a coal ban on Russia, which will come into full force
in mid-August.

On May 4, the European Commission proposed a phased oil embargo on Russia, seeking to phase out Russian crude oil supplies within six months and phase out refined products
by the end of 2022.

Russia is the world's third-largest oil producer after the United States and Saudi Arabia, with Germany, Poland and the Netherlands being the largest European buyers
of Russian oil.

If approved, Europe would follow the United States and Britain, which have already imposed the ban, cutting off one of the largest sources of
income for the Russian economy.

However, some EU member states have said they oppose a total embargo, and under the principle of "unanimous adoption", the EU's oil embargo proposal has been slow to reach consensus
.

On May 16, the latest meeting of EU foreign ministers discussed sanctions proposals, and Hungary was the only country
to oppose the implementation of the oil embargo plan.

Since the proposal was issued in early May, EU officials have made a series of concessions
.
Greece and Cyprus feared that the industry would lose out to rivals, so the EU dropped its ban
on EU ships transporting Russian oil.

Europe's landlocked countries, which rely heavily on Russian oil, have also been given a buffer period
.
Hungary and Slovakia will be allowed to phase out oil imports from Russia through oil
pipelines by the end of 2024.
In addition, unless a new pipeline is completed ahead of schedule, the Czech Republic can impose an oil embargo by the end of June 2024
.

At present, both Slovakia and the Czech Republic have relaxed in signing the sanctions proposal, but Hungary's opposition is very firm
.
Hungarian Prime Minister Victor Orbán likened it to an atomic bomb attack on the country's economy
.

The EU is also working on internal good offices
.
EU foreign policy chief Josep Boler said on May 16 that the dialogue with Hungary was mostly technical
.
He did not provide a timetable
for reaching an agreement.
However, some EU member states still hope to make a breakthrough
in the coming days or weeks.

After the European Union dropped the embargo on Russian oil, U.
S.
Treasury officials said on May 17 that they planned to propose European countries to impose tariffs on Russian oil at the G7 financial conference as a faster alternative to the direct oil embargo
.

According to Bloomberg news on May 16, German government officials revealed that even if the European Union fails to impose a comprehensive oil embargo on Russia, Germany plans to stop importing Russian oil
before the end of this year.

Europe's energy resilience is being tested

The Russian-Ukrainian conflict has tested the EU in key ways, not just the conflict itself, but also Europe's energy resilience
, Boller said.

Russian President Vladimir Putin said on May 17 that European countries imposing sanctions on Russia under pressure from the United States will only cause damage to their own economies, and Europe's sanctions policy on Russian energy is "economic suicide"
.

Indeed, if separated from Russian energy, some European countries will experience energy shortages, especially in countries where
more than half of their energy depends on imports of Russian oil.

Almost all of Slovakia's crude imports come from Russia, mainly through the former Soviet-era Druzhba pipeline, a landlocked country that has struggled to access alternative oil supplies due to the lack of sea lanes
.
However, Slovakia has been granted immunity from
the embargo.

Hungary, which is also exempted, is also highly dependent on Russian energy, with more than 60 percent of its oil and 85 percent of its natural gas coming from Russia
.

Hungarian Prime Minister Viktor Orbán said on May 16 that Hungary would not block EU sanctions
against Russia as long as it did not pose a risk to Hungary's energy security.
On April 3, Orban, known as Putin's best EU ally, won Hungarian parliamentary elections for the fourth time as prime minister
.

Hungary's foreign minister said phasing out Russian oil with "complete modernization of Hungary's energy infrastructure" would cost between 15 billion and 18 billion euros
.
Hungary has also said it wants large compensation from the EU to offset its own loss
of Russian oil.

Other countries are not without a price
.
The Centre for Economic Analysis, which is part of the French government, estimates that halting Russian oil and gas imports, including natural gas, would cost France 0.
15 to 0.
3 percent
of its gross national income.
For Germany, which is quite dependent on Russian energy, the losses will be even greater, between
0.
3% and 3%.

Some countries accept billing in rubles

At present, Russia's natural gas has not been included in the sanctions program
.

EU officials said they would address gas imports at a later stage, largely due to Europe's greater
dependence on Russian gas.
For EU member states, cutting off Russian gas is much more
complicated than embargoing oil.

In 2021, the EU imported more than 40% of its total natural gas consumption from Russia, which is 10%
more than the import of Russian oil.

On March 8, the European Commission presented a plan called RE Power EU, which outlines a significant reduction in Russian gas imports
by the end of the year.

In the May 18 plan, other channels to replace Russian gas were also proposed
.

But European sanctions on Russian gas could have a significant impact on
the region's economy.

Siegfried Russwurm, president of BDI, Germany's largest industrial association, noted that "the consequences of cutting off Russian gas supplies would be catastrophic
.
" Many businesses affected by the interruption in natural gas supply will be forced to stop production, and some may collapse
.
”

In order to resist the impact of financial sanctions in Europe and the United States, Russia has decided to switch to the settlement
of rubles when supplying natural gas to "unfriendly" countries and regions such as EU member states from April this year.

On April 2, Lithuania said it would no longer import natural gas from Russia in April, becoming the first country in the European Union to voluntarily cut off Russia's
energy supply.

However, more countries have chosen to accept the "ruble settlement order"
in order to ensure energy supply.
Austria, Hungary, Slovakia and other countries have successively expressed their willingness to abide by Russia's conditions
.

On May 11, local time, Italian Prime Minister Mario Draghi said he was "very confident" that Russia would continue to supply natural gas and that paying Russian gas in rubles was a "gray area"
.
Draghi also revealed that German gas importers have paid for the costs
in rubles.

However, Poland and Bulgaria were "cut off" for refusing to comply with Russia's payment requirements
.

To avoid more such problems, Bloomberg reported on May 15, citing sources, that the European Union is drafting a plan for EU companies to use rubles to buy Russian gas while circumventing violations of EU sanctions
.
The new rules stipulate that EU companies can be considered to have fulfilled EU regulations as long as they use US dollars or euros to complete payments
.

The United States has announced a complete ban on Russian oil, gas and coal imports, and Britain plans to gradually stop using Russian oil
by the end of the year.
Imports from Russia account for 8% of UK oil demand and 3%
of US oil demand.

But the EU has a low energy self-sufficiency rate and has long been highly
dependent on Russian energy.
Energy accounted for a decline in the EU's total imports from Russia between 2011 and 2021, but the EU is still a long way from
reducing its dependence on Russian energy imports.