Brussels, 20 December 2022
Work advances on joint gas purchasing after legal proposal is agreed by Energy Ministers.
The European Commission convened today a high-level industrial roundtable to support the work of the EU Energy Platform in further advancing on joint gas purchasing which is due to kick off in 2023. Today’s meeting follows the adoption yesterday by EU Energy Ministers of the Commission’s proposed Regulation on enhancing solidarity through better coordination of gas purchases, exchanges of gas across borders and reliable price benchmarks. This Regulation provides the legal basis for aggregating EU gas demand, joint purchasing and more efficient use of infrastructure, including of EU LNG terminals.
The meeting was opened by President Ursula von der Leyen and chaired by Vice-President Maroš Šefčovič, and was attended by high-level representatives from 33 companies from EU Member States and Energy Community Contracting Parties. The meeting focused on the need for genuine engagement by the EU gas industry, both larger and smaller market operators, in the Platform. The objective of the Platform is to help coordinate gas purchases, while using the EU’s collective negotiating and political power, to secure supplies from reliable partners at sustainable prices for EU citizens and businesses. In January, the Commission will convene the first official meeting of the Steering Board, composed of EU Member States, to help coordinate both the process of demand aggregation and joint purchasing.
President von der Leyen said:
“We have made great steps forward this year in diversifying our gas supplies and replacing Russian fossil fuels. But we know that 2023 will be tougher, and we may face a potential shortfall of almost 30 billion cubic metres of natural gas next year. By making joint purchasing of gas a reality, we will use the EU’s economic and political weight to secure more supplies for our citizens and industry. Today’s meeting will kick start this process.”
Background
The EU Energy Platform was initiated in April 2022 in response to the need to diversify from Russian gas and support all EU Member States and Energy Community Contracting Parties in securing gas supplies for the winter 2023/2024. A dedicated task force has been created within the Commission to support the process. An Industry Advisory Group has been established and been meeting regularly to assist the Commission in providing the industrial dimension; five regional groups have been set up to identify the needs, opportunities for common use of infrastructure and potential new suppliers.
The Platform has also been key to our diversification efforts over the past months, facilitating the signature of Memoranda of Understanding with key gas exporting partner countries, and supporting international outreach to support our REPowerEU Plan. The proposed Regulation on joint gas purchasing was agreed by EU Energy Ministers on 19 December, at the Council meeting attended by Commissioner for Energy Kadri Simson.
Quote
We have made great steps forward this year in diversifying our gas supplies and replacing Russian fossil fuels. But we know that 2023 will be tougher, and we may face a potential shortfall of almost 30 billion cubic metres of natural gas next year. By making joint purchasing of gas a reality, we will use the EU’s economic and political weight to secure more supplies for our citizens and industry. Today’s meeting will kick start this process.
Our immediate priority is to take all necessary steps towards demand aggregation and joint tendering well before the gas storage filling season begins next year. There is political will and now, I invite our gas industry to play its important part. There is no time to lose, as any delay comes with a price tag.
Joint purchasing of gas: Press remarks by EU VP Šefčovič following the High-Level Industrial Roundtable
Brussels, 20 December 2022
Good afternoon!
It gives me a great pleasure to be here today to inform you that we are advancing our work on joint gas purchasing under the EU Energy Platform.
As you know, yesterday, Energy Ministers adopted the Regulation, providing us with the legal basis that we need.
And the Commission will lose no time in implementation.
That is why this morning, I held a first high-level industrial roundtable, with 32 companies around the virtual table. This marks the formal kick-off of our work, and we were honoured to have President von der Leyen with us to open the meeting today.
As the President said, our preparation for next winter starts today. We have achieved so much this year to reduce our use of Russian gas. The latest data also shows that we are on track to reach the target of gas demand reduction by 15 percent.
But we know that next year will bring new challenges. According to the International Energy Agency, we might face a potential shortfall of some 30 billion cubic metres of natural gas next year.
Today’s discussion with industry therefore focused on the need for its genuine engagement on the joint purchasing of gas, to make it a reality and help avoid the risk of shortage.
Our immediate priority is to take all necessary steps towards demand aggregation and joint tendering well before the gas storage filling season begins next year.
There is political will and now, I am glad to see the constructive approach of our gas industry to play its important part. There is no time to lose, as any delay comes with a price tag.
Joint purchasing should be as inclusive as possible, open to all Member States and Energy Community Contracting Parties, including countries with limited diversification options, and all companies that wish to participate regardless of their size.
Optimisation of infrastructure is another critical element of joint purchasing. We must remove existing bottlenecks and free capacity to ensure that LNG terminals and underground storages are ready to receive jointly procured gas. To that effect, we will launch a new booking system.
On the supply side, we will continue our energy dialogue with the US, Norway and other partners. We must more effectively coordinate the EU’s and Member States’ diplomatic outreach towards our key energy partners.
Because when we act jointly and speak with one voice, we can truly boost our bargaining power.
Finally, let me recall that healthy competition is the cornerstone of a well-functioning Single Market. I was pleased to have our Director General for Competition present in today’s meeting, alongside our Director General for Energy.
Jointly purchasing gas through a consortium can limit the risk of European companies outbidding each other in a way that harms our citizens and industry.
The Commission is ready to assist the industry in this process to ensure full compliance of the joint purchasing with the competition rules.
To take our work forward, I intend to convene the Steering Board, consisting of the EU Member States, in January. And our next steps will be as follows:
First, our aim is to select a service provider by January 2023 to organise the IT platform for demand aggregation.
Second, we will publish the aggregated demand and organise tenders to attract supply offers in early spring.
Third, we intend to conclude our first joint purchasing – including through long-term contracts – with gas suppliers well before next summer.
So, to conclude, today was an important first step in a first-of-its-kind operation of joint gas purchasing in Europe. With determination and cooperation, we can use this new tool to protect ourselves against gas shortages and high prices next winter.
Thank you.
Source – EU Commission