What Strategies is the EU Considering to Phase out Russian Gas?

Date : 2025-07-01

Published in Energy

Highlights

The EU is considering moving away entirely from Russian gas imports by 2027. The European Commission plans to put forth a proposal in June this year to put an end to such transactions including banning spot contracts with Russia by the end of 2025.The EU is considering moving away entirely from Russian gas imports by 2027. The European Commission plans to put forth a proposal in June this year to put an end to such transactions including banning spot contracts with Russia by the end of 2025.

Sanctions: The first line of action

Imposing sanctions remains the most straightforward legal method for the EU to ban imports of Russian gas and liquefied natural gas. However, this approach requires unanimous consent from all member states (currently 27).

Hungary and Slovakia both of which seek to maintain strong political ties with Russia have pledged to oppose such sanctions. The two countries currently receive Russian gas via the TurkStream pipeline and argue that switching to alternative sources would drive up energy costs.

To circumvent the need for unanimous approval, the European Commission will, in June, propose alternative measures that can be passed by a reinforced majority. These measures would only be blocked if at least four members oppose them.

While most EU diplomats have expressed support for the proposed ban at a closed-door meeting, several representatives have voiced concerns about its legal implications and its potential impact on energy prices.

What other measures are on the table?

The European Commission is also considering the imposition of tariffs on Russian gas and liquefied natural gas (LNG) imports. While this would not constitute a direct ban, the goal would be to render new Russian gas agreements economically unviable.

The tariffs could shield European companies with long-term contracts for Russian gas from legal action due to significant changes in regulatory conditions. This could also provide grounds to invoke "force majeure" and exit those agreements.

However, legal experts caution that companies taking this route may risk facing fines.

Legal enforcement: A potential roadblock

The EU may leverage the "Union Database," to identify any Russian gas-related transactions. The database currently tracks imports of biofuels within the EU.

This tool could be used to identify companies involved in such trades, and enable authorities to take legal action against suppliers or traders who violate the ban.

The measures will be supplemented with reporting requirements under which companies will need to disclose details of Russian gas trades.

What are the long-term consequences?

Russia accounted for nearly one-fifth of the EU's gas imports in 2024 primarily through LNG and the TurkStream pipeline. The current supply is a considerable drop from the nearly double volume (45%) that Russia funneled before its invasion of Ukraine in 2022. Russia's share is expected to decrease further, falling to 13% this year, as deliveries via Ukrainian pipelines are set to stop by the end of 2024.

The EU intends to phase out nearly all of this volume of imports in the next two years. Approximately two-thirds of Europe's Russian gas imports are secured through long-term contracts while the remaining are based on spot market trades. Most EU countries that once relied on Russian pipeline gas have switched to alternative sources. However, some Russian LNG is tied to long- term contracts that could extend as far as 2041, unless interrupted. Companies holding these contracts include TotalEnergies, SEFE, and Naturgy.