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Weapons of Mass Destruction (WMD)

European Commission

Opening remarks of Commissioner Simson at the press conference of the Extraordinary Energy Council of 2 May 2022

European Commission

2 May 2022

"Check against delivery"

Thank you very much, Barbara, and thank you also for convening this extraordinary Council meeting at this crucial moment.

The decision by Gazprom to suspend the gas supplies to Poland and Bulgaria marks another turning point in the current crisis. It is an unjustified breach of existing contracts and a warning that any Member State could be next.

It is also an attempt to divide the EU, to which we must respond by reinforcing our unity and solidarity.

The Commission has provided guidance to the Member States on the issue of payment in rubles. We made clear that this is a unilateral change to contracts, unjustified by commercial reasons, and it is perfectly legitimate under commercial law to reject it. We have explained that payments in rubles lead to a clear breach of sanctions, as they provide assets for the operations of the Central Bank.

Nevertheless, many European energy companies are due to make their next payment to Gazprom in mid-May and are trying to understand better what they should do.

We need to give them the clarity that paying in rubles through the conversion mechanism managed by the Russian public authorities and a second dedicated account in Gazprombank is a violation of the sanctions and cannot be accepted.

The Member States and the companies should not have any illusions that they can rely on the good faith of Gazprom and the Russian regime in this matter.

The Council today underlined the importance of unity and coherence of our response.

I have promised the ministers that my services, together with the Legal Services of both the Commission and the Council will prepare a more detailed guidance on what the companies can and cannot do within our sanctions' framework.

At this stage, there is no immediate risk for Europe's security of supply. For now, deliveries to Poland and Bulgaria continue via alternative routes from Greece and Germany. I thanked earlier today everyone involved for their help and solidarity.

Yesterday, the gas interconnector between Lithuania and Poland, a TEN-E project of common interest, begun operations. This could not be more timely. Other projects nearing completion, such as the Baltic pipe in October, and the interconnector between Greece and Bulgaria, will also play a crucial role.

While the flows via Ukraine and Yamal routes to the EU have fallen, they represent today only a limited portion of gas imports to the Union. All the alternative routes are at their maximum capacity and LNG reached last week record high levels of 0.4 bcm per day. The level of storage in Europe is over 32% and increasing in all countries.

That said, our priority must now be preparedness for any disruption of the flows. I have indicated to Ministers that in my view we must focus on three areas:

First, we need to upgrade the gas supply contingency plans. All Member states have preparedness measures in place, but they need to fully reflect the recent developments and security of supply risks.

We have to look at the European level coordination of the demand curtailment measures in the plans, as well as the optimal use of gas networks and energy infrastructure.

It is also urgent to conclude bilateral solidarity agreements. Let me therefore welcome the new bilateral solidarity arrangement reached last week between Estonia and Finland. There are still too few of them and I urge Member States to speed up work for the remaining bilateral agreements.

The second priority is to ensure the refilling of European gas storage by the next heating season.

To make this happen, it is important to swiftly adopt the proposal on storage and to ensure that the final outcome guarantees storage levels of 80% this year and 90% after that.

Work is progressing rapidly and trilogues are scheduled for the 16th of May. I am very grateful for the work done by the Presidency, for seeking a reasonable compromise and taking into account the specific situations of the Member States.

Finally, we must urgently continue the work to diversify supplies through the EU Energy Platform.

The first meeting of the Platform took place already on 7 April and the first regional meetings on 12-13 April. The platform can help Member States address the current challenges on the gas market. For instance, last week, the Commission and Bulgaria agreed to set up the first regional task force to deal with security of supply issues after Gazprom's breach of the supply contract. The first high-level meeting of the task force will take place already this Thursday in Sofia, where we have also invited our partners from the Western Balkans.

In fact, the EU Energy Platform will be open to the EU's Eastern associated partners and the Western Balkans.

We have also made progress in implementing the Joint Statement by Presidents Biden and von der Leyen from 25 March. On 28 April, the EU-US Task Force on Energy Security met in Washington and will continue work on the senior officials' level.

In this context, it is imperative that we take forward our work to become independent from Russian fossil fuels. Accelerating the European Green Deal is essential to achieving this objective because we cannot simply replace 155bcm of Russian gas with fossil gas from other suppliers. It is neither sustainable nor affordable.

We need to speed up the deployment of renewable energy, including green hydrogen, and to increase energy efficiency and savings.

We will cover all these elements in the Commission REPowerEU Plan which we will present ahead of the May European Council, with concrete measures to achieve the phase-out of Russian fossil fuels.

In the same package, the Commission will present its assessment of how to improve the current electricity market system, following the ACER Report published last Friday.

Finally, I have updated the Ministers on the progress in supporting Ukraine, which remains our key priority.

We are entering in a very difficult phase of the Ukraine's war and for Europe's energy markets. As President von der Leyen has said, work on sanctions that include the energy sector is ongoing. Now more than ever, we need to remain united in our approach and coordinated in our response.

I believe that today's Council has helped us consolidate this unity and coordination and I thank again Barbara Pompili for making this possible.

Thank you.

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