No agreement in place to share fuel with EU member states in the event of a supply crunch

No agreement in place to share fuel with EU member states in the event of a supply crunch

EU laws oblige member states to send gas to a neighbouring state whose households or essential services like hospitals face a severe shortage.

THE EU cinched a deal to cope with a gas supply crisis, but to make it work, member states need to establish bilateral pacts to share gas and, right now, most have no such agreement in place.

Only six such deals have been secured, leaving most of the EU’s 27 countries without firm terms on how and when they would share gas in a supply crunch, or the financial compensation they would give or get for doing so.

“[Bilateral deals] are really... the only thing that will hold at the end of the day if there is a real supply crisis,” Christian Egenhofer, associate senior research fellow at the Centre for European Policy Studies, said.

“They organise the legal stuff, the compensation, the financial but also the infrastructure constraints,” he said.

Fearing Russia may completely halt gas flows, EU countries agreed earlier this week to curb their gas use by 15% over winter, to fill storage and free up fuel to share around in a supply crisis. But it is up to individual countries to sort out how that sharing of fuel will happen in practice, and some countries, including Ireland, have opt-outs.

EU laws oblige member states to send gas to a neighbouring state whose households or essential services like hospitals face a severe shortage. To make that happen, governments arrange bilateral deals. However, just eight countries are covered by the six agreements so far — including between Germany and Austria, Estonia and Latvia, and Italy and Slovenia.

A handful of countries are negotiating new two-way agreements, government officials said. A German-Czech deal is due to be signed by winter, and Germany is working on further agreements with Poland and Italy, its economy ministry said.

But some countries heavily reliant on Russian gas — such as landlocked Hungary, which opposed this week’s deal — have none. Italy and France are the EU’s biggest gas users after economic powerhouse Germany.

Italy has just one bilateral deal on emergency gas sharing and France has none. A senior Italian official said the country was negotiating a deal with Greece on gas storage.

The French energy ministry said “at this stage” France did not have any bilateral agreements in place.

The solidarity deals aim to avoid a panicked response if a supply crisis did strike, and reduce the risk that countries would hoard fuel and refuse to help their neighbours.

Meanwhile, European continental wholesale gas prices, which influence Irish prices, eased by 4% on Friday, after steep gains earlier this week, but uncertainties around Russian flows to Europe kept prices near five-month highs.

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