Monday

16th Jan 2017

EU to help Ukraine cut Russia gas dependence

  • EU energy commissioner Sefcovic in Kiev on Friday (Photo: ec.europa.eu)

The EU aims to help Ukraine become independent of Russian energy supplies in the next “three to four years”, Ukraine's prime minister and an EU commissioner have said.

Volodymyr Grossman, the prime minister, spoke of the plan in Kiev on Friday (2 September), while hosting the European Commission’s energy chief, Maros Sefcovic.

Dear EUobserver reader

Subscribe now for unrestricted access to EUobserver.

Sign up for 30 days' free trial, no obligation. Full subscription only 15 € / month or 150 € / year.

  1. Unlimited access on desktop and mobile
  2. All premium articles, analysis, commentary and investigations
  3. EUobserver archives

EUobserver is the only independent news media covering EU affairs in Brussels and all 28 member states.

♡ We value your support.

If you already have an account click here to login.

  • Ukrainian gas supplier Naftogaz is notoriously corrupt and inefficient (Photo: naftogaz.com)

He said Ukraine aims to “consume less energy and produce more energy” so that it can go from being “an energy importer to an energy exporter”, ensuring “energy independence” in “three or four years’ time”.

Among the reforms, it aims to split up its notoriously corrupt national gas distributor, Naftogaz, impose market prices for gas consumers, create an independent energy regulator, and create a new “energy efficiency fund”.

Sefcovic said that Brussels and Kiev are “very close” to finalising a new memorandum on EU support for the initiatives.

He said that if Ukraine created the efficiency fund, it would allow the EU to pay out a further €600 million in macro-financial assistance.

He also pledged to get the European Investment Bank, the World Bank, and the International Monetary Fund to get behind the energy reforms.

“Would Ukraine manage to increase its energy efficiency levels to the EU average level, the savings achieved would be greater than the energy consumption of Spain over a whole year. Ukraine could thus even become an exporter of energy”, the EU commissioner said.

He added that part of the joint strategy would be to make sure Ukraine's poorest private households get relief from price hikes.

Ukraine currently imports just 18 percent of its natural gas directly from Russia, compared to 34 percent in 2014. The drop is due, in large part, to reverse-flow purchases from Hungary, Poland, and Slovakia.

But its real dependence on Russia is higher, given that 90 percent of Slovak gas and some 45 percent of Hungarian and Polish gas originates in Russia.

The dependence helps the Kremlin to exert political pressure on Kiev with cut-offs or threats of cut-offs in a situation set to get worse if Russia builds new pipelines under the Baltic Sea or Black Sea bypassing Ukraine, as well as its reverse-flow suppliers.

The Russian timeline for the projects to be up and running is 2020 - the same as Grossman's "three to four years".

With winter - the usual setting for Russian cut-offs - around the corner, Sefcovic added in Kiev that the EU commission is willing to mediate, as in the past, to keep the gas flowing to Ukraine and via Ukraine to Europe.

“The trilateral format [EU, Ukraine, and Russia] remains the most suitable for discussing gas supplies for the upcoming winter heating season. In this sense, I am also looking forward to meet with Russian authorities in the next weeks”, he said.

EU to tackle 'energy poverty'

The Commission wants to focus on "vulnerable consumers" but concedes that there will be differences in needs across the bloc.

Stakeholders' Highlights

  1. UNICEFNumber of Unaccompanied Children Arriving by sea to Italy Doubles in 2016
  2. Nordic Council of Ministers"Nordic Matters" Help Forge Closer Bonds Between the UK and the Nordic Region
  3. Computers, Privacy & Data ProtectionThe age of Intelligent Machines: join the Conference on 25-27 January 2017
  4. Martens CentreNo Better way to Lift Your Monday Blues Than to Gloss Over our Political Cartoons
  5. Dialogue PlatformThe Gulen Movement: An Islamic Response to Terror as a Global Challenge
  6. European Free AllianceMinority Rights and Autonomy are a European Normality
  7. Swedish EnterprisesHow to Create EU Competitiveness Post-Brexit? Seminar on January 24th
  8. European Jewish CongressSchulz to be Awarded the European Medal for Tolerance for his Stand Against Populism
  9. Nordic Council of Ministers"Adventures in Moominland" Kick Off Nordic Matters Festival in London
  10. PLATO15 Fully-Funded PhDs Across Europe on the Post-Crisis Legitimacy of the EU - Apply Now!
  11. Dialogue PlatformInterview: Fethullah Gulen Condemns Assassination of Russian Ambassador to Turkey
  12. Zero Waste EuropePublic Support Needed to Promote Zero Waste in More Municipalities