“A Temporary Gas Savings Subsidy as an Emergency Tool to Reduce Gas Consumption and Emissions”, Daniel Gros (RSCAS-EUI, Italy)

“A key problem for European policy makers today is how to reduce Europe’s dependency on gas imports from Russia. This problem has a seasonal component. During the summer months Europe could get by without Russian gas, but then it would not be possible to fill the available storage for the coming heating season”.

In this policy brief for the Robert Schuman Centre for Advanced Studies (European University Institute), Danial Gros, Board Member at CEPS and Research Fellow at the Robert Schuman Centre, investigates alternate strategies to combat the upcoming winter fuel shortage.

As a result of Russia’s war of aggression on Ukraine, the EU has joined with much of the international condemnation of Russia’s actions, including by imposing sanctions against Russia, including targeted restrictive measures (individual sanctions), economic sanctions and diplomatic measures. As such, and due to Europe’s heavy dependence on Russia oil and gas, fuel prices have been climbing in recent weeks. In the context of such a cost of living crisis, and of rising inflation, questions are being asked about the upcoming winter. Will Europeans be able to afford to heat their homes? Will especially dependent countries such as Germany be forced to plan for energy blackouts?

“All EU governments are desperately trying to find additional sources, mostly in the form of LNG. But this takes time because most LNG is committed under long-term contracts. Some reduction in gas use in Europe during the next winter is thus unavoidable. How could this be achieved while avoiding rationing?”

Read more here.