EU plans proposal to phase out Russian fossil fuels by 2027: von der Leyen

The EU plans to propose phasing out Russian fossil fuels by 2027, according to European Commission President Ursula von der Leyen, as part of measures to improve European energy security.

EU leaders have been meeting for an informal summit in Versailles to decide on actions to take in light of Russia's invasion of Ukraine.

Von der Leyen said in a post on Twitter late-March 10 the EU was "too dependent on Russian fossil fuels and in particular, gas."

In a slide posted to the account, it was stated that there would be a proposal set out by mid-May on phasing out the EU's dependency on Russian fossil fuels by 2027.

In its earlier REPowerEU plan presented March 8, the EC had said only that it planned to make Europe independent from Russian fossil fuels "well before 2030," starting with gas.

European Council President Charles Michel, speaking ahead of the Versailles summit March 10, said: "We propose to decide to phase out from the Russian gas. It is very important to give a strong signal of the EU's determination to act."

The EU target of 2027 comes amid growing calls for Brussels to consider a full embargo on Russian oil, gas and coal imports.

The US has already said it would ban all Russian energy imports while the UK is set to phase out Russian oil imports by the end of the year and reduce Russian gas supplies.

Gas storage

Under the EC's new proposals, Europe's storage sites will need to be filled to 90% of capacity by Oct. 1 each year. The EC also said it would allow state aid to help procure gas for filling storage stocks.

According to the slide, a taskforce to design a storage refilling plan will be set up, and proposals for an EU gas storage policy will be made by the end of March.

Low stock levels across Europe and the need to refill them over the coming summer has contributed to record-high gas prices.

Day-ahead gas on the benchmark Dutch TTF hub was priced at Eur212/MWh on March 7, an all-time high and 230% higher than the start of 2022, according to Platts price assessments by S&P Global Commodity Insights.

European storage sites were filled to just 77% of capacity last summer, and storage facilities were just 26% full as of March 8, according to data from Gas Infrastructure Europe.

The EC added that as part of its latest energy security proposals, it would look into "all possible options" for emergency measures, such as temporary price limits, to limit the contagion effect of gas prices on electricity prices.