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EU countries approve the final Russian gas ban

The European Union gave its final approval to ban Russian gas imports until late 2027. This is nearly four years after Moscow invaded Ukraine in full force.

At a meeting held in Brussels, Monday, ministers of EU countries voted to approve the law. Slovakia and Hungary did not vote for it and Bulgaria abstained.

Hungary announced that it would be challenging the law before?the European Court of Justice.

The ban was intended to be approved with a broader majority, which would allow it to overcome the opposition of Hungary and Slovakia who are heavily dependent on Russian energy imports, and wish to maintain close relations with Moscow. According to the agreement, EU will stop importing Russian liquefied gas by 2026. Pipeline gas imports from Russia by September 30th 2027. This deadline can be pushed back to no later than November 1, 2027 if the country has a hard time filling its storage caverns.

Before 2022, Russia supplied over 40% of EU gas. According to the most recent data available from the EU, this share fell to 13% by 2025. Some EU countries still pay Moscow for gas pipelines, liquefied gas and oil, despite their attempts to restrict funding and support Russia's wartime economic.

LAW BANS NEW GAS DEALS

The Centre for Research on Energy and Clean Air, a non-profit, reported that the five largest EU importers spent 1.4 billion Euros ($1.66 billion), mainly on LNG and gas, on Russian energy last month. Hungary was the largest buyer, before France and Belgium. The EU imposed sanctions in 2022 on Russian oil shipped by sea, but did not propose sanctions for gas imports. This would have required unanimous approval of all 27 EU member states.

The EU law will prohibit companies from signing any new Russian gas contracts and require those with existing contracts to cancel them in order to comply.

Imports under short-term contracts signed before June 17, 2020 will be banned by April 25, 2026 for LNG and June 17, 2026 for pipeline gas. The final deadlines for the termination of long-term contracts must be met.

Failure to comply with the law could result in financial penalties up to 3% of global annual turnover.

In the next few months, the European Commission will also propose legislation to phase out Russian oil pipelines and to wean countries away from Russian nuclear fuel.

(source: Reuters)