Saturday, March 2, 2024

Austria’s dependence on Russian fuel rises to 98%, two years after Ukraine conflict – Euractiv

Austria’s dependence on Russian fuel has elevated from 80% to 98% in two years, prompting the nation’s vitality minister to ring the alarm bell forward of a nationwide election resulting from happen within the Autumn.

When Russia attacked Ukraine on 24 February 2022, Austria was importing 80% of its pure fuel from the state firm Gazprom, a determine that has now risen to 98%.

The nation’s vitality minister, Leonore Gewessler, is urging fast motion to reverse this.

“The diversification of our fuel imports is progressing far too slowly. This culminates in a brand new file share of Russian pure fuel in December of 98%,” the Inexperienced minister advised the press in Vienna on Monday (12 February). 

The 98% determine is a large enhance in comparison with the 17% achieved in October 2022, when Russia itself restricted fuel flows to Europe. However the pattern was quickly reversed and the share of Russian fuel was already again at 43% in August final 12 months. 

The excessive share of Russian fuel is partly brought on by quickly falling fuel consumption in Austria – from 100 TWh all the way down to 75 TWh in 2023, in keeping with figures from the vitality ministry.

Another excuse is the contractual ties. Austrian utility OMV dedicated to a “take-or-pay” association with Gazprom for as much as 60 TWh a 12 months, practically sufficient to satisfy the nation’s complete fuel demand. These provides, contracted in 2018 till 2040, come at a probable cheaper value than neighbouring Germany, which should depend on world markets to safe liquefied pure fuel (LNG) shipments.

“Gazprom delivers, OMV has to virtually take it,” stated Christoph Dolna-Gruber, an professional on the nation’s vitality company.

And native vitality utilities in Austria, most of that are part-owned by municipalities or cities, are all too comfortable to snap it up.

Alternate options can be found, however they are typically costlier. “There may be sufficient non-Russian pure fuel however the vitality firms should not shopping for it,” stated Gewessler. 

In the meantime, imports from international locations aside from Russia are often costlier. 

“Imports by way of Germany are topic to a fuel storage levy of €1.86/MWh. Italy can also be planning to levy a cost of €2.19/MWh for fuel exports from 1 April 2024,” stated Dolna-Gruber. 

Financing Russia’s conflict effort

When EU envoy to Austria, Martin Selmayr, stated in late 2023 that Austria’s continued excessive ranges of fuel imports have been tantamount to sending “blood cash” to Russia, he was firmly reprimanded. 

However Gewessler had no qualms about stating that apparent reality.

“With our vitality payments, we’re not directly financing a heinous conflict in Ukraine,” she advised the press.

In 2022, Austria imported fuel to the tune of some €7 billion. In 2023, on condition that costs fell, that quantity is predicted to return in at round €3 billion. 

Gewessler’s three-step plan

By 2028, the EU hopes to remove Russian fuel fully. A 2023 assessment by Brussels discovered that Vienna had but to even start planning for that. 

Gewessler has three key actions in thoughts to sort out this.

First, native utilities should show they’ll cope with out Russian fuel – much like the Basel system for banks – and start growing their share of non-Russian fuel. Ideally by way of the EU’s joint buying platform, AggregateEU.

Second, she desires to de-facto break the long-term contract with Gazprom that obliges Austria to taking the fuel it doesn’t matter what.

That is more likely to face resistance from Austrian conservatives. Chancellor Karl Nehammer, a centre-right politician, stated in 2023 that persevering with the contracts was within the curiosity of taxpayers. “It’s a matter of securing state property and retaining present contracts so long as attainable,” Nehammer defined then, referring to the governments 31.5% stake in OMV.

Third, the Inexperienced’s vitality minister desires to embed pure fuel – and independence from Russia – within the assessment of the nation’s nationwide safety technique. 

Shaken by Russia’s assault on Ukraine, the militarily impartial Austria has struggled to rethink its safety structure and swiftly signed as much as the German sky defend initiative in response.

Resulting from Austria’s political peculiarities, Gewessler’s plans would require a two-thirds majority in Parliament, which imply the ruling centre-right and Greens coalition would depend upon help from the centre-left. 

“We due to this fact name on all these concerned to take additional steps within the pursuits of Austrian independence,” the vitality ministry wrote in a paper shared with the press.

These debates are happening as Austria prepares to carry a nationwide election in Autumn 2024 and with European elections scheduled in June.

[Edited by Zoran Radosavljevic and Frédéric Simon]

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