UK to phase out import of Russian oil by end of 2022
Britain will phase out Russian imports of oil and oil products by the end of 2022, business minister Kwasi Kwarteng has said.
The minister has called on businesses to use the transition period to ensure a smooth transition.
“This transition will give the market, businesses and supply chains more than enough time to replace Russian imports – which make up 8% of UK demand,” Kwarteng said on Twitter.
On Monday, Prime Minister Boris Johnson said his government would set out a new energy supply strategy as the Russian invasion of Ukraine and subsequent rally in energy prices accelerated the need for new energy sources and greater self-reliance.
Kwarteng said he was exploring options to end British imports of Russian gas which accounts for about 4% of supply in the country.
Separately, the United States, the world’s biggest oil consumer, announced a ban on Russian oil imports.
Ahead of the formal announcement of the moves by Britain and the United States, oil prices rose with Brent surging past $132a barrel in anticipation of reduced supply.
Also on Tuesday, the European Commission published plans to cut the EU’s dependency on Russian gas by two-thirds this year and end its reliance on Russian supplies of the fuel “well before 2030”.
Currently Russia accounts for 45% of Europe’s gas imports, with some countries more heavily reliant than others. Russia is also the source of 25% of the EU’s oil imports and 45% of coal imports.
The plan seeks to diversify the EU’s gas supplies and replace gas used in heating and power generation.
Speaking at the launch of the plan in Strasbourg, the President of the European Commission, Ursula von der Leyen said: “…We simply cannot rely on a supplier who explicitly threatens us.”
The EU’s Commissioner for Energy, Kadri Simson, said the Commission will propose that gas storage in the EU needs to be filled to at least 90% by October 1st each year. This will be contained in a legislative proposal to be introduced next month.
The plan also includes price regulation, state aid and “tax measures to protect European households and businesses” against the impact of high energy prices.
The Commission’s plans will be discussed with EU leaders at Versailles later this week.
The plan also includes the possibility for “high energy sector profits” and the returns from emissions trading to be redistributed to consumers.
Also, EU state aid rules will be changed to provide short-term support to companies affected by high energy prices. This will all be wrapped up in a new ‘State aid Temporary Crisis Framework’ following consultations with member states.
The Commission will also examine the possibility of imposing temporary price limits on energy.
Diversifying away from Russian fossil fuels will involve higher LNG imports and larger volumes of biomethane and renewable hydrogen. It will also involve more renewables and “addressing infrastructure bottlenecks.”
The new plans come on top of climate change policies the EU is currently negotiating, which are designed to cut emissions faster this decade and would alone cut EU gas use 30% by 2030.
The Commission said gas and liquefied natural gas from countries like the US and Qatar could this year replace more than a third, 60 billion cubic metres (bcm), of the 155 bcm Europe gets annually from Russia.
And by 2030, increased biomethane and hydrogen use could also help, it added. New wind and solar projects could replace 20 bcm of gas demand this year, while tripling capacity by 2030, adding 480GW of wind and 420GW of solar energy, could save 170 bcm a year.
Turning down thermostats by 1°C could save an extra 10 bcm this year, while by 2030, replacing gas boilers with 30 million heat pumps could save a further 35 bcm, the Commission added.
Some countries are seeking more EU funding to protect consumers from soaring European gas prices, which hit fresh highs this week.
Gas flows to Europe have so far been steady since the invasion, which Russia calls a “special military operation”.
However, Moscow has warned that Western sanctions on Russian oil – an idea supported by the US, but which has split EU nations – could prompt it to close a major gas pipeline to Europe.