Energy & Economics

European Union industrial policy and gas supply in the Anti-Russian sanctions strengthening

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by Pavel Sergeev

First Published in: Mar.30,2022

Mar.10, 2023



The main problems of prospective natural gas supply to the European Union countries in the context of strengthening anti-Russian sanctions are considered, including an assessment of the possibilities of its replacement with supplies of liquefied natural gas.


The strengthening of anti-Russian sanctions by the European Union (EU) is aimed, in particular, at reducing the consumption and import of natural gas from Russia. The continuing high level of its consumption (in 2020 is equal to 380 Bcm) with insignificant own production means significant imports from Russia: in 2020 - 169 Bcm or 44% of regional gas consumption.


Despite intensive industrial policy efforts to expand the use of renewable energy sources, it can only be replaced by supplies of liquefied natural gas (LNG) from other countries. However, it is clear that the volumes required for this are extremely large for the world's production and export potential. Thus, the growth of world LNG exports in 2020 amounted to only 4 Bcm (0.6%) and 186 Bcm for 2010-2020 (an average of about 7% annually). At the same time, price competition with Asian consumers for new volumes of LNG entering the market should also be taken into account.


An additional burden is created negative on the environment, since the energy and other costs of gasification/regasification and sea transportation of LNG are significantly higher than for the movement of an equivalent volume of gas by pipeline. And the creation of additional export and receiving terminals in port areas means for them an increase in the risk of technological accidents, which, under unfavorable circumstances, can develop into an environmental catastrophe.


This is all the more important given the fact that environmental degradation continues under the influence of anthropogenic factors, which accelerates negative climate change.


If we do not consider the problem of the destruction of the foundations of international trade and international law by anti-Russian and other sanctions, then can see from the EU an attempt to simplify the solution of the complex problem of gas supply in the context of the coming crisis in the world economy, which can lead to the crisis worldwide. At the same time, many countries underestimate the scale and depth of the negative consequences for the prospects for their national development.


Anti-Russian sanctions have an increasing negative impact on the global economy. That is why, given the continuing high level of dependence on the supply of Russian energy products, German Chancellor Olaf Scholz pointed out the need to take into account the "reverse effect" of sanctions, referring to the impossibility of providing the energy needs of the EU in any other way.


Excessive rush to abandon Russian supplies to the EU countries means for them an increase in prices for energy supply and energy-intensive industrial and agricultural goods, which will necessarily have political consequences. Sure, German President FrankWalter Steinmeier has no illusions about this also.


It is important to note that Russia's planned revision of the currency of payment for gas was perceived by EU bureaucrats with emotions excessively given that the basis of international trade is the principle of freedom in trade.


With its specific approach to solving urgent problems of life support, the bureaucracy of the EU countries surprisingly resembles the disciplined part of the characters in the book "Lord of the Flies". Only in contrast to the book auspicious ending, the reality of the twenty-first century can be completely different for them.

First published in :

Primakov Institute of World Economy and International Relations


Pavel Sergeev

Dr. of Science (Economics),  

Lead Researcher, Section for Corporate Governance and Investment Problems, 

Staff Member, Center for Industrial and Investment Studies, 

Primakov National Research Institute of World Economy and International Relations, Moscow, Russia.

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