The EU is moving ahead with a long-held intention to phase out Russian fossil fuels, after earlier this year delaying the release of its “road map” in order to assess the impact of US efforts to end the war in Ukraine, according to people familiar with the matter. Russian gas flows to Europe dropped sharply in the wake of Moscow’s full invasion in 2022, but it remains a substantial supplier, through a pipeline via Turkey and shipments of liquefied natural gas.
The EU plans to propose in June a ban on all gas purchases under new deals with Russia and existing spot contracts, which account for about a third of imports, to take effect before the end of the year, according to the people.
The European Commission, the bloc’s executive branch, will next month also adopt measures to end the remaining imports of Russian pipeline and LNG gas tied up in long-term contracts, but they will require a longer transition until the end of 2027, the people said.
The efforts to end reliance on Russian gas will open the way for US suppliers to send more LNG to Europe, something that President Donald Trump has repeatedly called for. Costs and security remain a key focus in the wake of the energy crisis, but the EU expects its plan will have a limited effect on prices as a wave of new LNG supply hits the global market in coming years, the people said.
The stakes are huge: The EU purchased a total of €23 billion ($26 billion) in Russian energy in 2024, exceeding its military assistance to Ukraine last year. Russian imports still accounted for 19% of the 27-nation bloc’s total gas purchases last year, after LNG shipments surged to a record after Gazprom PJSC squeezed pipeline flows.
That commission’s timeline rests on the bloc’s ability to source alternative LNG supplies from the US, Qatar, Canada and Africa, according to the people. Purchases from the US are being discussed as part of trade talks with the Trump administration, Bloomberg reported last week.
While EU gas prices are now just a 10th of the peak they reached during the energy crisis following Russia’s invasion of Ukraine in 2022, the region’s supply is still tight as it replenishes depleted reserves. Significant volumes of new supply from the US and Qatar are expected from only 2027 onward.
The commission’s plans — to be unveiled in Strasbourg on Tuesday — are subject to change before the announcement, the people said.
Exiting Contracts
The commission will also aim to boost transparency over the origin of EU gas supplies, according to the people. One option would be to force companies to share key details on volumes and contract durations with national authorities and the commission.
For now, Europe remains an attractive destination for cargoes from Russia’s massive Yamal LNG plant in the Arctic, with long-term contracts signed by companies such as TotalEnergies SE, Naturgy Energy Group SA and Germany’s Securing Energy for Europe GmbH.
It’s not yet clear what measures the commission will propose to enable companies to exit from take-or-pay contracts.
Sanctioning Russian gas imports would, in theory, be the strongest legal tool, allowing European buyers to declare force majeure and walk away from their obligations. But the EU has so far avoided proposing such a measure because opposition from Hungary and Slovakia — which continue to import Russian gas by pipeline — would deny it the necessary unanimous support.
By contrast, trade-related measures considered by the commission, such as tariffs and quotas, can be adopted by a qualified majority. Yet there’s concern that may not be sufficient for companies to exit contracts, while there would also be potential impacts on prices.
Restricting short-term deals to buy Russian gas may also be challenging as there’s no fixed definition of what a spot contract is in LNG markets. Often it’s considered to be any contract of up to three months long.
On top of that, it’s not obvious when a tanker docks whether the LNG cargo has been bought on a long-term contract or on a spot basis. This will make it difficult for the EU to police the rules and assess their impact.
The roadmap will also contain steps to gradually phase out imports of nuclear materials coming from Russia, including the uranium used in Russian-designed VVER reactors, the people familiar said. Next month, the commission will present trade measures designed to make supplies from Moscow less economically viable, as well as restrictions on new contracts. Countries will face targets to end their reliance, under the plans.
And for oil, the two countries still most reliant on Russian supplies — Slovakia and Hungary — will be obliged to make plans to show how they are working to end shipments by the end of 2027, according to the people familiar with the matter.
(Bloomberg, May 5, 2025)