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Europe: EU plans legal path to end Russian gas contracts without penalties

The European Union is developing legal measures that would allow companies to terminate long-term contracts for Russian gas without facing penalties, citing force majeure. This move is part of the EU’s broader strategy to eliminate its reliance on Russian fossil fuels by 2027.

European Commission President Ursula von der Leyen announced that the Commission will present a detailed plan within the next two weeks, outlining the steps to phase out all imports of Russian fossil fuels. She highlighted that Russian gas imports have already dropped significantly, from around 45% in 2021 to 18% today. While pipeline imports have sharply declined, the gap has been largely filled by increased liquefied natural gas (LNG) shipments from the United States and higher gas exports from Norway. Von der Leyen emphasized that strong energy partnerships, especially with the U.S., are critical for the EU’s energy security.

The Commission is currently reviewing several legal options, including new legislation that would prohibit EU companies from signing new contracts for Russian gas and offer legal grounds for exiting existing agreements without penalties.

Despite the reduction in pipeline deliveries, imports of Russian LNG have risen by 60% in recent years, raising concerns about the EU’s ability to meet its 2027 target. The European Commission had previously launched the REPowerEU plan, which aims to cut dependence on Russian fossil fuels before 2030 through energy savings, expansion of clean energy, and diversification of supply sources.

However, some member states, including Hungary and Slovakia, have voiced concerns over the economic impact of a rapid energy transition. In response, the Commission is also exploring alternative measures, such as imposing tariffs instead of implementing a full ban, in an effort to balance economic stability with strategic goals and avoid escalating geopolitical tensions.

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