EU to unveil plan for phasing out Russian gas by 2027

According to Reuters the report highlights that the European Union committed to halting imports of Russian fossil fuels by 2027 following Russia's full-scale invasion of Ukraine in 2022.

According to sources cited by Reuters, the European Commission's plan includes a commitment to propose a ban on new Russian gas contracts and spot deals by the end of 2025, with implementation possibly beginning as early as June.

The plan will also include a legal proposal to stop Russian gas imports, including liquefied natural gas (LNG), under existing contracts by the end of 2027. However, for these measures to proceed, they will need approval from the European Parliament and a majority of EU member states.

Unlike Russian coal and seaborne oil, which are already under EU sanctions, gas has remained an exception. This is primarily due to opposition from Slovakia and Hungary, which depend heavily on Russian pipeline gas and fear a sharp increase in energy prices if they are forced to transition quickly to alternative suppliers. Gas sanctions require unanimous consent from all 27 EU countries.

In the meantime, many European companies still have long-term contracts with Gazprom on a "take-or-pay" basis, meaning they must pay for most of the agreed volumes regardless of whether they use the gas. The European Commission is currently exploring legal options to allow companies to exit these contracts without incurring financial penalties. At the same time, it has expressed readiness to increase imports of U.S. LNG.

• Despite efforts to cut gas dependence on Russia after its full-scale invasion of Ukraine, Russian LNG imports into the EU hit a record high in 2024.