The European Union (EU) is set to propose a ban on Russian gas imports by the end of 2027, as part of its ongoing efforts to sever ties with the country that was once its primary energy supplier. This move is a significant step in the EU’s strategy to phase out Russian fossil fuels, a plan that has been in the works for some time but was delayed earlier this year to assess the impact of U.S. actions aimed at ending the war in Ukraine.
Russian gas shipments to Europe have sharply declined since Moscow’s full-scale invasion of Ukraine in 2022, but Russia still remains a major energy supplier. While some gas still flows via pipeline through Turkey and as liquefied natural gas (LNG) shipments, the EU is determined to cut this reliance. In June, the EU will propose a ban on new gas contracts with Russia, including both spot market purchases and new long-term deals, with plans for the ban to take effect by the end of 2023. This would affect roughly a third of the EU’s Russian gas imports.
Additionally, the European Commission will introduce measures next month to phase out the remaining Russian pipeline and LNG gas tied to long-term contracts, aiming for full cessation by 2027. These plans could open up more space for LNG imports from the U.S., a move repeatedly endorsed by former President Donald Trump. The EU anticipates that the impact on gas prices will be limited, as new LNG supplies are expected to flood the global market in the coming years.
In 2024, the EU spent €23 billion (about $26 billion) on Russian energy, a sum that exceeded its military aid to Ukraine. Last year, Russian imports still accounted for 19% of the EU’s total gas purchases, though this dropped significantly as LNG imports surged following reduced pipeline flows from Gazprom.
The EU’s ability to execute this plan hinges on securing alternative LNG supplies, primarily from the U.S., Qatar, Canada, and Africa. Negotiations with the U.S. are ongoing as part of trade talks. While European gas prices have fallen drastically from their peak during the 2022 energy crisis, the region is still dealing with tight supply as it replenishes reserves. The influx of new supply from the U.S. and Qatar is expected to begin only in 2027.
The European Commission’s plans are set to be announced in Strasbourg on Tuesday, though they may change before the official release. European gas futures fell by as much as 2.1% on Monday before recovering some of the losses. Alongside the ban, the Commission also plans to increase transparency around the origin of EU gas supplies, potentially requiring companies to disclose volumes and contract details to national authorities.
Any new legislative proposals will require approval from both EU member states and the European Parliament. For the ban to take effect by the end of this year, the EU will need to move quickly. Currently, European companies still find Russian LNG from the Yamal LNG plant in the Arctic appealing, with long-term contracts in place with firms like TotalEnergies, Naturgy, and Germany’s Securing Energy for Europe.
The EU has yet to clarify how it will help companies exit existing take-or-pay contracts with Russia. Sanctioning Russian gas imports would be the strongest legal tool to enable such exits, but Hungary and Slovakia, which continue to import Russian gas, are likely to block such measures. Instead, the EU may explore trade-related measures like tariffs or quotas, which require a qualified majority vote but may not be enough to compel companies to cancel contracts.
In addition to gas, the EU’s roadmap will include steps to gradually reduce imports of nuclear materials from Russia, such as uranium used in Russian-designed reactors. The timeline and details of these efforts are still being finalized, but the EU is committed to reducing its reliance on Russian energy sources in the coming years.
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