Government announces halt to energy purchases from Russia by the end of the year and measures to fill gas storage facilities

The government is seeking to wind down the Netherlands’ dependence on coal, oil and gas from Russia as quickly as is practicable and preferably by the end of this year. It is pursuing this aim actively both nationally and at EU level.

By promoting energy efficiency, speeding up the energy transition and increased energy imports from other countries, the Netherlands aims to save and replace in full the share of its energy needs that is met by Russian gas by the end of the year. In keeping with the rest of the European Union, the Netherlands will stop importing coal from Russia by 11 August 2022 at the latest. Over the coming weeks the government will seek to reach agreements with other countries in order to end the dependence on Russian oil as quickly as possible, while maintaining sufficient security of supply.

The government is also taking action to guarantee that gas storage facilities will be sufficiently filled by next winter, by introducing a guarantee scheme to mitigate the risks of high gas prices and having the Dutch state-owned company Energie Beheer Nederland (EBN) partially fill the gas storage facilities.

Phasing out fossil fuels

It is estimated that Dutch gas consumption can be reduced by around 9 billion cubic metres by 2025 by means of sustainability measures. This is more than the volume of gas imported from Russia (around 6 billion cubic metres). Expanding the LNG (liquefied natural gas) terminal in Rotterdam and installing a floating LNG terminal in the port of Eemshaven will enable the Netherlands to import an extra 8 billion cubic metres of LNG by the end of the year. This is dependent on the availability of sufficient LNG on the global market. Because the gas market is international, European agreements are needed to phase out Russian gas completely.

The European Union agreed as part of its fifth sanctions package that coal from Russia would no longer be bought in Europe after 11 August 2022. The government also wants to stop importing oil from Russia as soon as possible. The Netherlands has therefore requested the European Commission to do an analysis how Europe can wind down its purchases of Russian oil while maintaining sufficient security of supply.

Filling gas storage facilities

It is important that gas storage facilities are sufficiently filled in preparation for next winter, but this is currently not attractive for companies due to high gas prices and the associated risks of losses. The government is therefore setting up a guarantee scheme to encourage companies to do so. Under the scheme, it will reimburse the difference between current gas prices and gas prices next winter. In this way the government will assume part of the price risk. In addition, the government is instructing EBN to fill the Bergermeer gas storage facility up to 70% of its capacity, in so far as other companies do not do so despite the guarantee scheme. The estimated total cost of the measure is €623 million, depending on gas prices. It will be recovered, by means of an extra levy, from gas consumers who profit from the filling of the gas storage facilities.