(Bloomberg) -- European Union leaders are set to discuss ways to drain Russian energy revenues as part of broader talks Thursday on boosting the region’s security of supply.
While the 27-nation bloc is determined to cut its reliance on Russian fuels, it has so far stopped short of imposing sanctions on energy from its top supplier. Opponents to an embargo such as Germany and Austria have shown little sign they’ll change position soon unless Russia significantly escalates the war. Yet EU states have a range of other tools they can consider, from temporary gas-price caps to tariffs on oil-product imports, if they can overcome divisions.
At their two-day gathering, EU leaders are due to debate ways to cushion households and businesses from the impact of soaring gas prices while moving to replace Russian flows. European Commission President Ursula von der Leyen and U.S. President Joe Biden -- also joining the summit -- are set to announce a deal on Friday that will help the EU weather the energy crunch.
One way to curb Russia’s energy revenues is to withhold a share of payments to Moscow and put the money toward war-recovery efforts in Ukraine, Estonian Prime Minister Kaja Kallas will tell her counterparts at the summit. The plan would see governments hold back any payments that exceed pre-war energy prices and use them to fund Ukraine’s future reconstruction, according to a person familiar with the proposal that’s been shared with other member states.
EU nations could also consider tariffs on Russian energy, helping to loosen their dependence on supplies from the country while limiting Moscow’s revenues, according to EU diplomats with knowledge of the matter.
Europe depends on Russia for more than a third of its gas supply and around a quarter of its oil imports. Last year, the EU bought almost 100 billion euros ($110 billion) of energy from the country.
Mindful that efforts to replace Russian fuels could risk further price spikes, EU leaders are set to back a call by the European Commission to consider joint purchases of natural gas, liquefied natural gas and hydrogen.
Belgium, which supports such collective bargaining, is also seeking a temporary price cap on the wholesale gas market as a last-resort solution to help lower prices in negotiations with international suppliers, according to EU diplomats with knowledge of the matter.
Other countries, including Spain and Italy, have called for a more profound reform of the EU energy market, seeking tools to decouple power and gas prices. Leaders are unlikely to endorse such an intervention at the summit, instead tasking ministers with further analysis of the issue.
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