Mixed EU energy policy headlines have circulated for weeks, as the continent attempts to institute a Russian oil import ban (USO), while encouraging continued natural gas flows (UNG). Over the weekend, and Monday, EU policy makers appeared to make some progress. Policy makers have drawn up plans to allow energy companies to establish accounts with Gazprombank, while Germany plans to “go it alone” on Russian oil and nuclear energy (OTCPK:SRUUF).
In late March, the Kremlin decided gas payments from “unfriendly countries” would need to be made in Rubles. A measure in violation of current EU sanctions. The Kremlin advised EU energy companies to establish Euro / USD accounts with Gazprombank, as well as separate Ruble accounts with the bank. While reports indicate the European Commission has advised energy companies to establish Euro / USD accounts with Gazprombank, no clear guidance has been given on Ruble accounts. Italian Prime Minister Mario Draghi said last week that companies will be allowed to pay for gas in Rubles, and Italy’s ENI (E) has gone ahead with plans to open Ruble accounts.
Meanwhile, progress on an EU-wide Russian oil import ban has slowed, as members have indicated a bloc-wide ban would handicap economies in Eastern Europe. Slowed progress on an EU-wide ban led the G7 to announce a Russian oil import ban. Nevertheless, Monday, German government officials said the country would end Russian oil imports by year end, regardless of EU-wide or G7 policy measures. The measure would likely require Germany to nationalize the Rosneft (OTCPK:RNFTF) owned Schwedt refinery, and supply crude feedstocks from strategic reserves, in part.
Separately, German government officials said Monday that the country would oppose plans to consider nuclear energy as “sustainable” under the EU’s proposed “taxonomy.” The policy-linked taxonomy would allow for “green friendly” financing of nuclear energy projects. Rejecting the proposal would require 20 of 27 EU members to oppose, a threshold Germany is unlikely to meet. However, it’s a clear indication that Germany plans to move forward with shuttering the country’s existing nuclear fleet.