Malta exempted from EU gas reduction target due to absence of pipeline

Malta will be exempted from a new EU agreement to reduce gas demand by 15%, because it is not interconnected to member states’ gas networks.

Malta, which is supplied LNG for its Delimara plant via a floating storage terminal, will be exempt from mandatory gas reductions, as well as because it remains reliant on gas for electricity production.

The European Union’s member states have reached a political agreement on a voluntary reduction of natural gas demand by 15% for the coming winter, in a bid to make savings ahead of possible disruptions of gas supplies from Russia.

The proposed regulation will allow the EU to trigger an alert on security of supply, in which case the gas demand reduction would become mandatory.

“The fact that we remain disconnected from the trans-European gas network does not mean we are not sensitive to the challenges face by other member states,” energy minister Miriam Dalli told the energy council.

Malta partially relies in Italy to meet electricity demand, where prices have soared to €650 per MegaWatt-hour.

“Our ultimate aim is that of protecting consumers, jobs and economies, but most importantly to shift to cleaner energy options. We’re working hard to ramp up our share of renewables... reducing energy demand, encouraging consumers to opt for renewables, solar water heaters and heat pumps, and giving targeted finance to industry to invest in energy-efficient equipment, though present state aid rules limit that assistance.”

Dalli also said the EU should prioritise investment into renewable projects for its sea basinsm namely floating technologies.”

The Czech presidency of the EU hailed the agreement as a sign of solidarity between European states against any Russian attempt to divide the EU by using energy supplies as a weapon. “Adopting the gas reduction proposal in record time has undoubtedly strengthened our common energy security. Saving gas now will improve preparedness. The winter will be much cheaper and easier for EU’s citizens and industry,” said Jozef Síkela, Czech minister of industry and trade.

German’s minister for the economy and energy, Robert Habeck, said the EU’s proposal for gas reduction had been negatively portrayed in the media. “Yet in five days, some form of agreement has been achieved. This shows Europe’s ability to act in the face of a clear strategy from the Kremlin... to break European solidarity with high prices.”

The reduction in gas demand of 15% compared to the average consumption in the past five years, will be carrid out between 1 August 2022 and 31 March 2023, with eahc country adopting measures of their own choice.

Member states were told to choose demand reduction measures by prioritising measures that do not affect protected customers such as households and essential services like healthcare and defence.

Possible measures include reducing gas consumed in the electricity sector, measures to encourage fuel switch in industry, national awareness raising campaigns, targeted obligations to reduce heating and cooling and market-based measures such as auctioning between companies.

The regulation is an exceptional measure, foreseen for one year only so far.

Europe’s energy ministers exchanged views today the initiatives proposed by the Commission in its ‘Save gas for a safe winter’ package.

The European Commission’s REPowerEU Plan seeks to send the EU’s dependence on Russian fossil fuels and tackling the climate crisis.

“Putin thinks democracy is decadent and weak,” EC vice-president Frans Timmermans said, sounding an optimistic note on the EU’s joint procurement missions to North Africa and Azerbaijan. “We will prove him wrong. But apart from proving him wrong, we must create the right levels of solidarity in our energy system.”