Context of the Statement
Following the Russian invasion of Ukraine in February 2022 the European Commission issued a Communication for More Affordable, Secure and Sustainable Energy calling for an additional 50bcm of LNG in 2022 and the complete phase out of Russian natural gas supplies to the EU by 2027. This was supported on 25th March 2022 with a joint U.S.-E.U. declaration on Energy Security that identified the targets of delivering an extra 15bcm of U.S. LNG to the E.U. in 2022 and a further 50bcm per annum in the following years.
To achieve such objectives we have identified the following set of actions that will be needed to be undertaken by the E.U. and U.S. administrations, together with the industry.
We support the following actions that are needed to reach our ambition of 50bcm of LNG, per annum, to be delivered from the U.S. to the E.U. by 2027
- Climate ambitions must be upheld, the suppliers and buyers agree to work together to reduce methane emissions and carbon emissions in the most effective way. Our ambition is to have the cleanest gas possible delivered from the U.S. We will uphold the Methane Regulation rules laid down by the European administration and we encourage the U.S. administration to bring forward a pragmatic approach to reduce the greenhouse gas emission impact of the LNG industry substantially within the next eight years.
- Investments in the additional LNG infrastructure needed to deliver and distribute additional LNG volumes need certainty and security, as well as being compatible and consistent with the transition of our economies towards climate neutrality. Therefore, supportive policies must be quickly put in place in 2022 to make the increase in LNG deliveries from the U.S. to the E.U. possible in the time frame set out in the U.S. – E.U. Energy Security Taskforce announcement of 25 March 2022, as new LNG deliveries before 2030 means that contracts need to be signed in 2023 and contracted volume is important for the investment decisions for additional LNG infrastructure.
- Since the beginning of the Russian invasion, and in response to European needs, market participants have managed to deliver more than double the volume of U.S. LNG in 2022 since the war began, compared to the same months of 2021 to European terminals. We strongly believe that existing market instruments, including long term contracts for LNG delivery must continue to be supported by the administrations, and industry must be free to negotiate the terms that will ensure that the right amount of gas will be available at the right time for European consumers.
- Permitting of facilities (both liquefaction and regasification) and pipelines will need to be smooth and speedy to facilitate the quick development of U.S. LNG destined for the E.U., without undermining the environmental and safety standards of the respective parties.
- Both administrations need to identify LNG flagship projects to build the infrastructure required as quickly as possible. This should involve a funding mechanism for LNG related projects, including pipes from coastal countries to Central and Eastern European countries.
- We can commit to ensuring that, as much as possible, all new infrastructure is hydrogen ready to support the climate objectives of the gas sector and the E.U. and U.S. administrations.
- For voluntary Joint Purchasing of natural gas volumes, a set of guidelines must be produced with industry involvement to ensure that any such activity is effective and contributes to alleviating supply constraints in the E.U. Any such approach will require the strong involvement of the gas sector, and that the European Commission, together with the E.U. Member State governments and/or the competent national authorities, will establish the required framework that provides such activity, and the companies engaged in it, broad exemptions from competition law.
With the delivery of these actions, we the association representatives of the E.U. and U.S. gas sector can support the achievement of the ambition of RePowerEU and the U.S. – E.U. Energy Security Taskforce in respect of the delivery of increased U.S. LNG volumes to the E.U. by 2027.