Southern Gas Corridor helps EU to keep prices in check - Kadri Simson

By Trend

In particular, in the current context of rising energy prices and tight gas markets the relevance of the Southern Gas Corridor for enhancing security of supply in Europe has only increased, European Commissioner for Energy Kadri Simson said in an exclusive interview with Trend.

“Azerbaijan offers the EU gas supplies from a new source and via a new route. I believe that TAP has a positive impact on the countries and regions it serves, and greatly contributes to reliable, competitive and affordable supply in Southern East Europe. The Southern Gas Corridor has a strategic importance for the European Union,” she said.

The energy commissioner recalled that the first flows from TAP started in December 2020 and will be ramped up to full potential of 10 billion cubic metres (bcm) by this summer.

“Part of this capacity is being used in Southern European market, making this region less dependent on one supplier. The remaining capacity arrives in Italy and allows the Italian gas market to further diversify its supply options, to enhance the security of supply and to make the gas market more liquid and competitive,” added Simson.

The European commissioner went on to add that any new or additional supply helps with price pressure.

“The arrival of supplies from the Southern Gas Corridor on the Italian gas market had initially a significant effect on reducing the wholesale price of gas in this market. This is the best evidence that open, competitive gas markets with diversified gas routes are the best option for the EU to keep the gas prices in check. The Southern Gas Corridor helps the EU to achieve this objective. Therefore, we are looking forward to strategic energy cooperation with Azerbaijan,” she explained.

Talking on measures for mitigating the gas crisis in Europe, Simson noted that already in October, the Commission provided a toolbox with a selection of measures for Member States to alleviate the impact of high prices, especially on the vulnerable.

“Next to measures that are targeted to support end consumers, e.g. via social payments or tax reductions, there are also mid to long-term measures focusing on increasing resilience by reducing import dependency. This can be achieved by energy efficiency gains (i.e. reducing consumption), stepping up investments in renewable energy as well as improving the functioning of the gas market. More than 20 Member States have taken steps outlined in the toolbox and our preliminary analysis shows that these measures amount to around 21 billion euros. The Commission itself proposed in December changes to EU law that would improve the use of gas storage, create the option for voluntary joint purchases of gas reserves and reinforce solidarity between Member States in case of a supply crisis. In addition, we are reaching out to our main suppliers – including Azerbaijan – to explore options to increase supplies to the EU. This would both reduce the price pressure as well as strengthen security of supply,” she said.

Kadri Simson also spoke about the work done to reach zero emission in Europe.

“We are well on the way. The EU has reached unanimous agreement on the long-term aim of achieving climate-neutrality by 2050 and have also set a common target for 2030. This is embodied in the European Climate Law, which entered into force last year. In July and December last year, the Commission came out with concrete proposals to achieve our goals. The package includes more than a dozen cross-sectoral measures and will help the EU to reduce its emissions by at least 55% by 2030,” said the European commissioner.

She pointed out that the EU met comfortably its renewables target for 2020 and was close to its energy efficiency target for the same period.

“We are therefore on track to reach its intermediate objectives in 2030 and climate neutrality by 2050. 75% of the EU’s overall greenhouse gas emissions result from the production and use of energy. It will therefore be important to decarbonise the energy sector rapidly, e.g. through the electrification of the transport and heating and cooling sectors. Natural gas will still be needed for many years to come during the EU’s transition, in particular to replace more polluting energy sources,” Commissioner Simson concluded.