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UKRAINE

Austria rejects embargo on Russian gas

The Austrian government has said it will continue to import Russian gas and oil, despite growing pressure to impose an embargo in recent days due to the discovery of the atrocities in Bucha.

Austria will not adopt an embargo on Russian gas and oil. Photo by Magda Ehlers on Pexels.
What could happen if we enter winter in Austria with a limited supply of gas? The Austrian Association of Cities is currently discussing contingency plans. Photo by Magda Ehlers on Pexels.

Austria’s Finance Minister said on Tuesday he rejects an immediate embargo on Russian energy, despite the atrocities in Bucha carried out in the war against Ukraine. 

Magnus Brunner (ÖVP) made the statement before a meeting of the Eurogroup in Luxembourg on Monday. 

Brunner said Austria, like Germany, is heavily dependent on Russian gas. While the medium-term goal is to become more independent it would be “unrealistic” to make the switch overnight. 

Foreign Minister Alexander Schallenberg (ÖVP) has also spoken out in the Ö1-Mittagsjournal against an embargo on Russian gas, saying sanctions would hit the wrong people. 

Other sanctions are expected. 

How effective would an embargo be?

While sanctions are already biting into the Russian economy, they are expected to only result in an overall decrease of around ten percent. 

Stopping imports of Russian oil and gas – for instance on a widespread basis like a EU-wide ban – would result in far more significant damage to the Russian economy, placing greater pressure on Russian President Vladimir Putin. 

Austria is heavily dependent on Russia to fulfil its energy demands, like many other countries in Central and Eastern Europe.

Prior to Russia’s invasion of Ukraine, Elisabeth Christen, Senior Economist at the Austrian Institute of Economic Research (Wifo) told The Local that 80 percent of Austria’s gas is imported from Russia and that most of the EU is heavily dependent on Russian gas.

READ MORE: How reliant is Austria on Russia for energy?

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ENERGY

ENERGY: How Austria has drastically reduced imports of Russian gas

Austria is no longer heavily dependent on Russian gas. How has this happened and how will it impact Austria’s gas supplies this winter? Here’s what you need to know.

ENERGY: How Austria has drastically reduced imports of Russian gas

Austria’s gas supply looks very different today compared to earlier this year when Russia invaded Ukraine.

Back in February, Austria sourced around 80 percent of all gas from Russia, with 10 percent coming from Norway, five percent from Germany and the remainder from other sources.

This put Austria in a delicate position as the EU began placing sanctions on Russia and experts voiced fears about Russia turning off the gas supply to Europe. This also took place at a time when Austria’s gas reserve tanks were only around 12 percent full.

READ MORE: Can British people in Austria claim the winter fuel payment from the UK?

However, as the first snowfall now covers more parts of the country, E-Control (the government regulator for electricity and gas markets) has confirmed that Austria reduced imports of Russian gas to 21 percent in September. 

The country’s gas tanks are also well stocked at just over 95 percent following a mild autumn. Although around a third of the gas belongs to neighbouring countries.

So how did this happen and where is Austria getting gas from now? The Local took a closer look to find out.

How did Austria reduce imports of Russian gas?

The biggest change to how Austria sources natural gas was by booking line capacity on pipelines that flow from Germany and Italy, reported Die Presse.

The gas now flowing to Austria is mostly coming from Norway or is liquefied natural gas (LNG).

At a recent press conference in Vienna, Johannes Schmidt from the Institute for Sustainable Economic Development, said: “Actually, it’s incredible what Europe and Austria in particular have achieved here over the summer.”

Austria’s partially state-owned OMV has also booked 40 terawatt hours (TWh) of gas transport capacity from Norway and non-Russian LNG suppliers for the period from October 2022 to September 2023. This gas is delivered to a tank in Oberkappel, Upper Austria, via Germany.

FOR MEMBERS: What are the rules about turning on the heating in the workplace in Austria?

Additionally, Austria has confirmed LNG shipments from Dubai, which further helps to boost the country’s energy security.

Picture taken on May 3, 2022 shows a general view of the largest Austrian refinery OMV at Schwechat near Vienna, Austria. (Photo by JOE KLAMAR / AFP)

A statement released from the Federal Chancellery said: “The United Arab Emirates are a strategic partner of Austria and will make a contribution to the security of supply with LNG deliveries next winter, as agreed between OMV and the Emirati ADNOC.

“Furthermore, the Austrian and Emirati governments will intensify cooperation on energy issues and climate protection.”

However, purchasing gas from new sources hasn’t been the only tactic to reduce Austria’s dependency on Russian gas.

In July, Austria and Germany finalised a solidarity agreement to secure gas flows between the two countries in the event of an energy crisis. And in September, the Austrian Federal Government launched the “Mission 11” campaign to encourage consumers to save energy. 

Finally, there are long-term plans to expand renewable energy infrastructure across Austria to reduce the overall dependency on natural gas. But the results of this part of the plan will not be seen until the coming years.

READ MORE: How expensive are gas and electricity in Austria right now?

Is Austria’s gas supply now secure?

Experts are positive about Austria’s ability to get through the coming winter without running out of gas.

However, they are now concerned about winter 2023/2024 with plans already being hashed out about how to secure gas supplies next spring and summer to fill up the tanks again.

The procurement of gas has also come at a big cost to Austria with the government spending €3.95 billion alone on securing the recently implemented strategic gas reserve of 20 percent of overall consumption, reports ORF.

And with energy prices set to skyrocket again for the next storage season, it’s likely the Austrian government will have to dig deep into the financial reserves once more in the spring.

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