EU Approves Total Ban on Russian Gas

Written by Martin Lynch, European News Editor for IIR News Intelligence (Sugar Land, Texas)

Summary

Europe has formally adopted measures to ban all Russian gas in the latest sanction against the country over its invasion of neighboring Ukraine in 2022.

End of an Era

The European Union (EU) has formally adopted measures to phase out all Russian imports of pipeline gas and liquified natural gas (LNG) into the EU.

The decision marks a milestone moment in the region's REPowerEU strategy to end its historic reliance on Russian energy. In just over a year the regulation has gone from being a request by key Member States to law. Last January, Industrial Info reported that 10 EU nations had called for sanctions on Russian pipeline gas and LNG in addition to the sanctions in place on Russian oil and other exports. For additional information, see January 22, 2025, article - EU Nations Demand Sanctions on Russian Gas & LNG. Twenty-four of the 27 EU member states voted in favor of the regulation, while Hungary will seek to challenge the move.

An Autonomous Energy Union

Michael Damianos, Minister for Energy, Commerce and Industry of the Republic of Cyprus, said: "As of today, the EU energy market will be stronger, more resilient and more diversified. We are breaking away from the detrimental reliance on Russian gas and taking a major step, in a spirit of solidarity and cooperation, towards an autonomous Energy Union." The Commission will also propose legislation to phase out Russian oil imports by the end of 2027. 

Timescale

The stepwise ban will start to be applied six weeks after the regulation enters into force, while existing contracts will have a transition period in an effort to limit the impact on prices and markets. LNG imports under short-term contracts signed before June 17, 2025, will be banned on April 25, 2026, and June 17 for pipeline gas. A full ban will take effect for LNG imports from the beginning of 2027 and for pipeline gas imports from autumn 2027. All 27 EU Member States will have to prepare national plans to diversify gas supplies and identify potential challenges in replacing Russian gas by March 1. Going forward, EU countries will verify the country where gas imports were produced before entry is authorised. 

Impact on Companies

Companies will be required to notify authorities and the Commission of any remaining Russian gas contracts, while EU countries still importing Russian oil will also have to submit diversification plans. According to the regulation, non-compliance can result in maximum penalties of at least 2.5 million euro (US$2.95 million) for individuals and 40 million euro (US$47.2 million) for companies, at least 3.5% of the company's total worldwide annual turnover, or 300% of the estimated transaction turnover.

The Current Role of Russian Gas & Oil Imports

Russia supplied 45% of the EU's gas before invading Ukraine in 2022, but gas and oil imports from Russia to the EU have decreased significantly in recent years due to sanctions, with oil down to below 3% in 2025. However, the Commission recognised that Russian gas still accounted for an estimated 13% of EU imports in 2025, worth more than 15 billion euro (US$17.7 billion) annually. It is something that  "leaves the EU exposed to significant risks in terms of its trade and energy security" and something the adopted regulation aims to end. 

Security of Supply Concerns

In the event of a "declared emergency" and if security of supply is seriously threatened in one or more EU countries, the Commission can suspend the import ban for up to four weeks.

Key Takeaways

• The EU has formally adopted measures to phase out all Russian imports of pipeline gas and liquified natural gas.
• Companies can face severe fines for non-compliance.
• New legislation coming to phase out Russian oil imports by the end of 2027. 

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