‘Europe is too dependent on Russian gas’ VDL admits huge financial pain ahead for EU

Announcing a raft of new economic sanctions the European Union will hit Russia with amid its invasion of Ukraine, Ursula von der Leyen said it was time the EU moved on from buying Russian gas and invested in renewable energy options from “reliable suppliers”.

Speaking at a press conference on Tuesday, she said: “This crisis shows that Europe is too dependent on Russian gas, we have to diversify our supplies, and we have to go to reliable suppliers.

“We will have to massively invest in renewable energy, that is where the future is, because this is a strategic investment in our energy investments.”

She also added how it was “absolutely right” for Germany to scrap its controversial Nord Stream 2 project which saw Russia supply the Germans with gas.

Ms von der Leyen stressed how the project also has to be further assessed in light of the energy supply crisis for the whole of the EU, as she hinted at major plans ahead for the bloc.

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But the decision by German Chancellor Olaf Scholz to plug the pipeline project with Russia will leave a €46 billion black hole for the EU gas market leaving the bloc with an energy supply headache.

Following the scrapping, Mr Scholz said on Tuesday: “The appropriate departments of the economy ministry will make a new assessment of the security of our supply in light of what has changed in last few days.”

The pipeline, which former German Chancellor Angela Merkel pushed hard for, has been built but is not yet in operation because it is awaiting German and EU regulatory approval. 

A spokesman for Nord Stream 2 told Express.co.uk “Western European energy companies from Austria, Germany, France, and the Netherlands have invested almost 1 billion euros each in the project.

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“There are overall investments of approximately 12 billion euros in EU energy infrastructure, i.e. approx. 8 billion euros in budgeted project cost of Nord Stream 2 as well as a further 3 billion euros in investments by separate European companies in downstream infrastructure in Germany and 750 million euros in the Czech Republic.”

A study by the Energy Economic Institute of the University of Cologne has shown that Nord Stream 2 can lower gas prices in Germany and the wider EU market (as well as the UK) by expanding the liquidity of gas markets.

It comes as Russian President Vladimir Putin ordered his troops to invade the eastern regions of Luhansk and Donetsk within Ukraine, currently held by pro-Russian seperatists.

He claims the move is only for “peace-keeping” reasons, despite crossing over the border and breaking international law and peace agreements.

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In an hour-long rambling speech to the nation, President Putin declared Russia recognised Luhansk and Donetsk as “independent” states, green lighting his move into the region.

Following the invasion on Monday night, Ms von der Leyen explained how the bloc “will make it as difficult as possible for the Kremlin to pursue its aggressive actions.”

While she also added that Russia is “not respecting its international obligations” warning that President Putin “is violating core principles of international law”.

She went on: “Russia has manufactured this crisis and is responsible for the current escalation. We will now quickly finalise the sanctions package and we will coordinate closely with our partners as we have done so far.”