The EU is exploring legal loopholes to allow companies to avoid penalties for ditching long-term gas contracts with Russia, the Financial Times (FT) reported on Tuesday, citing sources. The efforts are reportedly part of the bloc’s push to phase out Russian fossil fuels by 2027.
While Russian gas is not included in EU sanctions targeting Moscow, the bloc committed to cutting its reliance on Russian energy after the Ukraine conflict escalated in 2022. As a result, Russia’s share of EU pipeline gas imports dropped from over 40% in 2021 to about 11% in 2024.
Russian LNG shipments to the bloc have surged over 60% in the past three years, however. Russia’s Yamal LNG plant maintains contracts with Shell and Naturgy amongst others. Combined pipeline and LNG supplies made Russia the EU’s second-largest gas source in 2024, after Norway.
Sources told the FT that European Commission lawyers are assessing whether a force majeure clause – typically invoked during extraordinary events outside the control of contracting parties – could justify terminating binding gas supply agreements. The clause could reportedly be applied due to the Ukraine conflict, allowing firms walk away from contracts without triggering compensation claims.
“If the whole idea is not paying Russia, then [paying compensation] would undermine the whole purpose,” one EU official told the outlet.
EU officials have declined to comment on the FT report.
The European Commission planned to release a roadmap on how to quit Russian fossil fuels last month, but the document has reportedly been delayed, amid resistance from Hungary and Slovakia, both of which rely on Russian pipeline gas. Budapest has vowed to veto sanctions that jeopardize its energy security.
Commission President Ursula von der Leyen nevertheless told the FT the roadmap should be published within a month.
Several EU ministers have argued that existing legal tools are not strong enough to compel firms to abandon Russian gas, especially given high costs and supply risks. Sources also told the outlet that invoking force majeure may not hold up in court, as most contracts differ and are confidential.