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UKRAINE

Germany releases billions to move away from Russian gas

Germany has released nearly three billion euros ($3.2 billion) to acquire floating liquefied natural gas import terminals, the finance ministry said Friday, as it seeks to move away from dependence on Russian gas.

logo of Russian Gazprom's German subsidiary
A photo taken on April 5, 2022 shows the logo of Russian gas giant Gazprom's German subsidiary Gazprom Germania on their headquarters in Berlin, Germany. John MACDOUGALL / AFP

“Dependence on Russian energy imports must be reduced quickly and sustainably,” tweeted Finance Minister Christian Lindner.

“Floating LNG terminals make an important contribution to this, for which we must provide funding,” he added.

A total of 2.94 billion euros has been made available for the lease of these huge LNG carriers, the finance ministry told AFP.

Europe, and Germany in particular, is counting on LNG to reduce its dependence on Russian imports after Moscow’s invasion of Ukraine.

Some 20 countries export this liquefied gas which is transported by ship, and whose three largest suppliers are Australia, Qatar and the United States.

Liquefied to take up less space, the LNG is regasified on arrival for distribution.

The mobile terminals, known as Floating Storage Regasification Units (FSRU), allow for converting LNG carried by a tanker into gas and injecting it into the pipeline network.

Last week European countries announced expanded efforts to wean themselves off Russian gas.

Russia is a major fossil fuel producer and accounted for around 45 percent of the European Union’s gas imports last year, but the bloc is under pressure to impose sanctions on oil and gas imports from Moscow.

In recent years, Germany has imported an average of 55 percent of its gas from Russia via onshore pipelines.

This share was reduced to 40 percent by the end of the first quarter of 2022, in favour of higher imports from the Netherlands, Norway and of LNG, according to the economy ministry.

Unlike several European countries, however, Germany does not have an onshore terminal to process imported liquefied gas.

For the time being, it relies on terminals in other EU countries, which limits its import capacity.

According to German media reports, the government is considering, in conjunction with private partners, the rental of three or four ships that would be positioned in North Sea or Baltic ports for this purpose.

Some of these facilities could be in operation by next winter.

The government does not consider it realistic to be able to do without Russian gas before mid-2024.

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ENERGY

Should tenants in Germany be shielded from energy price hikes?

Gas prices have more than tripled in the past year, prompting tenants' rights advocates to call for more social support and a cap on energy costs.

Should tenants in Germany be shielded from energy price hikes?

The German’s Tenants’ Association is calling on the government to put together a new energy relief package to help renters deal with spiralling energy costs.

Gas has become an increasing scarce resource in Germany, with the Economics Ministry raising the alert level recently after Russia docked supplies by 60 percent.

The continued supply issues have caused prices to skyrocket. According to the German import prices published on Thursday, natural gas was three times as expensive in May 2022 as it was in May a year ago.

In light of the exploding prices, the German Tenants’ Association is putting the government under pressure to offer greater relief for renters.

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Proposals on the table include a moratorium on terminating tenancy agreements and a permanent heating cost subsidy for all low-income households.

The Tenants’ Association has argued that nobody should face eviction for being unable to cope with soaring bills and is urging the government to adjust housing benefits in line with the higher prices. 

Gas price cap

Renters’ advocates have also joined a chorus of people advocating for a cap on consumer gas prices to prevent costs from rising indefinitely.

Recently, Frank Bsirske, a member of the parliamentary Green Party and former head of the trade union Verdi, spoke out in favour of capping prices. Bavaria’s economics minister and Lower Saxony’s energy minister have also advocated for a gas price cap in the past. 

According to the tenants’ association, the vast majority of tenants use gas for heating and are directly affected by recent price increases.

At the G7 summit in Bavaria this week, leaders of the developed nations discussed plans for a coordinated cut in oil prices to prevent Russia from reaping the rewards of the energy crisis. 

In an initiative spearheaded by the US, the group of rich nations agreed to task ministers will developing a proposal that would see consumer countries refusing to pay more than a set price for oil imports from Russia.

READ ALSO: Germany and G7 to ‘develop a price cap’ on Russian oil

A gas price cap would likely be carried out on a more national level, with the government regulating how much of their costs energy companies can pass onto consumers. 

Strict contract laws preventing sudden price hikes mean that tenants in Germany are unlikely to feel the full force of the rising gas prices this year

However, the Tenant’s Association pointed out that, if there is a significant reduction in gas imports, the Federal Network Agency could activate an emergency clause known as the price adjustment clause.

This would allow gas suppliers to pass on higher prices to their customers at short notice. 

The Tenants’ Association has warned that the consequences of an immediate market price adjustment, if it happens, should be legally regulated and socially cushioned.

In the case of the price adjustment clause being activated, the government would have to regulate the costs that companies were allowed to pass onto consumers to prevent social upheaval. 

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