This essay was written in conjunction with my master’s program at the University of Macedonia. Learning how dependent the EU is on Russia for its energy needs helped me better understand the International Relationship between Russia and the EU. The key highlights are listed here and the entire paper is below.
Highlights of the European Union’s Energy Dependence on Russia essay:
- Energy has become a key tool in IR statecraft for three main reasons: (a) the increasing energy needs of Asia will shift market power away from the west and towards more realist powers such as China; (b) a more ‘state-centered’ approach to energy policy as displayed by national oil companies (NOCs) controlling 90% of oil and gas worldwide reserves and 75% of output along with making up four out of the top five biggest oil companies; (c) climate change is becoming a major aspect of energy policy as the energy sector is estimated to cause 80% of anthropogenic greenhouse gasses (GHG) (Goldthau and Sitter 2015).
- According to the International Energy Association’s (IEA) 2014 review in 2013 the EU imported 53% of its energy needs making it the largest importer of energy in the world.
- In 2012 Russia was the EU’s biggest supplier of oil, gas, and coal at 33%, 32%, and 26% respectively.
- The majority of the world’s increasing energy demand by 2040 will come from non-OEDC countries and Asia will make up two-thirds of the increase.
- China’s needs will grow by 60% making them the largest energy user in the world.
- Oil price volatility is increasing since 2000. Going from a low of $10 a barrel in 1998 to $147 before the crisis in 2008 then dropping to $33 by the end of 2008 and jumping back up to $100 in 2013 before falling back to $55 in 2015.
- EU energy production is on the decline with natural gas dropping by 30%, crude oil by 56% and coal by 40% since 1995.
- The EU imported nearly 90% of its oil, 60% of its gas and 40% of its coal in 2012.
- Import dependency on fossil fuels is expected to remain high with gas going from 62% in 2010 to 73% in 2030, oil going from 84% to 90% and coal increasing from 39% to 49% by 2030.
- The EU pledged to cut GHG emissions to 40% of 1997 levels by 2030. The EU climate change policies will most likely result in higher demand for cleaner-burning natural gas.
- With the EU’s biggest economy (Germany) eschewing nuclear power, increasing natural gas usage may be the only short-term solution for reaching the EU’s emission targets.
- The main source of energy in the EU is oil, and Russia, who produces 33% of EU oil, was the EU’s most important supplier in 2012.
- The EU has tried to mitigate oil price instability by requiring all member-states to keep a 61-day supply of oil in reserve.
- In 2013 the OECD countries produced 21.9% (EU was 1.8%) of global oil but used just over half (EU used 14.6%).
- 80% of the EU’s oil (13 million barrels per day) arrives via tanker.
- Asian oil imports from the Middle East and Africa are 57% today but will go to 80% by 2035 and the new shale reserves in the US will lower their import demand. Currently, the EU relies on the US to keep key shipping lanes secure, but as US interests shift their willingness to provide that security may change.
- The EU’s demand for gas is projected to go from 532 billion cubic meters (bcm) in 2015 to 619 bcm by 2030 while their supply will drop from 167 bcm to 103 bcm by 2015 leaving a growing gap of 516 bcm.
- Russian gas exports to the EU are expected to increase from 30.8% in 2015 to 38.6 in 2030.
- Gazprom is Russia’s state-controlled gas company and possesses 60% of all Russian reserves along with extracting 94% of domestic production.
- Gazprom accounts for 25% of Russian tax revenues and 8% of GDP.
- From 1985-2007 the EU paid $2 trillion for Russian gas and Russia is projected to receive another $6 trillion from 2008-2030.
University of Macedonia
Department of Balkan, Slavic and Oriental Studies
MA in Politics and Economics of Contemporary Eastern and South-Eastern Europe
Department of Balkan, Slavic and Oriental Studies, University of Macedonia, 156 Egnatia str, 540 06
Thessaloniki, Greece, + 30 (0) 2310 891377
The European Union’s Energy Policy with Russia: a looming unilateral dependence?
Geopolitics and energy seem to go hand in hand in our technology-driven modern world. Daniel Yergin’s renowned book, The Prize: The Epic Quest for Oil, Money, and Power, (2008) is a world history lesson on the role of oil and gas in international relations (IR), but he is far from the only scholar who has articulated the impact energy has had in geopolitics. When considering the European Union (EU) and its energy relationship with Russia we see that Francis Fukuyama’s prophecy about “the end of history” in 1992, was a bit premature. The age-old battle between realism and liberalism in the IR field is on clear display in energy relations between these two world powers.
The EU’s pursuit of a stable and secure energy supply along with Russia’s need for money and respect began in the early years after WWII, but this dance took on a new and heightened dimension after the Ukraine gas cutoffs and supply disruptions in 2006 and 2009. This essay will attempt to highlight the key theories, events, and factors that have impacted the balancing act between the energy policy goals of these two actors with a focus on natural gas and oil. Section 1 will review how the theories of neorealism, neoliberal institutionalism, and institutional balancing can explain current events as well as how the EU’s internal clash between neofunctionalism and intergovernmentalism impact the Russian energy relationship. In section 2 we will quickly highlight the impact of the four eras of international energy relations and how they are impacting the EU/Russian energy balance. Next, section 3 will provide a basic overview of the EU’s overall energy supplies along with the impact its climate change policies could have on the long-term energy needs of the EU. Sections 4 and 5 will examine the policies, regulations, and frameworks the EU has built to deal with Russia in the oil and gas markets respectively. In the last section, this essay will offer some concluding thoughts concerning how interdependent, unilaterally dependent or balanced the EU/Russian energy relationship is.
Neorealism and neoliberal intuitionalism can help us better understand the motives of both the EU and Russia as regards to energy policy. Neorealism is based on the traditional realist statecraft process of a dangerous world with zero-sum outcomes ruled by anarchy requiring states to put self-interest first which leads to the pursuit of power in order to ensure survival. Both realism and neorealism use military and economic means to project power, but neorealism takes into account international institutional structures that allow states to position themselves within those structures in a way to maximize their relative gains through negotiation and cooperation. Additionally, power is treated not as the ultimate goal, but as a tool to help obtain the ultimate goal, namely ─security (Sotiriou 2015).
Neoliberal intuitionalism combines liberalism, neoliberalism, and institutionalism, with the focus being on how cooperation and interdependence take precedence over military force and war. Actors will work together through international organizations to foster free trade and negotiate win-win scenarios where absolute gains increase through both economic and cultural means. The individual is considered the driving force affecting state actions, while shared interests and economic interdependence are the best means to ensure survival (Sotiriou 2015).
In today’s world where war by military means is less acceptable, international institutions are becoming more respected and global trade is fostering increased economic interdependence, neoliberals argue the neorealist time has passed, but while we are hopefully far from a state of anarchy, current events confirm the goodwill of national actors and the power of international organizations to hold states accountable has not yet reached satisfactory levels of stability. While cooperation and interdependence have led to more balance between nations, that equilibrium is never absolute or permanent. Hence, the theory of institutional balancing helps explain how the coexistence of both cooperation and confrontation, can be simultaneously exhibited between Russia and the EU while negotiating agreements within and through international institutions This pro-realist theory posits that military power and its forceful use to achieve security have become a subordinate tactic in today’s IR, while using economic power and cooperating with international institutions, when that cooperation does not sacrifice state sovereignty, is the preferred method to achieve security. Basically, international institutions are primarily used by actors to further their policy goals. Of course, a state always has the option to resort to military means when threatened by competition or crisis, but clearly, this balancing leads to increased interdependence by placing more emphasis on economic (soft) power compared to military (hard) power (Sotiriou 2015).
After almost eight decades and five treaties, the soon to be twenty-seven-member EU organization is essentially a liberal actor focused on projecting power through institutions, policies, and regulations that are based on and reinforce the rule of law. As the EU relies on the liberal tenants of supranational institutional cooperation, the geopolitics of safeguarding energy supplies, production, and transmission (particularly as it relates to Russia), have become more realist (Goldthau and Sitter 2015) (Sotiriou 2015). Energy has become a key tool in IR statecraft for three main reasons; (1) the increasing energy needs of Asia will shift market power away from the west and towards more realist powers such as China, (2) a more ‘state-centered’ approach to energy policy as displayed by national oil companies (NOCs) controlling 90% of oil and gas worldwide reserves and 75% of output along with making up four out of the top five biggest oil companies; (3) climate change is becoming a major aspect of energy policy as the energy sector is estimated to cause 80% of anthropogenic greenhouse gasses (GHG) (Goldthau and Sitter 2015).
While the EU acts as a liberal regulatory state relying on legislation and rules Russia has become more assertive by supporting national monopolies, pursuing market-based pricing and avoided any ‘legally binding’ cooperation that could jeopardize state sovereignty, all in an effort to maximize its relative gains (Sotiriou 2015). Furthermore, we will see how Russia has used the struggle between neofunctionalism and intergovernmentalism within the EU to advance its energy network throughout Europe. Intergovernmentalism (realism family) advocates for cooperation between national governments without a loss of state sovereignty and sees decision making from a zero-sum perspective, whereas neofunctionalism or supranationalism (liberalism family) promotes creating agreements and new institutions led by technocrats that supersede state sovereignty in win-win scenarios (Hix and Hoyland 2011). Additionally, the EU assigns responsibilities for different competencies as exclusive, shared or supportive and the energy policy is a shared competency, meaning both the EU commission and member-states are responsible for designing EU energy policy. This is primarily done through either the competition or foreign policy spheres. When energy policy is seen as part of the Single European Market (SEM) it falls within the competition policy sphere where the Commission and EU Court settle disagreement and forge consensus i.e. the community method. Conversely, when energy policy falls within the foreign policy sphere from member-states securing energy mixes, sources, or supplies the EU (supranational organization) is prohibited from limiting the state’s choices (Sotiriou 2015).
The interplay of this dynamic can best be explained by using Andrew Moravcsik’s liberal intergovernmentalism theory which suggests two stages in state decision making with the first being domestic preferences formed by individuals and interest groups while the second deals with how they achieve those preferences when bargaining/cooperating with other states in international institutions. This follows the ‘bottom-up’ approach and has allowed Russia to use its energy supplies to influence member state preferences with a goal of impacting overall EU energy policy (Sotiriou 2015). Russia’s ability to exploit this process stems from the muddled way the EU develops a common energy policy as evidenced by the fact that ten EU Commission Director-Generals (DG) have regulatory supervision over some aspect of EU energy policy (IEA 2014) (EU Commission 2018). Additionally, despite the enlargement to 28 members and the addition of qualified majority voting (QMV) the EU has a penchant for compromise within the Commission, Council, and Parliament. Important decisions are rarely taken against the interests of a member state and when the need arises to go against a member state wishes other compromises or concessions are granted to assuage their loss (Goldthau and Sitter 2015). This is particularly true when it comes to sensitive national interests such as energy (Sotiriou 2015).
Goldthau and Sitter (2015) propose that there have been three chief eras in the international energy economy each with its own governance pattern and we are currently entering into the fourth. (1) Seven Sisters ─ beginning in 1928 and dominated by seven private International Oil Companies (IOCs) who were backed by their Western governments. They set production goals and controlled not only 85% of the world’s oil market but also most upstream reserves, which allowed the Western governments to project their power right up until the 1970s; (2) rise of the Organization of the Petroleum Exporting Countries (OPEC) ─ took back control of their reserves and shifted control from IOCs to National Oil Companies (NOCs) as well as establishing production quotas that effectively determined global oil prices until the 1986; (3) the liberal era started when OPEC could no longer control its members production levels and crashing oil prices toppled the vertical structure of the oil industry shifting price control back towards consumers. While an evolving oil market that relied on spot price trading along with the breakup of the Soviet Union and new suppliers entering the market caused the existing IOCs to merge into “supermajors” increasing the influence of Western powers in energy geopolitics (Goldthau and Sitter 2015).
The authors go on to point out a new era is currently underway related to rapidly increasing energy needs of Asia, oil price volatility and the need for clean-burning gas because of climate change pressures. The majority of the world’s increasing energy demand by 2040 will come from non-OEDC countries and Asia will make up two-thirds of the increase. China’s needs will grow by 60% making them the largest energy user in the world. While both Asia and the OECD countries need for gas will increase by 2040, China’s increase will be the fastest, putting pressure on prices as OECD countries seek to lower GHG emission by using more natural gas. They propose the era of energy “securitization” has begun with countries rapidly scrambling to ensure their long-term energy needs by developing national energy strategies that promote state ownership of reserves, production companies and distribution means. This has increased volatility of oil prices as evidenced by the huge market swings since 2000. Going from a low of $10 a barrel in 1998 to $147 before the crisis in 2008 then dropping to $33 by the end of 2008 and jumping back up to $100 in 2013 before falling back to $55 in 2015. This uncertainty has caused havoc in both developed and developing countries across the globe triggering many emerging economies to subsidize energy to a tune of $544 billion in 2012. Clearly, the free market era is over, and the state has gotten back into the energy business (Goldthau and Sitter 2015).
According to the International Energy Association’s (IEA) 2014 review in 2013 the EU imported 53% of its energy needs making it the largest importer of energy in the world. Oil accounted for 32% of the EU’s total primary energy supply (TPES) in 2012 with natural gas taking a 23.9% share, while another 17.5% is made up from coal, 12.5% from nuclear and renewable energy comes in with an increasing 12.1% share. Combined these five energies explain 98% of the EU’s TPES. Predictably, industry is the chief consumer of EU energy resources with 31.8% of total final consumption (TFC) in 2012. The transport and the residential sectors account for 26.9% and 25.4%, respectively with the remaining 15.9% used by commercial businesses, government and agriculture (IEA 2014).
EU energy production is on the decline with natural gas dropping by 30%, crude oil by 56% and coal by 40% since 1995, but the one bright spot has been renewable energy production which experienced a 9% increase from 2010-2012 accounting for a 21.7% share of primary energy production in 2013. The EU imported nearly 90% of its oil, 60% of its gas and 40% of its coal in 2012 (EU Commission 2014). Import dependency on fossil fuels is expected to remain high with gas going from 62% in 2010 to 73% in 2030, oil going from 84% to 90% and coal increasing from 39% to 49% by 2030 (EU Commission 2014). Furthermore, fossil fuels make up only 45.8% of the EU electrical generation which is much less than the global average (Bluszcz 2016). When examining Russian energy imports we see that in 2012 Russia supplied the biggest share of oil, gas, and coal to the EU at 33%, 32%, and 26% respectively, while they were tied with Canada as the second largest supplier of uranium at 18%, and behind Kazakhstan at 21% (EU Commission 2014)
As already mentioned, the energy sector is the source for 80% of global GHG emissions and while the US and China may not be cooperating with efforts to slow global warming the EU is leading the charge by pledging to cut GHG emissions to 40% of 1997 levels by 2030, which is estimated to cost €38 billion (EU Commission 2014). Lower emissions will require using more renewable energy and less fossil fuels. Even though the EU has made stellar progress toward renewable energy it will not be enough to reach the emission goals alone. The EU climate change policies will most likely result in higher demand for cleaner-burning natural gas. Battling climate change has been a “top-down” approach by EU regulators and with their biggest economy (Germany) eschewing nuclear power, increasing natural gas usage may be the only short-term solution for reaching the EU’s emission reduction targets (Goldthau and Sitter 2015) (Sotiriou 2015)
The main source of energy in the EU is oil, and Russia, who produces 33% of EU oil, was the EU’s most important supplier in 2012 (Norway is a distant second at 11%) (EU Commission 2014) As mentioned in section two, the liberal energy era and spot pricing changed the global oil market. The ability to easily ship oil anywhere in the world and the exchanges in New York and London have made oil fungible as an internationally traded commodity (Sotiriou 2015).
Goldthau and Sitter (2015) outline four developments that have contributed to price volatility and are poised to destabilize EU oil supplies. First, the increasing shift to NCOs mentioned in section one means important data on global production and supplies is unavailable, leading to informational asymmetry. Even though the EU requires member-states to report usage and supply data their ability to obtain this data externally is lacking making the cyclical boom and bust price swings mentioned in section two even harder to prepare for. Secondly, price swings can also be caused by political crisis, labor strikes in the energy sector, conflicts or even new oil reserves (Sotiriou 2015). The EU has tried to mitigate these uncertainties by requiring all member states to keep a 61 day supply of oil in reserve (Goldthau and Sitter 2015). Thirdly, EU influence in the global oil market is shifting back towards the producer monopiles like OPEC. In 2013 the OECD countries produced 21.9% (EU was 1.8%) of global oil but used just over half (EU used 14.6%). As the EU becomes less of a market force their ability to shape the rules will decrease. Fourth, trade flows from the Atlantic to the Pacific will increase the likelihood of external disruptions and affect prices in the EU where 80% of its 13 million barrels per day arrives via tanker. Asian oil imports from the Middle East and Africa are 57% today but will go to 80% by 2035 and the US new shale reserves will lower their import demand. Currently, the EU relies on the US to keep key shipping lanes secure, but as US interests shift their willingness to provide that security may change (Goldthau and Sitter 2015).
Despite Russia and China’s state-owned energy strategy and the overall way Japan, the OPEC producers, and even the US use oil as a geopolitical tool, the EU continues to conduct themselves as a liberal actor and insist that oil is only a commodity that should be traded in a regulated market. Their main approach is to attempt to manage risk and to build up reserves to protect against future oil shocks. While the EU passes new rules and collects information, Russia and the rest of the world pursue a neorealist approach to energy policy (Goldthau and Sitter 2015).
Both Goldthau and Sitter (2015), as well as, Sotiriou (2015) point out that unlike oil, which is traded globally at a known price, gas is a regional commodity needing a large pipeline infrastructure that only allows trade in the three major markets of Europe, Asia, and North America. Since it is not fungible and cannot be shipped globally, gas requires a long-term relationship between producer and consumer. These relationships are typically set up on a project basis utilizing long-term contracts (LTCs) allowing investors to recoup the high costs of construction, while consumers sign “take or pay” contracts, which require them to buy a set amount of gas regardless of actual use (Goldthau and Sitter 2015) (Sotiriou 2015). Sotiriou (2015) adds that for these reasons, the trading of natural gas is much more able to be used as a geopolitical tool to advance a nation’s interests ─ particularly if the balance or interdependence between the producer and consumer are unequal. For example, if the producer (who has gas) has other markets that want the gas it can drive a harder bargain with the consumer (leaving the consumer vulnerable and “unilaterally dependent” to the producer), whereas the consumer (who has money) could demand more favorable terms if they have more than one supplier (leaving the producer vulnerable and “unilaterally dependent” on the consumer), but if they can only trade with each other then there is an interdependence or balance that should keep prices fair and supplies steady (Sotiriou 2015, p. 59-60).
Using the criteria above we will see that Russia’s actions and the EU response since the Ukraine shutoff in 2006 have weakened the interdependent relationship both have enjoyed as trading partners. Russia’s energy strategy with the EU has been executed with a long-term view in mind, while always focusing on the relative gains any cooperation would provide them. There are three key actions that have opened cracks in the interdependent relationship that began in the 1980s (Sotiriou 2015). They include: (1) penetrating the downstream business in the key EU countries of Germany, France, Italy and Poland, which strengthened ties with those member-states and stifled the EU’s ability to enforce supranational regulations ; (2) developing a new market in Asia and an important trading partner in China, which will cause the EU to compete against China for much-needed energy supplies; (3) and obstructing any significant Western development of the energy reserves in the Caspian Sea region (Sotiriou 2015).
Russia has been able to take those actions because they are the biggest gas exporter to the EU. In fact, the EU’s demand for gas is projected to go from 532 billion cubic meters (bcm) in 2015 to 619 bcm by 2030 while their supply will drop from 167 bcm to 103 bcm by 2015 leaving a growing gap of 516 bcm, with Russian gas exports to the EU increasing from 30.8% in 2015 to 38.6 in 2030 (Sotiriou 2015). Other gas suppliers are Norway at 31%, Algeria at 14% and Qatar at 8% which imports all its gas as liquefied natural gas (LNG) (EU Commission 2014).
While those numbers make the relationship appear one-sided, the technical expertise and money Russia receives from the EU keeps the relationship balanced. Gazprom is Russia’s state-controlled gas company and possesses 60% of all Russian reserves along with extracting 94% of domestic production (Sotiriou 2015). Additionally, Gazprom accounts for 25% of Russian tax revenues and 8% of GDP. In 2008 Russia shipped 27% of its gas supply to the EU and Turkey keeping 54% for domestic use and 13% went to the former Soviet states. From 1985-2007 the EU paid $2 trillion for Russian gas and Russia is projected to receive another $6 trillion from 2008-2030 (Sotiriou 2015)
As Russia was following a neorealist approach focused on improving relative gains in this bilateral interdependent relationship, the EU, despite concerns about the growing dependency on Russia gas, continued to act as a liberal regulatory state (Goldthau and Sitter 2015). Using the Energy Charter Treaty, Partnership Cooperation Agreements, and Energy Dialogs that created loosely binding arrangements with Russia, they futilely attempted to change the relative gains outcomes before adopting the more stringent Third Energy Package (Sotiriou 2015). This policy was designed to limit Gazprom’s penetration into downstream member-state distribution networks and open up Gazprom’s pipelines to third-party access, but in the end the business relationship Gazprom had formed with member state energy companies kept this policy from being fully enforced as member states (focused on supply security) within the council used their leverage to give exemptions to Gazprom on some of the most onerous provisions (Sotiriou 2015).
Focusing mostly on the gas market we can see the EU’s need for security of supply and Russia’s need of security of demand kept their relationship interdependent, but as Russia improved its dominant supplier position by seeking new customers (China) and deepening relations with member-states, the EU sought to diversify its supplies and limit Russia’s influence through regulation. Russia took a long-term approach by giving up short-term upstream sector ownership to receive technical expertise and investments while gaining long-term ownership in midstream and downstream member-state sectors, which nullified the supranational regulations put in place by EU institutions and steadily increased Russia’s relative gains. Through take and pay LTCs Russia locked in security of demand and provided the EU member-states with security of supply, but actively pursued the new Asia market while obstructing EU efforts to open the Caspian Sea reserves to the EU markets.
The strategic horizon of the EU/Russian energy relationship appears to be poised to change from one of interdependence to one where the EU becomes unilaterally dependent mostly because of the gas market. Global factors such as the growth of Asian energy needs, rise of statism in the energy sector and NCOs controlling a larger share of both reserves and production, as well as climate change, are working against the neoliberal institutionalism approach of the EU. With the EU supply gap projected to grow, as Russia’s reserve fields develop, and distribution network stabilizes, Russia’s neorealist approach of institutional balancing by paying EU institutions lip service while strengthening commercial ties with member-state energy companies, as well as, developing a new distribution network to Asia should move Russia into a more dominant position vis-à-vis the EU over the next fifteen years.
Bluszcz, Anna. “European economies in terms of energy dependence.” Gliwice: Springerlink.com, May 5, 2016.
EU Commission. EU Commission. 2018. https://ec.europa.eu/commission/priorities/energy-union-and-climate_en#related-links (accessed May 22, 2018).
EU Commission. “In-depth study of European Energy Security.” Communication Staff Working Document. Brussels: EU Commission, July 2, 2014.
Goldthau, Andreas, and Nick Sitter. A Liberal Actor in a Realist World: the European Union regulatory state and the global political economy of energy. Oxford: Oxford University Press, 2015.
Hix, Simon, and Bjorn Hoyland. The Political System of the European Union. Houndmills England: Palgrave Macmillian, 2011.
IEA. Energy Policies of IEA Countries European Union 2014 Review. Annual, Paris: International Energy Agency, 2014.
Sotiriou, Stylianos A. Russian Energy Strategy in the European Union, the Former Soviet Union Region and China. Lanham: Lexington Books, 2015.
 Article 194 of the Lisbon Treaty, states, “[these] measures shall not affect a Members State’s right to determine the conditions for exploiting its energy resources, its choice between different energy sources and the general structure of its energy supply” (Goldthau and Sitter 2015, p. 41)
 They include DG Energy, DG Climate Action, DG Environment and DG Mobility & Transit DG Competition DG Trade DG Taxation and Customs Union DG Enterprise and Industry DG Research and Innovation DG Joint Research Centre (IEA 2014) (EU Commission 2018).
 The EU has been increasing subsidies too, reaching $70 billion in 2013 (IEA 2014).
 Nearly 90% of oil is imported and it is almost exclusively used for transport accounting for 95% of transport fuel (EU Commission 2014)
 Once Brexit concludes these numbers will fall even further as the UK accounted for 26% and 61% of EU gas and oil production in 2012 (EU Commission 2014).
 Hydropower accounted for 46% of all EU renewable energy.in 2012 (EU Commission 2014).
 LNG comes from either North Africa or the Middle East existing gas supplies and accounts for only 15% of the market, and it is not considered to play a significant part in the long-term diversification of EU gas supplies (Sotiriou 2015). Additionally, in 2012 only 25% of EU LGN storage capacity was used as prices were much cheaper for regular gas (EU Commission 2014).