German target of reducing dependency on Russian gas unlikely: Moody's
Germany's target of reducing its dependency on Russian gas to 10% by 2024 seems ambitious but unlikely, according to Moody's.
The embargo on Russian coal and a far-reaching halt to oil deliveries has led many EU countries to ask whether a ban on natural gas imports should be rejected by the bloc. Several member states are reluctant to make the decision to suddenly stop importing Russia's natural gas. This includes Germany and Italy who say they are too reliant on gas to cope with a sudden stop of supplies.
In a report published by the rating agency Moody's, "Germany's reliance on Russian gas imports has already been halved to around 30% of imports now from around 60% in 2020 and further diversification of sources is underway, for instance through increased purchases of liquefied natural gas (LNG). However, the government's goal of reducing its reliance on Russian gas to 10% by 2024 appears ambitious".
Read more: Countries still buying Russian fossil fuel
Italy, on the other hand, is better equipped to deal with the energy crisis due to the existing pipelines to North Africa and liquefied gas terminals (LNG). Hence, the country could fully replace the Russian gas supplies by 2025.
Italy has cut its reliance on Russian gas imports to 25%, from about 40% at the start of the year, whereas Germany - the largest European economy - still imports roughly 35% of its gas needs from Russia.
The Ukraine war is causing major dilemmas to European nations as they are now entering into an energy crisis, and the sanctions against Moscow may result in the suspension of Russian gas supplies to the EU.
Read more: Russia's oil exports rise despite sanctions