19.05.202211:30 Forex Analysis & Reviews: EU shift away from Russian oil and gas to cost $220bn

The European Union's plan to reduce imports of Russian oil, gas and coal to zero by 2027 would cost it around $220 billion (€210 billion).

The three pillars of the plan include switching to other oil and gas suppliers, expanding wind and solar generation capacity, and reducing energy consumption, the document showed.

The money, according to plans, will come from the EU's Covid-19 recovery fund, which is already bound to renewable energy commitments by member states. Ultimately, the plan suggests, the additional investment would reduce its oil and gas import bill.News of plans to eliminate Russian oil and gas imports emerged earlier this month when the Financial Times reported, citing earlier draft plans, that the EU will have to spend some $205 billion (€195 billion) until 2027 to effect this shift way from Russian hydrocarbons, on top of the already-agreed spending on carbon emission reductions.

According to the Financial Times report, the plan is aimed at "rapidly reducing our dependence on Russian fossil fuels by fast-forwarding the clean transition and joining forces to achieve a more resilient power system and a true Energy Union."

As part of these efforts, the European Union is accelerating the installation of wind and solar capacity, seeking to have 45% of its electricity come from renewable sources by 2030. This is an upward revision of earlier plans for 40% of electricity to be generated by wind and solar.

The bloc seeks to lower its gas consumption by a third by 2030, replacing it with both renewables and hydrogen.

The European Union also eyes a reduction in energy consumption across the block by as much as 13 % versus earlier plans for a 9% cut in consumption.