backIn draft legislation published on 17 June 2025, the European Commission (the “Commission”) has proposed a ban on imports of Russian pipeline gas and LNG into the EU under both new and existing contracts from 1 January 2026 and 1 January 2028, respectively (the “Proposal”). Recognising that this amounts to a retroactive ban on existing supply commitments, the Commission has suggested that EU importers could use “force majeure” provisions to terminate their contracts without facing claims for breach of contract. However, the practical consequences of parties taking such an approach are unlikely to be as simple or clear-cut from a legal perspective as the Commission appears to have assumed and the reactions from contractual counterparties are uncertain. The Proposal therefore poses significant legal risks and complexities for gas suppliers and importers, which could lead to contractual disputes.
Key Elements of the Proposal
The Proposal forms part of the Commission’s broader “REPowerEU roadmap” initiative, which was first launched in response to Russia’s invasion of Ukraine in February 2022 (“REPowerEU”)1https://energy.ec.europa.eu/strategy/repowereu-roadmap_en#:~:text=Therefore%2C%20on%206%20May%202025%2C%20the%20Commission%20presented,of%20Russian%20gas%2C%20oil%20and%20nuclear%20energy%20imports.. Through REPowerEU, the Commission aims to end Europe’s dependency on Russian energy by enhancing energy efficiency and accelerating the deployment of renewable alternatives and diversifying supplies. However, in 2024, the EU still imported 52 billion cubic meters (“bcm”) of Russian gas (of 273 bcm total EU imported gas); and expects to import a further 36.5 bcm in 2025.2https://ec.europa.eu/eurostat/statistics-explained/index.php?title=Natural_gas_supply_statistics The Proposal therefore represents a renewed attempt by the EU to meet this policy objective.
The key features of the Proposal are:
- A ban on imports of Russian gas (pipeline gas and LNG) from 1 January 2026 (for “new” contracts) and from 1 January 2028 (for “existing” contracts). The Proposal defines “new” contracts as contracts that are concluded or amended after 17 June 2025 (i.e., the publication date of the Proposal) and “existing” contracts as contracts concluded prior to that date and not subsequently amended. This means that imports under existing, long-term contracts would be in contravention of the law from 1 January 2028 (if that date survives into the final legislative text).
- Any volume adjustments under existing contracts will be subject to the ban as though those volumes were “new” contracts. The Proposal makes no distinction between contract volume adjustments pursuant to mandatory or optional contractual mechanisms: both are excluded from the volumes benefitting from the extension of the ban until 1 January 2028. This includes volume adjustments using existing contractual flexibilities: e.g., make-up volumes, meaning that any volumes imported pursuant to such a mechanism will be considered as “new” volumes and so subject to the immediate (1 January 2026) import ban. Implementing this very broad restriction for specific contractual arrangements will raise questions of interpretation and application in each particular case and (given the prevalence of these provisions) is likely to be relevant to almost all import contracts. This will create complexities for importers – for example in managing their portfolios and/or onward volume commitments – potentially leading to disputes and issues complying with the import ban if suppliers have the contractual right to enforce volume flexibilities (e.g., to cure supply shortfalls from previous contract years or upward quantity tolerances exercisable by suppliers).
- A ban on providing long-term LNG terminal services to Russian entities. The Proposal defines “long-term LNG terminal services” as services provided by LNG system operators, in particular offloading, storage, sending out, berthing (loading and unloading), regasification, backhaul liquefaction, truck loading, bunkering of LNG, and including ancillary services and temporary storage necessary for the re-gasification process and subsequent delivery to the transmission system, for a duration of greater than one year.
- Increased reporting and transparency obligations for importers. The Proposal would introduce a new transparency and monitoring framework requiring importers of Russian natural gas to provide details of contractual relationships, save for price information, to the Commission and national competent authorities. The Proposal anticipates that importers will disclose extensive information regarding commercial contracts in order to evidence the origin of imported gas. This includes, for example, disclosure of contracted volumes and also identifying the producer of the gas, country of production and (for LNG) port of first loading. These transparency requirements could pose implementation challenges. First, because of potential confidentiality concerns (importers are likely to be subject to confidentiality restrictions under their contracts, breaching which without counterparty consent could raise legal risks). Second, because this level of traceability of (in particular) the specific “producer” of gas is not always straightforward given the complexity of some natural gas upstream and midstream supply chains. Similar issues are posed by another EU regulation aimed at increasing the transparency of fossil fuel supply chains: the EU’s Methane Regulation.3Regulation (EU) 2024/1787 of the European Parliament and of the Council of 13 June 2024 on the reduction of methane emissions in the energy sector and amending Regulation (EU) 2019/942 (Text with EEA relevance)
- Member States must develop national diversification plans with concrete actions and timelines to assist the phase-out of Russian gas imports, which should be submitted to the Commission by 1 March 2026. The Commission may authorise Member States to suspend the application of the provisions on prohibition of imports of Russian fossil fuel imports, in the event of sudden and significant developments that seriously threaten the security of energy supply in one or more Member States. Such derogation would be specifically targeted to address the threat to the security of supply.
- The Member State diversification plans must achieve a total end to imports of Russian oil, including by those Member States benefiting from derogations to existing EU sanctions on Russian oil imports, also by 1 January 2028.
- Finally, the Proposal also contemplates that the Commission will later present a separate legislative proposal in relation to nuclear energy. This will aim to replace Russian nuclear fuels with alternative EU suppliers and reduce dependencies on Russian-designed nuclear reactor technologies.
The key dates for each different aspect of the Proposal are summarised in the following table.
Potential Impacts: Alternative Gas Supply Sources and Gas Prices
Particularly in the context of the EU’s commitment to import more energy products from the U.S., the Proposal could drive greater demand for imports of LNG into Europe from the U.S. and other key supply sources (such as Qatar).4https://ec.europa.eu/commission/presscorner/api/files/document/print/en/qanda_25_1935/QANDA_25_1935_EN.pdf However, LNG can be more expensive than piped gas and entails also more upstream and downstream infrastructure development. The capacity of existing LNG infrastructure may also need to be expanded to accommodate these anticipated greater volumes. These shifts in the dynamics of the EU gas market could cause unpredictability and potentially lead to increases in gas costs for EU buyers, although it is early to anticipate how exactly this is likely to play out.
When publishing the Proposal, the Commission announced that in 2025, global LNG supplies are foreseen to grow rapidly, while gas demand will decrease. Specifically, the Commission expects that the EU will reduce consumption of gas by up to 100 bcm of natural gas by 2030, resulting in a decrease in demand by 40-50 bcm by 2027, while expecting LNG capacity to increase by around 200 bcm by 2028. The Commission expects the reduction in consumption to arise from increased energy efficiency and replacement of gas with other renewable and low-carbon energy sources. However, whether or not the EU successfully reduces gas consumption and correspondingly scales-up production and demand for renewable and low-carbon energy alternatives remains to be seen.
The Potential for Disputes
As the Proposal intends to phase-out existing short-term contracts by 17 June 2026, and long-term contracts by 1 January 2028, parties to contractual arrangements will need to review their rights under existing agreements and consider termination, in order to comply with these requirements. The Commission expects companies to use force majeure provisions in their contracts to facilitate termination. However, this could be a complex and contentious process giving rise to significant potential for disputes. One challenge inherent in the design of the Proposal, is that it does not contemplate that supply contracts will often only allow termination for force majeure events when an affected party can demonstrate that the effects of the relevant event(s) are prolonged: i.e., have continued for a duration defined in the contract. A typical example is of a requirement for the relevant force majeure event or circumstance to prolong to the extent that it “materially… undermine[s] the commercial adventure”.5NKD Maritime Ltd v Bart Maritime (No 2) Inc [2022] EWHC 1615 (Comm) (para 89)This can range from anywhere between several months to several years. One interpretation of the Proposal, is that the potential “force majeure event” that an importer would be seeking to rely on to justify termination of a long-term, existing contract, would only arise on 1 January 2028 (when the restriction takes effect). Parties may argue that this would start the clock under the relevant contract from that date and termination would, in theory, be possible (subject to all the normal challenges and considerations with claiming force majeure) after the expiry of the relevant time-period to show that the effects of the force majeure event were prolonged. During this intervening period, however that is defined by the parties, importers would have to cease importing volumes (attempting to rely on force majeure relief to do so) or else be in contravention of the law. This would expose those parties, however, to potential counterclaims for breach of contract from their suppliers for failure to offtake agreed volumes.
Therefore, as parties seek to adhere to the new laws and enforce their rights to terminate by claiming force majeure, frustration and/or supervening illegality (or other similar legal theories under civil law), they also risk the other party challenging the validity of termination and potentially bringing a claim for (inter alia) breach of contract.
However, as alluded to, the process will not be straight-forward. It is not unusual to see force majeure applied narrowly under English law (for example). In comparison the French courts, which allow for a statutory force majeure clause assessed on its merits in each case by the judge, may apply force majeure somewhat more broadly. Whichever the approach, each case will turn on its facts and be applied within the context of the particular contract, the relationship of the parties, the alternative options available and various commercial considerations.
Next Steps
The Proposal is currently going through the EU legislative process and is being negotiated by the EU Parliament and Council. The contents of the Proposal can change during this negotiation process, including in response to new geopolitical developments. For example, on 19 September 2025, the Commission announced its proposal of the EU’s 19th sanctions package against Russia, which proposes a full prohibition on the purchase, import, or transport of Russian LNG from 1 January 2027, i.e., a year earlier than contemplated under the Proposal.6https://www.eeas.europa.eu/eeas/russia-statement-high-representativevice-president-kaja-kallas-19th-package-sanctions_en. This creates added uncertainty for parties. Given that the import restrictions are intended to apply as early as 1 January 2026, there is limited time for the EU institutions to complete these negotiations and equally little time for parties to prepare.