Further to our 22 October 2025 client alert on the Council of the European Union’s General Approach to the proposed Regulation phasing out Russian gas imports, the European Parliament and Council have now reached a provisional political agreement that significantly accelerates and strengthens several elements of the original proposal.
The political agreement confirms that the EU will permanently end all imports of Russian natural gas, both LNG and pipeline gas, under an earlier and more prescriptive timetable than set out in the Council text summarised in our October alert.
Accelerated LNG phase-out
Under the new agreement, Russian LNG imports will be phased out by 31 December 2026, with short-term LNG contracts ending on 25 April 2026 and long-term LNG contracts ending on 1 January 2027. This aligns with the measures adopted under the EU’s 19th sanctions package. By contrast, the Council’s General Approach had permitted long-term LNG imports to continue until 1 January 2028.
Pipeline gas deadline brought forward
Pipeline gas will be prohibited from 30 September 2027, with an exceptional extension to 31 October 2027 where a Member State is unable to meet gas-storage requirements. Short-term pipeline contracts concluded before 17 June 2025 will end on 17 June 2026. These dates bring forward the long-term pipeline deadline previously set for 1 January 2028 in the Council’s General Approach.
Stricter limitations on contract amendments
The agreement introduces stricter limitations on contract amendments, which are now permitted only for narrowly defined operational reasons and must not result in increased volumes or prices. The Council text had permitted amendments to reduce volumes or prices or to make necessary procedural adjustments required by law; the political agreement narrows the scope of permissible amendments further.
Enhanced anti-circumvention measures
The co-legislators have incorporated enhanced anti-circumvention measures, including strengthened transparency requirements, tighter monitoring of origin declarations, and expanded cooperation between customs authorities, national regulators, the European Commission, the European Union Agency for the Cooperation of Energy Regulators (ACER), OLAF, and the European Public Prosecutor’s Office.
Penalties and enforcement provisions
The political agreement also introduces a significantly strengthened enforcement regime reflecting one of the European Parliament’s core priorities. According to certain media reports of the provisional agreement, Member States will be required to impose stringent penalties for non-compliance with the gas-import ban, with national authorities able to choose between: (i) a fine of €40 million (reported in some outlets as a fixed amount and in others as a minimum threshold), (ii) a fine equal to 3.5% of the undertaking’s annual turnover, or (iii) a penalty of 300% of the value of the unlawful transaction. These figures do not appear in either the Council’s or Commission’s press releases, and have not yet been reflected in any published legislative text, so the precise penalty provisions will need to be confirmed once the final text is released in the Official Journal of the European Union.
Prior authorisation during the transition period
As in the original proposal, imports during the transition period will require prior authorisation, supported by detailed contractual disclosures to ensure that volumes are restricted to historical quantities under qualifying contracts. While the political agreement does not revive the Commission’s earlier proposal to prohibit the provision of LNG-terminal services to Russian entities (contained in Articles 5, 6, and 8 of the June 2025 proposal, which the Council had deleted), the reinforced origin-tracking and authorisation system will in practice further limit the handling of Russian LNG at EU terminals.
National diversification plans
Member States will be required to submit national gas and oil diversification plans by 1 March 2026, setting out how remaining Russian-linked supply will be replaced. The Commission will assess these plans and issue recommendations within three months, monitoring progress together with ACER.
Russian oil phase-out to follow
The Commission has reiterated that it will table a legislative proposal to phase out all remaining Russian oil imports by the end of 2027, complementing the gas phase-out framework and the EU’s existing oil embargo.
Next steps
The text of the Regulation will now be finalised and translated into all EU languages before formal adoption by both institutions. Adoption in the Council will require a qualified majority. Following formal adoption, the text will be published in the Official Journal.
Client Alert 2025-296
