Get the latest updates as we post them — right on your browser

. Last Updated: 07/27/2016

EU, Russia Urge Less Energy Use

Russia and the European Union on Friday backed energy-efficiency measures to save more than 400 million tons of oil equivalent each year by 2020 -- similar to adding two more Irans to world oil supply.

But the meeting in Moscow of Industry and Energy Minister Viktor Khristenko, EU Energy Commissioner Andris Piebalgs and Finland's Trade Minister Mauri Pekkarinen recognized that there was a "huge mutual challenge" as well as potential.

A report by a joint EU-Russian energy-efficiency working group has said Russia could halve the energy intensity of its economy by 2020 via energy-saving programs and by cutting down on gas flaring and on wastage and losses in industry.

Pekkarinen said the meeting had prepared the ground for a better understanding of what could be incorporated in the energy part of an eventual EU-Russia agreement.

"Energy efficiency is clearly the key priority in our future cooperation," he said. "Russia is the EU's most important energy supplier. We are mutually interdependent. We agreed on the need to develop mutual confidence and openness."

Energy is at the heart of EU-Russian diplomacy, with Russian producers relying on European demand as much as European consumers depend on continuing supplies from Russia, which has been the world's top oil producer in recent months.

But domestic industry, much of it born under an inefficient Soviet economy that did little to ration energy use, is among the most inefficient in the world.

Figures from the International Energy Agency show the country uses about 10 times more energy to produce $1 of gross domestic product than the average in the Organization for Economic Co-operation and Development's industrialized countries.

Improving efficiency could free up more energy for export, increasing both revenues to Russia and supplies for the stretched world market, which has seen record-high oil prices in the past year.