EU to end LPG import exemption with new sanctions: Polish energy minister

The EU's 19th sanctions package could close a policy loophole that has allowed countries to continue importing cheap Russian liquefied petroleum gas components, according to Poland's energy minister.

A Sept. 25 statement from Polish minister Milosz Motyk revealed that the EU's new sanctions proposal, currently under discussion among member states, includes a new ban on Russian butane types that have so far stayed untouched by successive energy restrictions.

Yet as the bloc has sought to shut remaining Russian energy flows changing hands within the region, new measures include a proposed ban on n-butane. The move follows a campaign from the Polish energy ministry to combat a spike in its Russian imports from December 2024, the minister said.

"Today, we are calling for an end to this practice," he wrote in his statement, urging for an end to all trade of LPG components from Russia and Belarus.

Polish butane imports surged after December 2024, partly as an unintended consequence of EU regulations. Under its 12th sanctions package, the EU imposed blanket sanctions on propane, another LPG component, while exempting butane and isobutane.

The propane sanctions, phased in from 2023, led to a reshuffling of trade flows, supporting imports from rival suppliers in northwest Europe while boosting butane demand.

According to trader sources, who were not authorized to speak publicly, around 30,000 to 34,000 metric tons of Russian butane entered Poland monthly by rail or truck through 2025, typically via the Belarus border.

In a June statement, Polish refiner Orlen estimated that just 35% of all Polish LPG is imported through its marine terminals, keeping the land-based deliveries a significant channel for product entry into the country.

The majority of butane arrivals -- consisting mainly of n-butane and isobutane -- are directed toward the petrochemical sector, often transiting into Hungary and other regional markets. However, wide discounts for Russian supply over volumes from the Amsterdam-Rotterdam-Antwerp hub or Scandinavia have encouraged buyers to also blend growing volumes into autogas used in the transport sector.

The shift in market practices has sparked backlash among Polish LPG suppliers, with critics lobbying against the unsustainable pressure on domestic prices.

Polish customs officers have responded with tougher controls on LPG inflows at the Belarusian border in recent months. Through September, a temporary closure of the border between Warsaw and Belarus has also choked flows.

If enacted, a butane ban could exacerbate existing shortages in Northwest Europe, which has struggled with unseasonably tight supplies through the summer months.

High natural gas prices have strengthened the demand for butane as a substitute fuel for power generation, while the seasonal switch in the gasoline market to winter-grade specifications has elevated butane blending demand and made Russian products more attractive.

The proposed EU sanctions follow pressure from senior officials and US President Donald Trump to ramp up pressure on the Russian economy, and include a faster LNG phaseout, tougher measures on foreign refiners and company-specific transaction bans. To reach final approval, the measures require unanimous agreement from the bloc's 27 member countries.

Platts, part of S&P Global Energy, assessed the benchmark butane FOB NWE coaster prices firmly over 80% as a proportion to naphtha in June, July and August. The Butane FOB NWE large cargoes were assessed at $493/mt Sept. 26, up from $458/mt the previous week.