Merz chases 20 billion cubic meter gas target

Friedrich Merz, Germany's chancellor, hosted Azerbaijan's president Ilham Aliyev in Berlin this week to discuss deeper energy and trade ties (Euronews). The meeting was diplomatic courtesy wrapped around a harder question: how much of Europe's effort to quit Russian gas depends on a supplier whose politics complicate Berlin's own democratic messaging?

A Pledge, Not a Contract

Germany is not discovering Azerbaijan. It is joining a gas system that Italy, Greece and Bulgaria have used for years. The foundation is the July 2022 EU-Azerbaijan memorandum, in which the European Commission (the EU's executive arm) pledged to support expanding Azerbaijani gas deliveries to at least 20 billion cubic metres per year by 2027 (European Commission). That document is a political signal, not EU law or a purchase order. The binding commitments sit in separate commercial deals between companies.

The physical route works. Azerbaijani gas travels through three linked pipelines across the Caucasus and Turkey before entering the EU via the Trans Adriatic Pipeline (TAP), which crosses Greece and Albania and surfaces in southern Italy (TAP, IEA). In 2025, Azerbaijan supplied roughly 12.5 bcm to EU countries, about 8.1% of EU pipeline-gas imports (kmetro0.eu, Balcani Caucaso). Real volumes, but not a Russian replacement.

Reaching the 20 bcm target requires investment in new Azerbaijani gas fields, physical expansion of TAP beyond its current 10 bcm design capacity, and buyers willing to sign the long-term contracts Baku demands before committing capital (Serbia Energy).

Germany's Way In — and the Missing Northward Route

Germany's stake comes through a specific deal: state-backed trader SEFE signed a ten-year contract with Azerbaijan's state oil company SOCAR for 1.5 bcm per year starting in 2025 (Azernews). That gives Berlin a commercial foothold in a corridor previously centred on southeast Europe.

Getting southern gas to Germany requires the so-called Vertical Corridor: a chain of pipelines linking national gas grids through Greece, Bulgaria and Romania to push gas northward. Bulgarian upgrades are targeted for late 2026, but the route still depends on countries along the way agreeing who pays, who books pipeline space, and how gas moves north when demand spikes. None of that is settled.

Hungary shows what diversification claims look like without the numbers to match. Budapest signed a deal for 800 million cubic metres over two years, roughly 3% of Hungary's annual imports (Makronom). The government presents this as sovereign energy strategy. Yet in the first five months of 2026, Hungary spent more on Russian pipeline gas than any other EU member state (Telex). A small Azerbaijani contract can dress up a diversification story without changing the underlying dependency.

No Rights Clause, No Transparency

The EU's gas memorandum with Baku contains no enforceable human-rights conditions tied to deliveries (European Commission). Human Rights Watch describes Azerbaijan as a repressive state (HRW). After Azerbaijan's 2023 Nagorno-Karabakh offensive, the European Parliament (the EU's directly elected legislature) called for sanctions against Baku and urged the EU to end its gas dependence on Azerbaijan (Euronews). The Commission's energy diplomacy went the other way.

A separate concern shadows the corridor. Global Witness warned that Azerbaijan could expand EU-bound exports partly by importing Russian gas for domestic use, freeing Azerbaijani production for Europe (Global Witness). That is not proven relabelling of Russian molecules, but it weakens any claim of a clean break from Russian supply.

Europe has made Azerbaijan useful before making the relationship accountable. The take-or-pay clauses (which lock buyers into paying whether or not they use the gas), price formulas and exit conditions that define Europe's actual exposure remain unpublished. Until governments release those terms, voters are asked to trust that post-Russian diversification is not becoming a new dependency with better branding.