The EU last week proposed emergency measures to combat the energy crisis. EU countries meet to approve emergency levies on windfall profits of energy companies. Also, the EU must discuss future measures that will be put in place to deal with the energy shortage.
Meeting of EU Energy Ministers
The energy ministers of the EU members must, according to some diplomats, approve a one-off levy. This one concerns excess profits of fossil fuel companies. In addition, a levy on the revenues of low-cost generators is planned.
In addition, the next steps of the EU to control soaring energy prices will also be discussed. The issue is divisive. Some nations advocate a cap on gas prices, others are vehemently opposed.
A diplomat from an EU country comments:
“On the price cap, we are far from a consensus.”
A divisive price cap
The idea is not new. In fact, 15 countries are asking the EU to propose a price cap for gas transactions. This, they say, would help keep inflation in check. For Belgium, Greece, Poland and Italy, it is a question of setting a ceiling “sufficiently high and flexible to allow Europe to attract the necessary resources”.
However, some EU states are against it. This is the case in Germany and the Netherlands. In their view, a gas price cap would lead to numerous supply difficulties. In fact, this would mainly concern countries in difficulty and which are not necessarily able to compete with buyers on world markets.
In sum, many actors have doubts about the effectiveness and feasibility of such a measure. A diplomat from one of the EU countries states:
“[Cette idée présente] significant weaknesses and risks to security of supply.”
Similarly, the European Commission is not convinced. It suggests that the EU focuses on more limited versions. She reports that it would take “significant financial resources” to implement a cap.
The EU countries in favor of a price cap intend to continue negotiations. In Belgium, Energy Minister Tinne Van der Straeten says:
“We will take additional measures with Germany, with Austria, with all the countries that today still have reserves.”
According to her, a gas price cap set by the EU could reduce the cost of purchasing emergency gas. It estimates this cost at 2 billion euros. Thus, in relation to individual expenses, the sum is not comparable, she says.
In fact, Germany has approved a “defensive shield” of 200 billion euros. It includes a brake on gas prices but also a reduction in the sales tax on fuel. Thus, Berlin wants to protect German companies and citizens.