EU energy ministers will seek to adopt emergency measures on Friday to curb soaring gas and electricity prices in the face of a potential social crisis and business failures as winter approaches.
Recent leaks on the Nord Stream 1 and 2 gas pipelines in the Baltic Sea, denounced by the EU as acts of “sabotage”, have raised new concerns within the bloc, already reeling from soaring prices linked to the war unleashed by Russia in Ukraine.
Meeting in Brussels, the ministers of the 27 should validate proposals presented in mid-September by the European Commission, aimed at recovering part of the “super profits” of energy producers to redistribute them to consumers, and reduce demand for electricity.
But a majority of member states – fifteen, including France, Belgium, Italy and Spain – believe that the “most serious problem” must be addressed: they are calling for a cap on wholesale gas prices on the European market.
These countries want the measure to apply to all gas imports, not just those from Russia. And some “are increasingly nervous” about the Commission’s attitude, according to an EU diplomat.
The EU executive, like Germany, is reluctant to take such a step, fearing that limiting prices would threaten European supplies by dissuading “reliable partners” such as Norway or the United States from supplying the EU with gas, to the benefit of Asia.
The Commission is proposing to set a maximum price for Russian gas -transported by pipeline or liquefied natural gas (LNG)-, which currently represents 9% of European imports. Russia was historically the EU’s largest gas supplier, transporting more than 40% of the gas in the bloc.
Brussels is counting on negotiations with other suppliers of pipeline gas to bring prices down, but believes that for LNG, the ability to negotiate is limited by international competition.
The Commission is also considering a cap on the price of gas used for power generation.
– “Question of survival” –
These options will be discussed by the ministers, and should result in a more detailed plan, before a summit of EU leaders on October 7 in Prague.
In the meantime, ministers are expected to agree Friday on a draft regulation that would cap the revenues of nuclear and renewable (wind, solar, hydro) power producers who are making windfall profits by selling their output at prices far above their production costs.
The ceiling would be set at 180 euros per megawatt-hour and the difference with the wholesale market price would be recovered by the states to be redistributed to households and businesses. A “temporary solidarity contribution” is also planned for gas producers and distributors,
coal and oil.
According to Commission President Ursula von der Leyen, this could result in a total of about 140 billion euros in revenue.
The bill also sets a binding target for states to reduce their electricity consumption “by at least 5%” during peak consumption hours. The EU-27 are also called upon to reduce their monthly electricity consumption by 10%, an indicative target.
Many EU countries have already put in place national support schemes to relieve households and businesses strangled by bills.
France and Spain in particular have energy price caps. Similarly, Germany, the EU’s largest economy, announced on Thursday that it would release up to 200 billion euros more to limit gas and electricity prices.
The European employers’ association BusinessEurope warned on Thursday that gas and electricity prices pose an “imminent risk” of “production losses” and “shutdowns of thousands of European companies”.
Mitigating the impact of these prices is “a matter of survival,” she said.
