Twelve countries summon the European Commission to present a proposal to put a cap on the price of gas. This Friday there is an extraordinary meeting of the EU energy ministers in Brussels, and Spain and 11 other countries are beginning to have doubts that the Community Executive will arrive on time with a plan to limit the price of gas, which is being delayed.
Europe agrees to intervene urgently in the energy market for fear of a recession
The EU Energy Ministers asked the European Commission on September 9 to limit the benefits of electricity companies, put a cap on the price of gas, reduce electricity consumption and help homes and businesses. Brussels presented its proposal on September 14 to limit the profits of companies and reduce electricity consumption, but has not yet presented anything related to the price of gas and another matter that worried the ministers: providing liquidity to energy futures markets .
Josef Sikela, Czech Energy Minister, the country that holds the rotating presidency of the EU Council, explained: “Now we know the path we want to take: the level of energy and electricity prices at present generates inflation and harms the European economy. , weakening competitiveness and generating social tension. There are four areas in which the Member States expect the European Commission to present legislative measures in the coming days. The four areas are: limit the income of electricity producers with low production costs, with solidarity investment from fossil fuel companies; we expect the Commission to introduce an urgent intervention to limit the price of gas; also measures for a coordinated reduction in electricity demand. The ministers have also called for measures to help solve the liquidity problem [ayudas de Estado] in future markets.
Well, with only a few days left, Belgium has launched an initiative, in the form of a letter addressed to the European Commissioner for Energy, Kadri Simson, to summon the European Commission.
“The energy crisis that began last fall has worsened over time and is now causing unsustainable inflationary pressures that are severely affecting our homes and our businesses,” begins the letter, which elDiario.es has had access to and is pending. to be sent to the Community Executive: “We recognize the efforts made by the Commission and the measures it has proposed to face the crisis. But we still have to tackle the biggest problem of all: the wholesale price of natural gas. The price cap that has been requested from the outset by an increasing number of Member States is the only measure that will help mitigate inflationary pressure, manage expectations and provide a framework in the event of potential supply disruptions, and limit the extra benefits in the sector”.
According to the signatories of the letter, Spain, Belgium, Bulgaria, Croatia, France, Greece, Italy, Latvia, Lithuania, Malta, Poland, Portugal, Romania, Slovakia and Slovenia, “the cap must apply to all natural gas transactions at the Wholesale [incluido el gas natural licuado]and not limited to importation from specific jurisdictions [Rusia]. It can be designed in a way that ensures security of supply and the free flow of gas within Europe, while achieving our common goal of reducing gas demand. This cap is the priority and can be complemented by proposals to strengthen financial supervision of the gas market and develop alternative benchmarks for gas pricing in Europe.”
Consequently, the signatory ministers ask the Commission to “present a proposal in this regard to be discussed at the extraordinary Energy Council on September 30, to be followed by a legislative proposal as soon as possible”.
The proposals, so far, from Brussels
Brussels has approved its proposal to intervene urgently in the energy and electricity market. Although he still asks for more time to define the caps on the price of gas and provide liquidity to the financial futures markets, this Wednesday he presented at the headquarters of the European Parliament, in Strasbourg, how he wants to raise up to 142,000 million with the caps on super profits from inframarginal industries –such as renewables– and from fossil fuel industries.
“In the times in which we live it cannot be that some obtain extraordinary and unprecedented profits thanks to the war and at the expense of consumers. At this time, the benefits must be shared and channeled to those who need them most”, said the President of the European Commission, Ursula von der Leyen, before the plenary session of the European Parliament during the debate on the state of the Union, in Strasbourg.
The proposal for the regulation on an electrical emergency tool and a contribution from the fossil sector is based on article 122 of the Treaty on the Functioning of the European Union, which haggles passage through the European Parliament. As such, the proposal requires the vote of a qualified majority in the Council – the Governments – to be approved, and its adoption will depend on the internal procedures of the Council, which meets extraordinarily on September 30 in the format of energy ministers. .
“The proposed measures are of an extraordinary nature and, therefore, must have a limited duration”, says the European Commission: “The electrical emergency tool must be applied no later than December 1, 2022 and until March 31, 2023 The European Commission has committed to carry out a review of the electricity emergency tool before February 28, 2023, taking into account the situation of electricity supply and electricity prices throughout the EU, and present a report on the main conclusions of that review to the Council”.
The calls solidarity contributions from the fossil sector, that is, the rate on extraordinary benefits, “will be applied for one year from its entry into force. The Commission will carry out a review before October 15, 2023, in view of the general situation of the fossil fuel sector and the surplus profits generated, and will present a report on the main conclusions of that review to the Council.
Room for maneuver
Brussels leaves room for maneuver for countries to apply part of its proposals, but governments want even more. according to drafts viewed by EURACTIV, This includes allowing countries to “set a specific cap” on coal revenues, setting a higher revenue cap for producers with investment and operating costs “higher than the Union-wide cap” and exempting coal production. energy used during peak hours as a “provider of last resort”.
Along with these changes, more than 15 countries are still “seeking more space within different parts of the three proposals to accommodate national measures that already exist,” according to a diplomatic source.
The Commission proposal even highlighted the dangers of having “uncoordinated caps” that “can lead to significant distortions between generators in the Union, as generators compete across the EU in a coupled electricity market”.