EU plans to shut down energy price brakes this week – Politico
The European Union is on track to impose historic energy market interventions to rein in high prices, including consideration of a tax on excess profits and caps on gas prices, according to a document obtained by POLITICO’s Brussels Playbook.
Experts at the European Commission, in national capitals and embassies worked around the clock over the weekend to speed up emergency intervention plans to protect families and businesses – with many leaders warning of widespread social unrest if prices were not brought under control.
In a document dated September 4 obtained by POLITICO, the Czech Presidency of the Council of the European Union warned that the Russian invasion of Ukraine, Moscow’s continued disruption of energy supplies and the “complete and unlimited disruption” of the Nord Stream pipeline “are fueling the surge. It has severe impacts on all businesses and consumers.” “.
Nord Stream news raised the price of gas at the Dutch benchmark TTF hub by 31 percent on Monday morning to €281 per megawatt-hour.
In response, the Presidency of the Republic He set the ball rolling by testing the appetite among the bloc’s 27 nations for measures ranging from price caps to market controls, asking capitals to announce what measures they are willing to back down at a meeting of EU energy ministers on Friday.
The developments come after leaders of Germany’s ruling coalition parties on Sunday finally agreed to support the European Commission’s proposed electricity price tax for “inframarginal” plants – power generators that do not use natural gas. Because of the way the EU energy market works, these non-gas producers make huge windfall profits because the price of energy is determined by the most expensive input – natural gas.
The Czech presidency has compiled a list of proposals from across the bloc, for consideration ahead of Friday’s Energy Council meeting.
Some capitals want to cap gas prices from “designated jurisdictions” – that is, Russia, which has weaponized its energy exports. One idea being considered is setting a price at which companies can buy Russian gas, similar to oil price cap measures agreed by the Group of Seven last week, in an effort to limit the Kremlin’s ability to fund its war in Ukraine.
Options for decoupling electricity and gas prices are also on the table – but significant disagreements remain among EU countries over whether and how such a sensitive intervention will be implemented.
Other market measures being considered include the provision of an immediate line of credit Supporting companies with very high margin calls, adjusting trading rules on energy exchanges or temporarily suspending European energy derivatives markets, among others.
Central European governments want the EU to release additional allowances for greenhouse gas emissions from the emissions trading system if the price rises above a certain threshold – a proposal vehemently opposed by the European Commission.
Commission President Ursula von der Leyen seeks to break down the proposals into a package of immediate interventions and long-term reforms. Brussels will defer some of those broad ideas that leaders are pushing for, but those countries can’t agree on quickly (like a Spanish idea to implement gas subsidies or Central Europe’s call to reduce emissions prices) to a later date without having to. To give infinite.
The Czech presidency wants countries to endorse a raft of proposals – including a cap on the price of electricity – at the Energy Council on Friday, tasking the commission with developing legislation based on Article 122 of the EU Action Treaty, which would allow states to agree to emergency measures without The need to involve the European Parliament.
Leaders across the bloc, as well as European Council President Charles Michel, have called on the EU executive to act as consumers and businesses grapple with the cost of living crisis.
According to officials, the final legislation will likely be revealed around the same time that von der Leyen delivers her annual State of the European Union address on September 14.
This article has been updated with the latest gas prices.
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