Kamis, 07 Oktober 2021

EU energy chief says gas price surge has no quick fixes - Financial Times

Brussels is powerless to prevent the gas price surge that is hitting consumers across Europe, the EU’s energy commissioner has said as she rebuffed demands from member states to act now to address the crisis.

Kadri Simson told the Financial Times that Brussels had no powers to provide short-term fixes but would encourage governments to offer “targeted” national support, including cutting energy taxes.

She also stepped away from promising sweeping regulatory changes to the bloc’s internal energy market, which some member states have blamed for exacerbating the crisis.

“The reasons behind high global energy prices are not created here in Europe,” said Simson. “Several of our proposals will be addressing long-term solutions,” she added, referring to options including joint EU gas procurement and better storage facilities to act as a buffer against further supply shocks.

Europe’s governments are at loggerheads over how to respond to an electricity price surge driven by record global demand for natural gas and limited storage capacity in the EU.

France, Spain and eastern member states have demanded Brussels provide immediate palliatives to protect households and consumers from rising costs — on top of subsidies that some governments have already authorised.

France and Spain also want Brussels to scrap a system of marginal pricing, where the cost of electricity is determined by the last, most expensive source of energy bought. Simson made clear the European Commission is unlikely to reform energy pricing rules.

Simson said the internal energy market, set up in 1990s to help liberalise electricity supply, was not responsible for the price rises but “had opened up new possibilities for smaller producers” encouraging investment in green technologies.

“The market is not dominated by the big players and is open for smaller renewable installations. We are monitoring what different member states are asking us to do. But there are not many voices who are asking us to change something that is not behind high prices,” she said.

Brussels will also test EU support for reforms including joint procurement and common storage for natural gas.

But Simson warned that previous attempts for Brussels to purchase gas on behalf of all member states had been bogged down in complications.

“It has not become a reality because there are lots of practical obstacles. It is complex for the commission to have the permission to negotiate on behalf of member states who have different energy mixes and different rules on how they trade gas,” she said.

The energy crisis has also put EU climate policies under scrutiny.

Poland, Spain and the Czech Republic have complained about the EU’s carbon market, known as the Emissions Trading Scheme (ETS) which forces leading electricity producers to pay for carbon credits to cover the cost of pollution. The price of carbon credits has shot to records above €60 a tonne in the past month, prompting some countries to warn market speculators are driving up costs for consumers.

Simson said the commission, which regulates the carbon market, had no such evidence. “We don’t have any concrete examples of market manipulation on the ETS. There are inbuilt safeguards designed to limit extreme rises,” she said.

CO2 pricing is at the heart of EU debate about how to reach the bloc’s target of net zero carbon emissions by 2050. Poorer eastern and southern countries, as well as France, are vehemently opposed to extending the ETS to consumer facing sectors such as transport and heating. They argue it will have a regressive impact on the poorest households.

The ETS extension is among a host of policies under the EU’s landmark Green Deal, a package of 13 policies designed to set the bloc on a path of radical decarbonisation. Germany, the Netherlands, and the Nordics are determined not to let the price rises derail broader climate measures and are wary of EU intervention in what they see as a short-term crisis.

“The current price rises have many causes and we shouldn’t mix that up with [EU climate policies]”, said Svenja Schulze, Germany’s environment minister, during an EU meeting on Wednesday.

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2021-10-07 04:00:41Z
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