Brussels has been urged by a string of EU countries to find ways quickly to ease the continent’s gas crisis as prices surged to record levels because of supply fears.
A number of European leaders have criticised the European Commission for not responding quickly enough, warning that soaring prices could imperil the continent’s economic recovery and risk potential social unrest.
The rise in European gas prices, which hit another all-time high on Wednesday, has stoked criticism of the EU’s flagship Green Deal, a package of upcoming policies designed to make the continent climate neutral by 2050. Critics of the policy say it will push up energy costs for citizens as fossil fuels are phased out.
At least three leaders used a gathering of EU members in Slovenia to urge the commission to find measures to mitigate the impact of the price surge and prevent a repeat, officials involved in the talks told the Financial Times, adding that the number of restive member states was growing.
“The commission has to act immediately,” one senior EU politician told the FT.
“Otherwise the Green Deal will be the symbol of high energy prices and we will have instead of gilets jaunes, gilets [protesting over] energy poverty everywhere,” the politician said, remembering French protests against rising fuel prices in 2018.
France, Spain, the Czech Republic, Greece and Romania called publicly for policies to co-ordinate national responses and “immediately react to dramatic price surges”.
Other countries, including Germany and other northern states, have warned against rushing into changes to the EU’s energy market. They say the price surge is being driven largely by rising demand and one-off factors. They also do not want the crisis to derail the bloc’s ambitious climate policies which member states are negotiating.
The commission will next week publish a “toolbox” of short-term measures that governments can take to respond to the gas price surge, including policies to protect households from higher electricity costs. Brussels will then put forward a more sweeping energy package at the end of the year, addressing issues such as gas storage.
Mario Draghi, Italy’s prime minister, said after the Slovenia meeting that the commission was ready to discuss buying energy on behalf of all member states. “The commission will present a proposal to be discussed at the next European Council,” he said.
Frans Timmermans, EU commissioner in charge of the Green Deal, said Brussels was working to find a “consensus at EU level on how we can protect our citizens against undue price hikes”.
“The level of social unrest if we leave the climate crisis untackled will be insupportable. Our children will wage wars over water and food if we don’t tackle the climate crisis,” said Timmermans.
National concerns were raised at a private dinner of leaders on Tuesday evening, and in public comments at the opening of formal summit talks on Wednesday morning.
Speaking to reporters on Wednesday, Hungarian prime minister Viktor Orban laid part of the blame for rising energy costs on the EU’s proposal to raise the cost of pollution by extending its emissions trading scheme, calling it “indirect taxation” on citizens.
“Partly the reason why the prices are up is the fault of the commission,” he said. “We have to change some regulations, otherwise everybody will suffer.”
EU estimates suggest about 12 to 15 per cent of the current electricity price surge can be attributed to the bloc’s carbon market, where power generators buy credits to cover the cost of pollution.
Timmermans told EU ministers on Wednesday that the record carbon price had generated almost €11bn in additional revenues for governments in the first nine months of this year, compared with 2020. Almost all the proceeds go into the budgets of EU member states and can be used to shield consumers from price hikes.
Commission president Ursula von der Leyen on Wednesday said that while the gas price surge was “a serious issue” it was further proof of the EU’s support for renewable energy.
Any common EU responses — such as boosting storage capacity and building up strategic gas reserves — are likely to address medium and long-term concerns rather than the immediate supply crunch.
Additional reporting by Davide Ghiglione in Rome
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2021-10-06 13:08:55Z
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