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European energy ministers on Friday supported taking a series of urgent measures to curb the escalation of gas and electricity consumption prices, leading to a proposal to set a ceiling on gas import prices in the European Union.
After their meeting in Brussels, the representatives of the 27 countries agreed on a “common approach” to address the rise in energy prices against the backdrop of the Russian military offensive in Ukraine, and asked the European Commission to prepare within a few days a “solid and concrete proposal”, according to what the Czech Minister of Industry Josef Sekila announced. whose country holds the rotating presidency of the European Union.
Energy Commissioner Kadri Simpson responded, “Next week we will introduce unprecedented measures to deal with an unprecedented situation. We will have a very difficult winter, but our energy union is solid and will remain.”
On the sidelines of the meeting, the European executive body proposed to the member states several mechanisms, but they are often complex, with the hope of reaching, by Wednesday, a draft law on which an understanding would be made in preparation for its rapid approval.
If the idea of acquiring the huge profits from nuclear and renewable energies with the aim of redistributing them has been very welcome, as is the possible goal of reducing electricity consumption, the proposal to put a ceiling on gas prices paid to Russia has sparked debate.
At a time when Moscow threatens to stop its supplies in the event of resorting to this mechanism, Hungary, which is still highly dependent on Russian energy sources, affirmed its opposition to this “camouflaged new sanctions”, which would cause a “shortage”, while Prague condemned the “idea unconstructive.”
In the end, “the prevailing opinion was that we need a ceiling in terms of gas” regardless of its source, “but the commission should be given time to determine how to implement this,” according to Sekila.
And since Russian gas now represents no more than nine percent of European imports (compared to forty percent before the war), several countries, including Italy, called for a full ceiling on liquefied gas prices. “Fifteen countries declared clear support (…) that it is a solid majority,” said Italian Minister Roberto Kingolani.
“Nothing is out of the question (…) but we should be careful not to undermine the security of our supply” during the winter, Simson commented, noting that the EU must remain attractive enough in a fiercely competitive global market.
French Minister Agnès Pannier-Runacher said, “Under the title (ceiling gas prices), we can do many things, whether it is liquefied natural gas or gas that arrives through pipelines from Norway and Algeria,” or even the ceiling imposed by Spain on gas prices that are imposed by Spain. reimbursed by thermal stations.
From Berlin, German Chancellor Olaf Scholz said: “There are a lot of very different proposals, it’s still too early to say we will do this or that.”
Redistribution of “enormous profits”
The European Commission proposes setting a ceiling on the revenues of companies operating nuclear plants and renewable energy plants, which sell their electricity at prices far above the cost of production.
Countries can take advantage of the difference between this ceiling and market prices to redistribute these “massive profits” to vulnerable households and businesses.
Despite the differences in the issue of energy from one country to another, the procedure is widely understood. Berlin and Paris demanded a similar “contribution mechanism” following political pressure to impose taxes on “enormous profits.”
In parallel, the commission is calling for a “temporary solidarity contribution” from producers and distributors of gas, coal and oil in light of the rising prices.
After the 27 EU countries agreed at the end of July to reduce their gas consumption, Brussels also proposes setting “binding targets” to reduce electricity demand with a reduction of “at least ten percent of net monthly consumption” and five percent in peak hours.
“As with gas, the approach will initially be voluntary, with the possibility of moving to a mandatory reduction from a level that still requires discussion,” Sekila said.
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