The position of countries in the face of the energy emergency – POLITICO
EU energy ministers traveled to Brussels on Friday to discuss their options as Europe faces a catastrophic energy crisis.
They will consider five proposals put forward on Wednesday by European Commission President Ursula von der Leyen, as well as other ideas suggested by member countries.
Ministers are expected to agree on at least a few areas, including limiting revenues for power companies that do not produce electricity with expensive natural gas and financial support for struggling utilities.
But other ideas, including capping the price of Russian natural gas and imposing mandatory energy savings, are highly controversial.
Ministers are unlikely to formally adopt any of these proposals, EU diplomats tell POLITICO; instead, the Commission will formally present its proposal next week – with a final decision likely to be taken by national leaders next month.
The aim of the summit is to advise the Commission on its proposal, calm highly volatile energy markets and give Europeans confidence that everything is under control, diplomats said.
Here’s what to expect at the high-stakes meeting, according to nine national and European diplomats.
1. Capping the profits of electricity producers
The central element of the Commission’s proposal is to limit the income generated by companies using non-gas technologies such as wind and nuclear to produce electricity – called “inframarginal” in Brussels – but which now carry out massive windfall profits because the price of electricity is being set by very expensive natural gas. This recouped money is supposed to help consumers deal with higher energy bills.
This proposal has been widely endorsed by countries such as Germany, Greece, Belgium, France, Slovakia, Poland, Italy and the Netherlands, either showing openness or fully supporting the proposals, European and national diplomats said.
But there are complications. Countries have very different energy mixes, and those dependent on gas, such as Italy, could receive much less money since gas generator revenues would not be included in this scheme.
The Commission has proposed setting a threshold of €200 per megawatt-hour for the scheme to come into effect, but France argues that different energy producers should be subject to different tariffs, according to an energy ministry official.
2. Energy saving
Von der Leyen also called on countries to reduce electricity demand through mandatory “smart savings” of electricity during peak hours.
Countries such as the Netherlands, Greece, Slovakia and Germany are in principle open to such a policy – although some want the cuts to be voluntary and not compulsory.
“We are not planning to put in place any mandatory restrictions,” Polish Environment Minister Anna Moskwa said. Told Polish television Polsat, claiming that the Commission had no right to make such requests. “I understand that the President of the EC wants us to save energy, and she can appeal, she can encourage, she can show good examples, but she has no authority to force a country to do so. “
3. Gas price cap
Setting a price cap on gas imports is the thorniest issue.
On Wednesday, von der Leyen suggested capping the price paid for Russian gas, saying it was intended to both protect vulnerable consumers and reduce Kremlin revenue.
But some countries, especially in central Europe, fear being completely cut off from the little Russian gas that continues to flow into the continent.
France, Estonia, the Netherlands and at least three other countries are said to be willing to limit the cap to Russian gas. But others – including Poland, Greece, Slovakia, Belgium and Italy – want the Commission to go further and cap the price of all imported gas. Some warn that they will refuse a price cap that only targets Russia.
“A cap on Russian gas only is a purely political objective,” Belgian Energy Minister Tinne Van der Straeten said. “I don’t see the added value in that. We will not accept this.
Belgium and Greece have circulated their own proposals for capping all imports.
But Germany is skeptical about the feasibility of such a system, an official said.
“Germany expresses a lot of concerns,” Van der Straeten said. “We don’t feel strong support from Germany.”
4. Help utilities
With many public services facing bankruptcy and seeking bailouts, von der Leyen also said the Commission could “help…facilitate liquidity support” by EU countries to struggling businesses.
This could mean government lines of credit for companies that need to trade on stock exchanges, with EU state aid rules banning such subsidies being temporarily lifted.
Countries like Germany, Belgium and Poland have expressed openness to this, although others like Slovakia have expressed doubts.
5. Squeeze the fossil fuel giants
The Commission has also called for taxing the profits made by fossil fuel companies, with those funds also redistributed to consumers.
“Oil and gas companies have also made huge profits. We will therefore offer a solidarity contribution for fossil fuel companies,” said von der Leyen.
But at least three national diplomats said they had not had enough time to prepare a position on the idea. A senior national diplomat called the wording of the Commission’s proposal “vague” and said further discussion was needed.
America Hernandez, Hans Joachim von der Burchard, Barbara Moens, Camille Gijs, Giorgio Leali and Jacopo Barigazzi contributed reporting.