EU summit to pass on energy ‘hot potato’ to ministers

Leaders will ask the European Commission and EU member states "to consider medium and long-term measures that would ensure energy at a price that is affordable for households and companies" while supporting the transition to climate neutrality. [Copyright: European Union]

EU leaders will take stock of the European Commission’s proposed “toolbox” of measures to tackle rising energy prices when they meet in Brussels today (21 October), but will leave energy ministers to discuss the details next week, according to draft summit conclusions seen by EURACTIV.

Heads of state and government will meet in Brussels this afternoon to discuss the global hike in energy prices, based on a “toolbox” of short and long-term measures presented by the Commission last week.

These include emergency income support for households and state aid for companies, as well as targeted tax reductions, which have already been rolled out in six countries – France, Greece, Italy, Portugal, Slovenia and Spain.

Leaders will ask the European Commission and EU member states “to consider medium and long-term measures that would ensure energy at a price that is affordable for households and companies” while supporting the transition to climate neutrality.

They will also call on the European Investment Bank “to speed up investment in the energy transition” as a way to alleviate pressure on energy prices.

However, EU leaders won’t adopt any “conclusions” on the matter at this stage, only urging the Commission and the member states to “make the best use of this toolbox” to provide short-term relief to consumers.

“The toolbox presented in the Commission Communication on tackling rising energy prices contains useful measures for both the short and the longer term,” read the draft summit statement.

EU outlines short and long-term answer to global energy price surge

The European Commission unveiled on Wednesday (13 October) a “toolbox” of measures  EU countries will be able to draw from when responding to rising energy prices in the short term, while pointing to an upcoming gas market reform for measures to be considered in the long term.

Detailed talks will be left to energy ministers, who will gather in Luxembourg on Tuesday for an extraordinary meeting of the Energy Council.

As one EU source told EURACTIV, leaders will pass on the “hot potato” to ministers.

“Member states are very split,” one EU diplomat said. “There is no common vision on what to do except follow the toolbox and use national measures to address vulnerable consumers – but beyond that, there is absolutely no agreement.”

European gas prices have hit record highs as tight supply has collided with economies emerging from the COVID-19 pandemic, pushing up consumers’ electricity bills amid record-high CO2 prices and lower-than-expected gas deliveries from Russia.

Countries including Spain, Italy and Greece want the EU to respond with regulatory changes. They propose joint gas buying among EU countries to form strategic reserves, and decoupling European electricity prices from the cost of gas-fuelled generation.

Others, including Germany and Belgium, are wary of overhauling regulations in response to a short-term crisis. The Commission said gas prices were expected to stabilise at a lower level by April.

“This whole issue of energy is a very complex situation because different member states have different energy mixes, some people have got gas, nuclear, coal, and some are more sustainable,” one EU source explained. “So there are different approaches, depending on the sort of network and interconnection that exists,” the source added.

And while the short-term response to the crisis is quite consensual, longer-term measures, however, are more contentious.

Ahead of the summit, Poland and Hungary have blamed Europe’s climate policies for the rise in energy prices and called on the European Commission to suspend the EU’s carbon market, the Emissions Trading Scheme (ETS).

Viktor Orban, the Hungarian Prime Minister, went further calling the ETS a “stupid” policy.

“The ETS system must be cancelled or suspended. The price will go up every day if this stupid plan is not withdrawn,” he declared.

Poland urges 'postponement' of EU climate plans amid rising energy prices

As EU leaders meet this week to discuss rising energy prices, Warsaw has called for an in-depth review of EU climate policies, including the “revision or postponement” of the ‘Fit for 55’ legislation tabled in July.

Other EU countries are expected to reject those calls, however, with many of them highlighting that the Green Deal is the long term solutions to the current crisis.

“The rising energy prices shows the need to be more independent when it comes to energy and that investment in renewables is key to reach that goal so that we can reduce prices and also have more investment in those sectors,” said an EU source.

With the COP26 climate summit approaching, EU countries are also keen to show a united front on green policies, particularly as the European Union is pushing other countries like China and India to raise their ambition.

Russia may also come into the conversation between EU leaders. The country is one of Europe’s main gas providers and some are questioning whether it could be doing more to alleviate Europe’s struggles.

“Some say that Russia is also at the source of the issue. Others are saying that Russia has not been the cause of it,” an EU source said.

“Others are saying that Russia has not helped to solve the crisis, but you have seen what has been said by Vladimir Putin and also I think the spokesperson of the Kremlin has mentioned that Russia would be willing to or ready to help if asked. I guess that will be part of the discussion,” the source added.

The Green Brief: East-West EU split again over climate

Eastern EU countries are blaming the bloc’s carbon market for rising energy prices. Simply dismissing those calls as populists would be ill-advised as EU leaders meet in Brussels for a two-day summit starting tomorrow.

[Edited by Frédéric Simon]

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