The impact of surging gas and electricity prices globally threatens the EU’s energy market, but the bloc will not react hastily, officials said on Tuesday (26 October).
An emergency meeting of EU ministers in Luxembourg to discuss the issue largely backed 11 member countries in rejecting proposals from Spain and France for deep-rooted reforms to the market.
The ministers recognised the price hikes “jeopardised the integrity of the European energy market,” the chair of the meeting, Slovenian infrastructure minister Jernej Vrtovec, told a press conference.
But they agreed “we should not rush into rash decisions,” EU energy commissioner Kadri Simson said.
A “toolbox” of short-term measures available to EU countries was widely endorsed. It relies mainly on temporarily cutting national energy taxes that typically account for around a third of power bills.
The gathering in Luxembourg was bookended between an EU summit last week on the same issue and the COP26 climate summit next week in Britain.
Energy prices have rocketed worldwide as many countries’ economies jump into high gear after a long hiatus forced by COVID-19 restrictions.
Europe, highly dependent on imported gas and oil, is seeing wholesale energy prices jump dramatically, mainly on the back of soaring spot gas prices that are the benchmark.
Spain went into the meeting hoping to persuade the others to back a maximum gas price and joint EU gas purchases, along the same line as the bloc’s successful common procurement of COVID-19 vaccines.
France, supporting Spain, also was keen to explore decoupling the gas price from the overall price paid for energy – reflecting the fact that France gets most of its energy from nuclear power.
Spain’s energy minister, Sara Aagesen Munoz, said the energy price surge “is an extraordinary and urgent situation that requires urgent action”.
‘Europe under pressure’
But 11 countries including Austria, Denmark, Finland, Germany, Ireland, the Netherlands and Sweden backed a statement opposing fundamental changes to the EU’s market.
Simson said there was “broad consensus” that the current price hike was temporary and “caused by the extraordinary global gas demand – not our market design”.
“There is no denying that the current market situation puts Europe under pressure,” she said, but the focus needed to stay on the EU’s ambitions to become carbon neutral by 2050, which meant more investment in renewable sources.
“Changing the current model poses risks to market predictability, competitiveness and our clean energy transition,” Simson said.
Nevertheless, the ministers were open to Spain’s proposal for joint procurement of gas, “as an idea among others” being explored, she said.
On the EU’s climate change policies, Simson said there was “intense debate” in the meeting about whether nuclear power should be included in an upcoming European Commission list of energy sources considered “green” for investment, as France wants.
“From our point of view, every member state can choose their energy mix and they do have unique paths,” she said.
“Nuclear energy is consistently acknowledged as a low-carbon energy source. But opinions differ on the potential impact on the environmental objectives such as environmental impact of nuclear waste.”