In her annual state of the union speech, European Fee president Ursula von der Leyen set out main vitality market interventions to handle excessive costs
The European Fee has stepped again from earlier plans to cap the worth of Russian gasoline, proposing as a substitute to arrange a brand new job pressure with EU member state representatives that can try to barter offers with key suppliers equivalent to Norway.
In her annual state of the union speech earlier than the European Parliament in Strasbourg on Wednesday (14 September), Fee president Ursula von der Leyen mentioned negotiation could be a extra environment friendly technique to decrease gasoline costs, that are set on the worldwide market.
EU vitality ministers, assembly final week in Brussels, expressed reservations a few gasoline worth cap, saying it risked undermining the EU’s capability to barter provide offers with various suppliers.
A brand new job pressure might be set as much as negotiate offers with Norway and different gasoline suppliers in order that “we decrease in an affordable method the worth for gasoline,” mentioned von der Leyen, the previous German defence minister who took the helm of the EU government in December 2019.
The transfer was welcomed by Simone Tagliapietra, a senior fellow on the Bruegel financial suppose tank in Brussels.
“She is correct: that is the way in which to go – probably with through EU joint motion to leverage the dimensions of the European gasoline market,” he advised Euractiv.
In parallel, von der Leyen introduced the creation of a brand new gasoline market benchmark to mirror the EU’s speedy shift from imported pipeline gasoline to liquified pure gasoline (LNG), which is traded on the worldwide market and shipped from faraway locations equivalent to Qatar and the USA.
“Now we have to diversify away from Russia,” she insisted, noting that pipeline gasoline provides from Moscow have now fallen to 9% of EU gasoline consumption from round 40% final 12 months.
Within the face of hovering gasoline costs, EU nations have poured billions into social safety measures as a way to protect essentially the most susceptible households.
To assist finance this, von der Leyen introduced the creation of a windfall tax on the “revenues of corporations that produce electrical energy at a low value” – sometimes renewables and nuclear. A draft proposal, seen by Euractiv, places the restrict at €180/MWh, the identical degree that has been launched in Spain.
A separate “solidarity contribution” might be demanded of oil and gasoline corporations, which have reaped extraordinary earnings from hovering costs on world vitality markets.
“Our proposal will elevate greater than €140 billion” for EU member states to cushion the blow of the vitality disaster on European customers, von der Leyen introduced.
European Hydrogen financial institution
On the similar time, the Fee president warned towards repeating the errors of the Nineteen Seventies oil disaster by investing an excessive amount of in new fossil gas infrastructure.
“Just a few visionaries realised the issue was the fossil fuels themselves – not their worth”, she mentioned. “We saved driving on the identical highway” and “fossil fuels had been massively subsidised,” she warned. “That was unsuitable and we’re nonetheless paying the worth for that.”
To make sure investments in future clear vitality infrastructure, von der Leyen introduced the creation of a “European hydrogen financial institution” that can “assure” the acquisition of hydrogen due to funds drawn from the EU carbon market, the Emissions Buying and selling Scheme (ETS).
The brand new financial institution “will be capable to make investments €3 billion to assist construct the long run marketplace for hydrogen,” von der Leyen mentioned.
It’s anticipated to be modelled on the German H2-International basis, financed with €900 million, which is predicted to enter operation quickly. The financial institution presents a assured worth for hydrogen for as much as ten years by protecting the distinction between manufacturing prices and the gross sales worth.
Electrical energy market reform
Turning to the facility market, von der Leyen emphasised the necessity to “decouple the dominant affect of gasoline on the worth of electrical energy ” as a way to guarantee customers “reap the advantages of low-cost renewables”.
Costs on the EU electrical energy market have soared greater than tenfold since Russian gasoline provides began reducing final 12 months.
“My analysis is that the present electrical energy market design primarily based on the precept of benefit order, will not be match anymore, it’s not match for customers anymore,” von der Leyen mentioned, confirming plans introduced earlier this 12 months to basically redesign the EU’s electrical energy market.
This text was produced by Euractiv and republished underneath a content material sharing settlement.
Supply: Climate Change News