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Tags: Europe | Energy

EU Ministers Debate How to Tackle Rising Energy Costs

EU Ministers Debate How to Tackle Rising Energy Costs

Tuesday, 26 October 2021 06:01 AM

BRUSSELS (AP) — European Union ministers met Tuesday for emergency talks focusing on energy amid deep divergences between the 27 member countries on how to tackle a crunch that has seen consumers' bills skyrocket this year.

The wave of price hikes is not set to abate before next spring, and ministers discussed a set of short-term measures that have been put forward by the European Commission to help consumers and businesses weather the shock.

The main reason behind the sharp spike is increased global demand for energy, and gas in particular. According to EU officials, gas prices in Europe have increased by more than 170% since the start of the year.

Although most member states agree tax cuts, state aid and other measures put forward by the EU's executive arm to help households and businesses are beneficial to bring immediate relief, they diverge on the long-term approach.

“We have received different messages from different member states," said Kadri Simson, EU commissioner for energy. “I do hope to hear clear messages from ministers — what are their expectations? If we are talking about medium-term measures, this also means that we have to start acting right now, despite the fact that the results of those actions will be foreseen in years to come, not the next two weeks.”

A line has been drawn between the countries calling for a thorough and structural reform of the bloc’s energy market — among them France and Spain — and those who believe the crisis is only temporary and does not require radical market changes.

Nine European Union countries, including heavyweight Germany, have joined forces to say they will not support an overhaul of the electricity market ahead of the ministers' meeting.

Luxembourg, Austria, Germany, Denmark, Estonia, Finland, Ireland, Latvia and the Netherlands said transparent and competitive markets are what guarantee better prices for users. They called for the deployment of renewable energy sources and “further interconnection.”

Meanwhile, Spain is pushing for changing the way wholesale electricity prices are calculated, while France — which derives about 70% of its electricity from nuclear energy — has called for decoupling electricity and gas prices. The French argue that the influence of gas in setting wholesale electricity prices is disproportionate.

Spain also has proposed setting up a joint program for obtaining gas reserves, but the idea has not gained much support so far. Europe depends heavily on imported gas, mainly from Russia.

EU countries have asked the commission to look into the bloc’s emissions trading program, which has companies pay for carbon dioxide they emit. The aim is to check whether manipulation of the market could have influenced carbon price increases.

Longer term, the commission wants the EU to prepare for a repeat of such price shocks by accelerating investment in renewable energy sources and developing energy storage capacity.

The energy squeeze has reignited a debate about whether the EU should promote nuclear power projects as a way of becoming more energy independent. The bloc has yet to decide whether nuclear can be included in the so-called taxonomy, a classification system attempting to define what economic activities can qualify for sustainable investment while avoiding “greenwashing."

France recently asked for the inclusion of nuclear power in the framework by the end of the year, leading the charge with nine other EU countries. The group faces strong opposition from Germany and other countries that want nuclear power to be ineligible for green financing.

© Copyright 2021 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


GlobalTalk
European Union ministers met Tuesday for emergency talks focusing on energy amid deep divergences between the 27 member countries on how to tackle a crunch that has seen consumers' bills skyrocket this year.The wave of price hikes is not set to abate before next spring, and...
Europe,Energy
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2021-01-26
Tuesday, 26 October 2021 06:01 AM
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