The heads of state and government leaders of the 27 EU countries have not yet agreed on what the European Union can do about the high energy prices. This became clear after their summit in Brussels, where they talked for about five hours about the peak in energy prices.
The government leaders have asked the European Commission to conduct several studies, including on the possible causes of the price increases, and also on options for joint procurement. Next Tuesday, the European energy ministers will in turn address the peak in energy prices. The government leaders will discuss the topic again during their summit in December.
The government leaders have requested the European Commission and the European financial watchdog ESMA to thoroughly study the functioning of the gas and electricity markets and the trading in CO2 emission allowances. ‘Subsequently, the Commission must assess whether certain trading behavior requires further regulatory action,’ they stated.
The measures that EU countries might take must not come at the expense of the transition to renewable energy sources, said German Chancellor Angela Merkel.
In the short term, the EU countries themselves are best placed to take measures to ease the energy bills for households and businesses, for example through temporary tax relief. Everyone agreed on this. Opinions differ over the longer term.
Countries like Germany emphasize proper market functioning, while Spain advocates for structural measures at the European level to keep the gas price under control. This includes ideas such as collective purchasing or common reserves.
Czech Prime Minister Andrej Babis and his Hungarian counterpart Viktor Orban made the CO2 allowances an issue. Countries like the Czech Republic and Poland want to keep their coal-fired power plants operational and hold speculation and rising CO2 prices partly responsible for the more expensive energy. According to the Commission, CO2 trading accounts for only one-fifth of the price increase.
“The price will rise every day if this stupid plan is not withdrawn,” said Hungarian Prime Minister Viktor Orban. “That is why we must stop or suspend emissions trading. We must return to reality.” The European Commission disputes this. For them, the Green Deal is not part of the problem, but the solution.
Vice-President Frans Timmermans said earlier this week that the trading in pollution rights is only a very minor cause of the rise in energy prices. Not only the heads of state and government leaders are dealing with this, but also, in the coming week, the EU energy ministers.