“We are going to propose a solidarity contribution for fossil fuel companies” (…) and “a cap on the income of companies producing low-cost electricity” as is the case with renewable energies, explained the ‘German in a video address.
“Low-carbon energy sources are making massive revenues that don’t reflect their production costs. Now is the time for consumers to benefit from the lower costs of low-carbon energy sources, such as renewables. We will therefore propose to redirect these windfall profits to support vulnerable people and businesses,” she explained.
Stop abusive profits
“The same goes for windfall profits from fossil fuel companies. Oil and gas companies also made massive profits.” The solidarity contribution that will be claimed should be used by Member States to support vulnerable households and invest in clean and local energy sources, added the head of the European executive.
Also as expected, the European executive will also propose to cap the price of Russian gas. The objective is not so much to influence market prices as to deprive Russian President Vladimir Putin of part of the income he uses to wage war in Ukraine. For Ms. Von der Leyen, this objective is also bearing fruit: “at the start of the war, Russian gas by gas pipeline represented 40% of all imported gas; today it is only 9%.
Smart savings
“Smart” energy savings also feature prominently in this plan, with mandatory targets. “We have a global shortage of energy supply. So there needs to be smart demand reduction. (…) We will propose a mandatory target to reduce electricity consumption at peak times”, in collaboration with the Member States.
On the other hand, energy suppliers are faced with high market price volatility. “They are currently being asked to provide funds on an unexpected scale, which threatens energy trading and the stability of derivatives markets.” The Commission therefore wants to make it easier for Member States to support the liquidity of companies in the energy sector: “we will update our temporary framework to allow the rapid provision of public guarantees.”