On 8 March 2022, the EU Commission published the Communication “REPowerEU” containing measures to make Europe independent from Russian fossil fuels well before 2030 as well as to tackle current extreme energy prices.
Europe has been facing increased energy prices for months. However, uncertainty on supply is exacerbating the problem, due to the Russian war of aggression in the Ukraine. As early as October 2021, the EU Commission introduced the “Energy price toolbox” to help Member States mitigate the impact of high energy prices on vulnerable groups. The now proposed Communication provides for additional guidelines, which among other things enable price regulations in exceptional circumstances for Member States. In addition, the Communication specifies how EU countries could redistribute revenue from high energy sector profits and emissions trading to consumers. Furthermore, Member States are now also able to provide short-term support to affected companies by means of state aid.
The EU Commission intends to put forward a legislative proposal by April 2022 that promotes joint gas procurement by Member States, and which provides for gas storage in the EU to be filled up to at least 90 % by 1 October each year. The EU Commission will continue to take action against operators on European gas markets suspected of potential distortions of competition, notably Gazprom. Furthermore, the EU Commission intends to look into all possible options for further emergency measures.
REPowerEU intends to secure the diversification of gas supplies through higher imports of Liquefied Natural Gas along with gas imports from other countries as well as by larger import volumes of biomethane and hydrogen. Apart from that, the departure from fossil fuels shall be accelerated, particularly with regard to residential and commercial buildings and industry. To this end, the Communication proposes to boost energy efficiency, to increase renewables and electrification, and to address infrastructure bottlenecks. According to the Executive Vice-President for the European Green Deal, Frans Timmermans, based on the measures presented in the Communication, the EU could gradually remove at least 155 bcm of fossil gas use in order to reduce gas imports from Russia by almost two thirds by the end of 2022.
AK demands further action in the fight against high energy prices
The AK welcomes the measures presented by the EU Commission, in particular those relating to levying and redistributing surplus profits as well as the monitoring of energy markets in case of distortions of competition. In order to tackle the massive financial burden on consumers due to high energy prices, AK demands to temporary cut VAT on energy in half. The speedy implementation of the Energy and Climate Aid Fund is also required, which is to support energy poor households and to act as a central hub for all stakeholders as well as research in respect of energy poverty. Every energy provider should also have a tariff in its product portfolio, which offers stable and reliable energy prices in the mid-term, and is not directly linked to the development of wholesale or stock prices. It should also be possible to cap energy prices to keep energy affordable, in particular for energy poor households.