The EU member countries found in the extraordinary Energy Council in Brussels the political agreement on a package of measures against expensive energy and to counter the increase in gas and electricity prices. The agreement provides for mandatory energy savings in the peak periods, a ceiling on the revenues of companies that produce electricity from cheaper gas sources, such as nuclear, coal and renewables, and a solidarity contribution to be paid by oil and gas companies , which are making big profits in recent months, thanks to the increase in fossil fuel prices. “Today we have added some pieces to the puzzle, but they are certainly not the last,” said Czech Energy Minister Jozef Sikela, for the current presidency of the EU Council. Member States will have to identify time bands in which consumption is at its highest in the period from 1 December 2022 to 31 March 2023, to reduce it by at least 5% compared to the average of previous years, while pursuing an overall objective, not mandatory but optional, to cut overall gross consumption by 10%. The energy savings thus devised should lower the demand for the most expensive source, gas. For the so-called inframarginal companies, that is, which produce electricity from cheaper sources than methane, a revenue ceiling of 180 euros per megawatt hour is set. For the oil and gas companies and those active in refining, a solidarity contribution is instead envisaged, to be calculated on the profit in 2022 or in the fiscal year 2022-23 depending on the calendar, where this exceeds by at least 20% the average earnings made since 2018. The rate will be “at least 33%,” Sikela said. Both measures, explains Energy Commissioner Kadri Simson, aim to give states “resources” with which to deal with the consequences for citizens and businesses of the sharp increases in gas prices, aggravated by the war in Ukraine. The package on which the political agreement was reached today will not be enough to bring gas prices back under control: Simson herself said that “more must be done” and that “EU-wide market interventions are needed to reduce gas prices. gas”. It is necessary to “limit the premium” that is paid for methane delivered by pipe, but with “reliable” partners such as Norway and Algeria it is not possible to proceed “unilaterally” in reducing prices. Some countries are reluctant to apply price caps. unilateral vis-à-vis partners such as Norway, which have greatly increased gas deliveries to the EU, helping it to compensate for shortages of Russian methane: “This is not how we do business”, underlined an EU diplomat. Simson also reiterated that the executive is working on a “temporary” measure at the EU level that limits the price of gas used to produce electricity. However, the price should be limited to an extent that does not increase gas consumption, a balance that is not easy to achieve. “They are deep intervention measures and we do not propose them lightly,” Simson stressed. Ministers asked for “reassurance”, Sikela said, on the “timing” with which the Commission will make proposals, given that imposing a ceiling on the price of gas (not only on Russia, but also on others) has now been talked about for several months (Mario Draghi has been insisting on this point for some time), but so far nothing has been decided at EU level on the matter. In the non-paper prepared for today’s Council, the Commission opens only to a possible price cap on Russian gas which, as Cingolani also said, now “supplies a fairly low percentage” of the gas imported from Europe. Furthermore, as the German minister Robert Habeck noted, it would be “a sanction” and it would not be up to the energy ministers to decide it. It is an interpretation on which, Cingolani reported, “almost all” countries converge. The Commission’s hesitation is due, in addition to the fear of touching market mechanisms that have worked well for “many years”, as Sikela recalled, also due to the fact that the member countries are deeply divided on this issue: the Commission, Simson said, he makes legislative proposals if they are able to find a “consensus” in the Council, not to have them rejected. If he did otherwise, he would have a “divisive” approach, he stressed. It is true that 15 member countries have written to the Commission asking it to present a proposal for a cap on the price of gas, but 15 countries, even if there are many, are 12 less than the totality of EU members. And therefore, as Minister Cingolani reported, the ministers of the most energy-intensive countries, which account for 80% of consumption, began to work, “from 7 am”, to try to overcome the divisions, which have lasted for months. , on the measures necessary to contain gas prices. Cingolani explained that it is thought, rather than a fixed ceiling, that the market would be viewed with distrust, a price range, an oscillation band to prevent market variations from going “out of control”. One hypothesis is that to unhook the price of gas from TTF, the European benchmark for the price of methane, and to anchor it to a broader basket of indices, such as Henry Hub, the American gas benchmark, and Brent, the future on the crude oil from the North Sea, a benchmark for the price of oil in Europe. For Simson, unhooking the price of gas from the TTF is one of the “key areas” on which action needs to be taken. The ministers’ work, which will continue on Monday morning with a videoconference, will serve the leaders who will gather in Prague next week for the informal European Council. Cingolani spoke of “bullet points”, “pillars” that the ministers will agree on and that they will pass on to the leaders, who in turn will discuss them next week in the Castle of the Czech capital. All of this should allow the Commission to present a legislative proposal on the subject, which it has not done so far, also due to the deep divisions between the Member States. “We all agree that the markets are not functioning properly and that action is needed,” said Simson, but interventions must be carefully calibrated, given that one of the reasons why Europe has so far managed to secure gas on the markets World Cup is that it pays more than the others. Therefore, the measures must maintain the “security of supplies”, but they must also cut demand, with energy savings. The ministers also asked the Commission to extend the temporary framework on state aid, to allow countries to intervene in support of families and businesses, something that the EU executive should propose towards “mid-October”, Sikela said. he hopes that it will accelerate with joint gas purchases, which are another way to lower prices. Denmark, Sweden and Germany then informed their colleagues about what happened to the Nord Stream 1 and 2 gas pipelines, which lose methane due to some underwater explosions, the result of a “deliberate act”. As the EU “we are united: any deliberate disturbance to critical infrastructures is unacceptable and will receive a harsh and unified response”, reiterated Sikela. The energy crisis that is affecting Europe, however, is not destined to end soon: as the Irish minister Eamon Ryan said, it will last at least “two years”, because in the spring it will be necessary to replenish stocks for the winter of 2023-24. Meanwhile, German Green Minister Robert Habeck stressed that in Europe we must “become much faster with the approval and expansion of renewables”, which provide self-produced energy. In the Old Continent, which the Anglo-Saxons consider the reign of ‘red tape’ (laces and snares), bureaucracies continue to hinder the construction of new wind and solar plants. And winter 2023-24 is not that far off.
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