EU Commission wants to skim off random profits from energy companies
Die EU Commission gets serious and proposes a price cap for Russian pipeline gas. Commission President Ursula von der Leyen announced on Wednesday in Brussels that the Commission will present a corresponding legislative proposal on Tuesday next week. “The goal here is clear: we must reduce Russia’s revenues, which President Vladimir Putin is using to fund his savage war against Ukraine,” she said.
The government must withdraw from Putin’s threat to then completely stop gas supplies EU don’t be impressed. Putin has already partially or completely stopped gas supplies to 13 member states. “We see that he prefers to flare the gas,” said the Commission President. His threat is therefore not a surprise. “She would have come sooner or later anyway,” von der Leyen continued.
Putin had recently threatened to stop deliveries at the economic forum in Vladivostok. Capping prices “would be an absolutely stupid decision,” Putin said there. Russia will “supply nothing more”, he continued, “no gas, no oil, no coal” – if the deliveries are not in the economic interest of the country. Von der Leyen said that the “persistent preparatory work” of the past few months is now paying off.
The EU has made itself independent of Russian gas
At the beginning of the Ukraine war, Russian pipeline gas accounted for 40 percent of EU gas imports, today it is only 9 percent. EU energy ministers are now due to discuss the proposal in detail at their special meeting in Brussels on Friday. The Commission will then finalize the legislative proposal.
The EU Commission had already listed various options for this in an internal working paper (“non-paper”). The upper price limit is to be set in such a way that Russia can still earn money with the sale of the gas. The price that the EU paid between 2010 and 2020 could be used as a reference. That would be between 5 and 35 euros per megawatt hour. Today the price is up to ten times higher.
Von der Leyen announced that the commission is also examining a price cap on other gases, including those often imported from the United States liquefied gas (LNG). “The EU must ensure that no extraordinarily high prices are paid here either. Unlike the Russian pipeline gas, however, LNG can be diverted to other customers. You have to take that into account.
The President of the Commission expressed the hope that the price cap on Russian gas would influence the very high gas price within the EU. However, the pressure on the price is great all over the world due to the lack of energy.
Extra profits should be skimmed off
Von der Leyen therefore announced a number of further steps to relieve the consequences of high gas prices for households and industry. This includes the proposal to skim off the “extra profits” that operators of wind farms, solar parks and nuclear power plants are currently making because the high price of gas is also driving the price of electricity to new heights.
The proceeds are to flow specifically to households and companies that are particularly affected. The oil and gas companies, which are currently making big profits, should also pay a solidarity levy. Finally, von der Leyen announced a proposal to reduce power consumption. The Commission will present mandatory savings targets for peak consumption periods.
If consumption can be reduced at this time, the EU can do without starting the expensive gas-fired power plants for the production of electricity. Finally, the Commission will make it easier for Member States to give energy suppliers liquidity support. You currently have to hold unexpectedly large amounts in order to be able to operate on the market, said von der Leyen. This affects their ability to trade and thus also the stability of the markets.
