On Wednesday, the European Commission presented a package of measures to be implemented by the Member States to combat the soaring energy prices, without derogating from competition rules and European environmental ambitions.
This is the first response from Brussels, while several countries, including France, are campaigning for a complete reform of the energy market in Europe, with an emphasis on nuclear energy.
Without enumerating its entire array, the European Commission presented a "toolbox" to fight against the rise in energy prices, in particular the price of gas. This ranges from temporary and targeted tax reductions for vulnerable households to aids for businesses or industries, in compliance with EU rules on state aid. It also includes allowing temporary deferrals of bill payments or tapping into the EU Emissions Trading Scheme (ETS) to help consumers.
Clarifying the EU text
“The prime minister has announced an increase of €200 per household in the cost of living allowance, in addition to the 10% increase that has already come into force, from1 January on. For my part, I am going to discuss with the minister for the economy, Franz Fayot, to see what can be done for businesses,” assured Turmes.
The latter has also held lengthy talks with the European Commissioner for Competition, Margrethe Vestager, to find out what Luxembourg can do in this area. “In its toolbox, the European Commission has accepted that States provide aids to companies or industries, in compliance with EU rules on State aid. But things still need to be clarified,” Turmes said.
“In Luxembourg, we have a very good aid scheme for investments in energy transition in the industry. In the 'Covid package,’ we also have aids for small and medium-sized enterprises, which ends on 31 December. The question is whether the European Commission's text allows this type of targeted aid to be extended,” said the minister, who is simultaneously working with the EIB on the establishment of a legal framework that could promote standard contracts between an industry and a renewable energy supplier.
In the current crisis, it is somewhat surprising to see a major gas supplier like Gazprom, which controls a large number of storage sites in Europe, at significantly lower than normal storage levels.
Turmes also welcomes the decision of the European executives to review the legislation on gas storage in Europe. “It is a crucial point that will be addressed in December by the commission, namely the revision of the gas legislation in order to regulate gas storage more strictly. In the current crisis, it is a bit surprising to see a major gas supplier like Gazprom, which controls a large number of storage sites in Europe, at much lower storage levels than usual,” the minister said. A few days ago, he sent a letter on the subject to the European Commission.
The minister is also satisfied with the European Commission's position on the possibility for Member States to make joint gas purchases in order to benefit from lower market prices in specific cases.
Currently, the EU has storage capacity for more than 20% of its annual gas consumption. But not all Member States have storage facilities, and their use and maintenance obligations vary.
This story was first published in French on . It has been translated and edited for Delano.