Von der Leyen proposes asking energy companies for a "solidarity contribution"

The European Commission has appealed today to "unity and solidarity" as the only ways to deal with the current energy crisis caused, as its president, Ursula von der Leyen, has denounced, by the "active manipulation" of the gas markets by from Moscow, which has led to "astronomical prices" for electricity.

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NewsEditor
07 September 2022 Wednesday 06:30
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Von der Leyen proposes asking energy companies for a "solidarity contribution"

The European Commission has appealed today to "unity and solidarity" as the only ways to deal with the current energy crisis caused, as its president, Ursula von der Leyen, has denounced, by the "active manipulation" of the gas markets by from Moscow, which has led to "astronomical prices" for electricity. Among his proposals to deal with the consequences of the crisis in the short term, he highlights taxing the extraordinary profits that energy companies are obtaining due to high market prices. Those revenues should go to support the most vulnerable households and struggling businesses, Brussels proposes.

"We are proposing a revenue cap for companies that produce low-cost electricity. Low-carbon energy sources are receiving windfall profits that do not reflect their production costs. It is time for consumers to benefit from low costs of low-carbon energies, such as renewables", defended Von der Leyen. According to the memorandum prepared by the Commission services, the cap should be around 200 euros per megawatt hour, half of what is currently paid, for example, in the German market. From that amount, the price set by the market would be redistributed to households and businesses that need it.

According to the proposals of the European Commission, the cap on corporate profits should also apply to fossil fuel companies, as they are also benefiting from windfall profits. Von der Leyen will present this afternoon the Commission's responses to the ambassadors of the 27 member states ahead of the extraordinary council of European energy ministers convened for Friday.

The emergency intervention detailed today by Von der Leyen, as La Vanguardia has advanced today, rests on several more pillars. First, the adoption of a plan to save electricity consumption. "What has changed this summer is that the global energy supply is scarce. This forces us to intelligently reduce demand, we need a strategy to reduce the peaks [of consumption] that determine the price of electricity", he explained. the president of the Commission.

The other key measure is the adoption of a cap on the price of gas that the EU buys from Russia. "The objective is very clear: we must cut off the revenue that Putin uses to finance his heinous war machine against Ukraine," said von der Leyen. Russia has warned today that it will not sell gas to any country that fixes in advance what maximum price it is willing to pay. The loss of Russian supply is a risk that community technicians warn that European governments must be willing to assume, although in reality this is already the current situation at the will of the Kremlin, which conditions the reopening of the tap to the suspension of Western sanctions . Brussels is studying the implications of applying this measure also to the liquefied gas (LNG) sector, which does not rule out proposing but with caution given the risk that suppliers change the routes of their ships.

Von der Leyen highlighted the progress made in recent months in the search for alternative gas suppliers such as the US, Norway, Algeria and Azerbaijan, among others, which has allowed, in part, that while before the war the 40 % of the gas imported by the Union came from Russia, now this percentage is only 9%. But the voluntary closing of the tap by Moscow also explains this fall. A fact that the President of the Commission has not mentioned but that appears in the preparatory technical documents is that, in recent months, although the amount of Russian gas sold to Europe has fallen by 40%, Moscow's income has increased by 4 % due to exorbitant market prices.

"We live in hard times, but I think that we Europeans have the economic strength, the political will and the necessary unity to continue playing with an advantage", assured the community leader, trying to encourage the European population in the face of a winter that can be cold in the houses and hot in the street before the wave of protests that is coming due to the loss of purchasing power of the citizens.

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