EU calls for member states to support worst-off amid energy price surge

European Commission suggests giving vouchers, bill payment deferrals or allowing partial payment

The European Commission said the long-term goal is to replace fossil fuels with renewables. Reuters

The European Commission is urging EU member states to reduce taxes, provide aid and defer bill payments to protect consumers and businesses affected by soaring energy prices.

In its advice to the 27 countries, the commission said the situation, which has been blamed on increased demand for energy, required “a rapid and co-ordinated response”.

The commission has been under pressure to act on the looming crisis, even though individual EU governments are more directly responsible for their energy sources and taxation.

In the EU, 20 countries have already planned out emergency measures, including energy tax cuts or subsidies for poorer households.

Brussels also said it will “explore the possible benefits” of EU members jointly buying strategic reserves of gas, an idea put forward by Spain.

The commission said it expects gas prices to remain high over the winter before falling and stabilising in the spring.

“Rising global energy prices are a serious concern for the EU. As we emerge from the pandemic and begin our economic recovery, it is important to protect vulnerable consumers and support European companies,” EU energy commissioner Kadri Simson said.

To help consumers in the short-term, Brussels suggested that countries offer income support through vouchers, bill payment deferrals or partial payments, which can be supported with revenue from the EU's emissions trading system.

Its other recommendations for national governments are introducing safeguards to avoid service disconnections, cuts in taxation rates and aid for certain companies or industries.

But it insisted these proposals must be temporary and targeted.

The commission also blamed “lower-than-expected gas volumes” from Russia, which had tightened “the market as the heating season approaches”.

“Though it has fulfilled its long-term contracts with its European counterparts, Gazprom has offered little or no extra capacity to ease pressure on the EU gas market,” it said, referring to the Russian state-backed company.

“Delayed infrastructure maintenance during the pandemic has also constrained gas supply from Russia and other suppliers.”

Moscow insists it is a reliable partner, with President Vladimir Putin saying it was “very important” to “suggest a long-term mechanism to stabilise the energy market” in what he described as a “difficult situation”.

Ms Simson rejected claims by Hungary that the price increases were related to the transition to greener energy.

“We are not facing an energy price surge because of our climate policy, or because renewable energy is expensive. We are facing it because the fossil fuel prices are spiking,” she said.

In the long-term, she said “the only way to fully decouple gas from electricity is no longer to use it to generate power".

“This is the EU's long-term goal, to replace fossil fuels with renewables.”