European Commission announces a series of actions to address the energy price spike that sent European bills skyrocketing.
Proposals included the acceptance of tax cuts as well as the purchase of joint fuel supplies by EU members.
For many reasons energy prices reached record highs, including the high demand for natural gases as countries recover from the Covid-19 pandemic.
Pressure has been placed on the European Commission to address the crisis of price.
Since January, the wholesale gas price has risen by 25%. This is causing a spike in prices for both consumers and businesses.
Kadri Simonson, chief energy officer of the Commission said Wednesday that an EU executive had responded to demands for action, unveiling an “energy pricing toolbox”.
It outlines the steps members can take to decrease their country’s energy bills, without breaking EU law. While the toolbox largely confirms those measures which national governments are already able to use, the document also examines the possibilities for what additional actions the Commission might be able to take.
Ms Simson stated that member countries were the best in easing the pressure of increasing energy prices, as winter draws near.
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She encouraged EU nations to look into emergency income assistance for families with vulnerable children, aid for small businesses, and tax reforms.
The member states were also advised by her to suspend their bill payments if necessary and set up safeguards to prevent grid disconnections.
“Rising energy prices around the world are very concerning for the EU,” said Ms Simson. As we move on from the pandemic, and start our economic recovery it’s important to help vulnerable consumers as well as support European companies.
In addition to these measures, Ms Simson stated that the Commission will examine the potential benefits of EU nations buying natural gas together.
Ms Simson stated that countries could buy gas together to make a strategic reserves. However, voluntary participation is possible, similar to the co-purchase of Covid-19 vaccines in case there was a pandemic.
This idea was recently proposed by Spanish and other governments who want greater EU intervention.
All member states were encouraged to use the EU’s €750bn (£636bn; $867bn) Covid-19 recovery fund to invest in clean energy to meet the bloc’s climate targets.
Ms Simson stated that there is no surge in demand because of her climate policy. “Fossil fuels are on the rise. It is important to accelerate the transition from fossil fuels to green.
These are just a few of the many possible reasons. Countries are trying to rebound from the pandemic. This has led to a rise in energy demand, which is putting pressure on global supplies.
China is the country that has enjoyed the highest demand for liquefied gas. It’s also trying to find cleaner fuels in order to decrease its carbon footprint.
Other issues in Europe have exacerbated the situation, creating an energy market storm.
One example is the cold winter last year in Europe, which put strain on supply, leaving gas stock levels lower than usual.
The grid has also been affected by low wind speeds.
Europe has been hit hard by the energy crisis, which highlighted its dependence on Russia as one of Europe’s largest gas suppliers.
Critics claim Russia deliberately withheld supplies to force Germany to approve the controversial Nord Stream 2 pipe, bypassing Ukraine.
All of these factors combined have pushed up global wholesale gas prices.
On Wednesday, however, Vladimir Putin of Russia denied that his country used energy for weapons.
He described these claims in a speech at the Moscow energy forum as “complete garbage, drivel and politically motivated tittle-tattle”.
Putin claimed that Europe was responsible for the gas crisis. He said Europe had failed to store enough gas after having a cold winter.
Additionally, he stated that it was important to propose a long-term mechanism for stabilizing the energy market.