The European Union on Wednesday urged member countries to provide aid funds to consumers and small businesses hardest hit by rising gas and electricity prices, as criticism mounts that policies to combat climate change of the block are fueling the problem.
In recent days, France and Spain have led the charge to change the rules governing the EU energy markets as rising prices drive up already high utility bills and put pressure on many people who are already very affected by the coronavirus pandemic.
EU Energy Commissioner Kadri Simson said that “providing targeted support to consumers, direct payments to those most at risk of energy poverty, cutting energy taxes, shifting taxes to general taxes, are all measures that can be taken very quickly according to EU rules. “
“The immediate priority should be to mitigate social impacts and protect vulnerable households, ensuring that energy poverty is not exacerbated,” Simson told EU lawmakers. He said companies “can be helped through state aid or by facilitating longer-term power purchase agreements.”
The EU of 27 countries imports around 90% of its natural gas needs, compared to the US, which produces its own and where prices are lower.
Simson said the EU executive branch, the European Commission, will present a “toolbox” of short- and medium-term measures for countries to take next week. Some countries are interested in establishing a strategic gas reserve for use in emergencies.
Hungarian Prime Minister Viktor Orban pointed to the commission’s “Green Deal” policies to combat climate change, which aim to cut greenhouse gas emissions by 55% by 2030 compared to levels of 1990 and make the trading bloc carbon neutral by 2050.
“The reason the prices went up is the commission’s fault. So we have to change some regulations, otherwise everyone will suffer, “Orban told reporters at an EU summit in Slovenia. It called the Green Deal an “indirect tax” on home and car owners.
But the commission’s executive vice president, Frans Timmermans, said “the EU climate law is our guiding principle, and we will not reopen that law.” He said that “the faster we increase our renewable energy sources, the faster we can protect our citizens against price increases in the area of traditional energy.”
The president of the Spanish government, Pedro Sánchez, urged the commission to “be brave.”
“We are facing an unprecedented crisis that requires the adoption of extraordinary, innovative and firm measures,” Sánchez told reporters. He said the EU should “make a collective gas purchase” and review the electricity pricing system, which, according to him, is undermining the use of renewable energy.
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Joseph Wilson in Barcelona, Spain contributed to this report.