EU countries approve energy windfall levies, turn to gas price cap

BRUSSELS (Reuters) – European Union nations on Friday agreed to impose an emergency tax on the windfall profits of energy companies, starting talks on next steps to tackle Europe’s energy crisis did. gas price cap.

Ministers from 27 EU member states met in Brussels on Friday, where they approved Proposed countermeasure Earlier this month to curb soaring energy prices that are fueling record high inflation and threatening a recession.

The package includes a tax on surplus profits of fossil fuel companies this year or next, another tax on surplus revenues earned by low-cost generators from rising power costs, and a mandatory 5% reduction in peak power usage. % reduction included.

With the deal in place, countries began discussing the EU’s next move to contain the price crisis on Friday morning. Many countries want a broad cap on gas prices, but others, especially Germany, remain opposed.

Croatia’s Economy Minister Davor Filipović said at a meeting on Friday: “All of these temporary measures are working very well, but we will continue to push gas prices to find solutions that will help our citizens in this energy crisis.” need to be suppressed,” he said.

Fifteen countries, including France, Italy and Poland, called on Brussels this week to propose a price cap for all wholesale gas transactions to curb inflation.

Belgium, Greece, Poland and Italy said in a note outlining their proposals seen by Reuters on Thursday that the ceiling would be set at a level “high enough and flexible enough to allow Europe to attract the resources it needs”. should.

Countries will need “substantial financial resources” to finance emergency gas purchases to widen gas price caps if market prices exceed the EU cap, the Commission argues. objected to.

Belgian Energy Minister Tinne van der Straten said most European imports fall under long-term contracts or arrive in pipelines with no easy alternative buyers, resulting in €2 billion ($1.96 billion). ) is needed.

This is only part of the €140 billion unexpected profit charge for energy companies expected by the EU.

But Germany, Austria and the Netherlands, among others, have warned that a significant increase in gas price caps could make it harder for countries to buy gas if they are unable to compete with buyers in a price-competitive global market. there is

A diplomat from one EU member state said the idea was a “supply problem” as Europe headed into the winter with tight energy supplies after Russia cut gas supplies to Europe in retaliation for Western sanctions for its invasion of Ukraine. “The risk to the safety of

The European Commission also questioned it, instead proposing that the EU should proceed with narrower price caps for Russian gas only, or specifically for gas used for power generation.

“We must set a price cap on all Russian gas,” said Kadri Simson, the EU’s head of energy policy.

Brussels put forward the idea earlier this month, but met resistance from central and eastern European countries fearing it would retaliate by cutting off the remaining gas Russia is still sending.

By introducing EU-wide measures, Brussels hopes to layer the government’s uneven national approach on the energy crisis.

Germany, Europe’s largest economy, set a €200bn package on Thursday to combat soaring energy costs, including curbing gas prices.

Luxembourg’s energy minister, Claude Turmes, has called on Brussels to change the EU’s state aid rules to end a “crazy” spending competition between countries.

“That’s the next frontier: to get more solidarity and stop this infighting,” Turmes said.

($1 = 1.0182 Euro)

Reporting by Kate Abnett and Gabriela Baczynska. Additional reporting by Philip Blenkinsop, Bart Meijer, and John Chalmers. Edited by Jan Harvey

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