The European Union’s executive branch on Wednesday advised its 27 member states to adopt tax cuts, state aid and other measures to help households and businesses cope with the impact of high fuel prices, which have sparked renewed debate over the use of nuclear power. .
After experiencing months of economic instability due to the coronavirus pandemic, the European Commission wants a quick, concerted response to mitigate the impact of rising prices, especially for people living in poverty or on low incomes.
“Our regulations already allow and even encourage member states to take action. This may seem difficult for member states that are still recovering from the devastation of the pandemic,” said EU Energy Commissioner Kadri Samson.
“However, ETS or Emissions Trading System revenues continue to increase, and we ask member countries to use that additional revenue to address the social impact of fuel price spikes if necessary.”
To help consumers, the European Commission is proposing countries offer income assistance through vouchers, deferred bill payments or partial bill payments, which could be funded through revenue from the EU emissions trading system.
Other recommendations for governments of member countries include providing protection to avoid service outages (electricity and internet), cutting tax rates and providing assistance to certain companies or industries.
The European Commission also wants to seek longer-term measures to prepare the EU for the possibility of such a price shock, including accelerating investment in renewable energy sources and developing energy storage capacity.
Samson insists that the spike in fuel prices is not due to the bloc’s climate policies, nor to the cost of renewable energy.
“I want to clarify. We are not facing rising fuel prices because of our climate policies, or because renewable energy is expensive. We are facing this because the price of fossil fuels is soaring. We don’t have enough cheap and green energy sources for everyone. We need to accelerate the green transition, not slow it down,” he said.
Meanwhile, demand for coal and natural gas has surpassed pre-COVID-19 highs, followed by demand for oil – indicating a retreat from hopes that the pandemic will spur an accelerated transition from fossil fuels to clean energy.
Global coal supply itself is limited, as China, which supplies half of the world’s total production, has tightened safety regulations at mining after a series of accidents, weakening supply.
This causes China to import more coal from Indonesia, leaving less supply for other importers such as India. [rd/jm]