European Union: ways to lower energy prices

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The leaders of the European Union will meet this Thursday and Friday in Brussels. Among the subjects to be discussed: the rise in energy prices and more particularly that of gas. The leaders will debate the measures that the European Commission has already unveiled to cushion the price hike.

Last week the European Commission unveiled its panoply of temporary measures suggested to member states to deal with the energy crisis. In particular, the Commission is encouraging governments to lower heavy taxes on energy, such as that on fuels, and to support households, either through vouchers, energy vouchers or bill deferrals.

To compensate for this shortfall, Brussels suggests that States tap into the revenue from the carbon market. It is on this market that energy suppliers buy “rights to pollute”, and the price of CO2 has now risen sharply. According to the Commission, this rise in carbon dioxide prices has enabled Member States to collect a total of 26.3 billion euros in revenue over the first nine months of 2021, or almost 11 billion more over one year. In the longer term, Brussels is considering ways to strengthen European gas reserves and is studying group purchases by the States.

The European Union currently has a storage capacity which represents more than 20% of its annual consumption, while knowing that certain countries of the Union do not have storage facilities. Larger reserves would have made it possible to attenuate gas prices in Europe. Another avenue for lowering energy prices, that of France to remove the coupling between gas and electricity prices, will also be studied.

It remains to be seen how the European leaders will react to these proposals, especially since they are not all on the same wavelength.


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