Belgium, (Brussels Morning Newspaper) EU ministers agreed to impose energy windfall levies on Friday as part of the bloc’s response to the energy crisis.
The idea to impose levies on windfall profits of energy companies, proposed earlier this month, is part of a broader package of measures, according to Reuters reporting.
Ministers continued to discuss EU plans to address the energy crunch that is contributing to inflation and pushing the bloc towards a recession.
The adopted package of measures includes mandatory reduction of power consumption of 5% during peak consumption periods, the levy on energy companies’ windfall profits in 2022 and 2023, and a tax on extra profits of low-cost electricity producers, among other.
As part of the discussion on further steps, some EU member states proposed price caps on natural gas, which some of their counterparts oppose.
Davor Filipović, Croatian Minister of Economy and Sustainable Development, expressed belief that “all these temporary measures are very well, but in order to find the solution to help our citizens in this energy crisis, we need to cap the gas price.”
Broader cap proposed
Belgium, Greece, Italy and Poland proposed in a note to impose a price cap on wholesale gas transactions, stressing that the limit should be “high and flexible enough to allow Europe to attract the required resources.”
They rejected the EC’s claim that such a cap would require “significant financial resources” if market prices exceed the limit.
Tinne Van der Straeten, Belgian Minister of Energy, stated that the move would require roughly 2 billion euro, in contrast with approximately 140 billion euro expected in windfall levies.
On the other hand, a group of EU member states headed by Austria, Germany and the Netherlands warned that caps would make it more difficult for bloc members to buy gas on competitive global markets.
One EU diplomat warned that the proposal presents “risk to security of supply,” pointing out that flows from Russia are restricted.
The EC proposed to target just Russian gas or natural gas used in power generation with price caps, voicing concerns about broad caps.
Claude Turmes, Energy Minister of Luxembourg, called on the EC to amend state aid rules to put an end to the spending race between bloc members, noting that wealthier bloc members are outspending their EU counterparts in aid provided to citizens and companies.
“That’s the next frontier, to get more solidarity and to stop this infighting,” he concluded.
