The fee’s proposal, which should nonetheless be accredited by member states, says the E.U. ought to tax the earnings of non-gas energy producers once they promote above a sure value level and requires fossil gasoline corporations to pay a “solidarity contribution” from their 2022 earnings. Von der Leyen stated the measures may supply a roughly $140 billion cushion to shoppers.
The proposal additionally requires a compulsory targets of not less than a 5 % discount in gross electrical energy consumption throughout peak hours, protecting not less than 10 % of the hours of every month the place costs are anticipated to be the best.
Von der Leyen predicted that the escalating power warfare with Russia would check the E.U. by means of the months forward “This isn’t solely a warfare unleashed by Russia in opposition to Ukraine,” she stated. “It is a warfare on our power, a warfare on our economic system, a warfare on our values and a warfare on our future,” she advised members of European Parliament.
She stated Russia is “actively manipulating” the bloc’s power market to the purpose that it’s now not functioning, however Europe was preventing again. “I stand right here with the conviction that with braveness and solidarity, Putin will fail and Europe will prevail,” she stated.
The annual speech comes greater than six months after Russia launched its full-scale invasion of Ukraine, upending Europe’s post-Chilly Struggle safety structure and its power technique. The 27-member bloc moved with unusual pace and unity, pulling collectively to hit the Kremlin with unprecedented sanctions and providing monetary and navy help to Ukraine.
However the European Union’s efforts to hit Russia’s warfare machine have accelerated Europe’s power and cost-of-living disaster, sending the value of electrical energy, in addition to meals and different necessities, manner up. There’s a rising concern that Europe is heading for a recession that would result in social unrest within the area and ripple around the globe.
In latest weeks, E.U. officers have held pressing conferences on measures to manage the value of electrical energy and stabilize energy markets, with the fee floating a variety of concepts that might have as soon as been thought of excessive. The European Central Financial institution raised rates of interest final week for the second time this yr in a bid to chill off inflation with out pushing the economic system over the sting.
The White Home is watching the state of affairs carefully. Aides to President Biden have been reviewing their efforts to export liquefied pure fuel to Europe, to find out whether or not there’s any extra manner for American producers to assist. In a go to to Brussels final week, Secretary of State Antony Blinken stated the U.S. won’t “depart our European buddies out within the chilly.”
Since February, the European Union has taken steps to wean itself off Russian power within the identify of limiting Russian income and loosening the Kremlin’s grip on Europe. To some extent, it seems to be working.
Russian pipeline fuel now makes up simply 9 % of E.U. fuel imports, as an illustration, not the 40 % it was in the beginning of the yr. The E.U. reached its objective final week to get fuel shops to greater than 80 % capability nicely earlier than the climate turns in November. Within the quick time period, nonetheless, costs stay excessive and nationwide governments are paying tons of of billions to attempt to preserve individuals afloat.
In her speech, von der Leyen justified the windfall tax on some power corporations by arguing that warfare — and Russia’s deliberate manipulation of power markets — required such a response.
“In our social market economic system, earnings are good. However in these occasions it’s unsuitable to obtain extraordinary file earnings benefiting from warfare and on the again of shoppers,” she stated. “In these occasions, earnings should be shared and channeled to those that want it essentially the most.”
She additionally stated that lowering electrical energy demand in peak our will convey costs down.