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Reuters
26-02-2025
- Business
- Reuters
What is in the EU's Affordable Energy Action Plan?
BRUSSELS, Feb 26 (Reuters) - The European Commission announced an Affordable Energy Action Plan on Wednesday to lower electricity bills, help roll out clean energy sources and diversify suppliers. The plan is part of its Clean Industrial Deal that aims to boost clean tech and help energy-intensive industries stay competitive globally. Here are some of the main elements: ELECTRICITY * Push member states to finish revision of Energy Taxation Directive and cut taxes * Decouple retail power prices and volatile natural gas with guarantees from the European Investment Bank for long-term renewable power contracts * Adopt new rules to develop European forward markets and increase hedging options, which are lacking for renewable energy * Push countries to adapt and speed up permitting regimes by mid-2025 for renewable power projects that can take a decade to complete * The Commission will propose a Grid Package in 2026 GAS * Propose to aggregate liquefied natural gas demand for EU companies to secure long-term deals, potentially by investing in infrastructure abroad * Gas Market Task Force to ensure well-functioning market to conclude by the fourth quarter 2025 * Crack down on manipulation with cooperation on enforcement and data sharing between EU energy agency ACER and EU financial regulator ESMA ENERGY UNION * Electrification Action Plan in the first quarter, 2026, to help decarbonise industry, transport and heating * Roadmap to digitise and use AI in the energy sector * Tackle investment gap with incentives for private capital with a Clean Energy Investment Strategy * Boost innovation through various action plans and a study of nuclear financing needs to potentially build out small modular reactors
Euronews
19-02-2025
- Business
- Euronews
European Commission urges end to tax reform deadlock in energy cost-cutting plan
T he European Commission 'stands ready' to help EU governments reach an agreement on reforms to the Energy Taxation Directive proposed back in 2021, according to a leaked draft of an action plan to cut energy costs that put Europe at a disadvantage with competitors China and the US. But with tax matters one of a handful of EU policy areas where legislation requires the unanimous backing of all 27 member state governments, reform is proving hard to achieve. Talks in the EU council have been deadlocked for years, with countries divided notably over whether the airline and shipping industries should continue to enjoy tax-free fossil fuels. 'The Council should conclude the revision of the Energy Taxation Directive ('ETD'), proposed in 2021, which aims at aligning the taxation of energy products with EU energy and climate policies, promoting clean technologies and removing outdated exemptions and reduced rates that currently encourage the use of fossil fuels,' the leaked text runs. Among the proposed reforms is tax relief for low-income households. The European Parliament's industry and energy committee adopted an opinion on the proposal Wednesday, calling for the EU to bolster the reform with measures to 'incentivise local self-production, storage, sharing, and consumption of renewable energy'. But the committee's role is merely advisory, and although the prerogative lies ultimately with the EU Council, the reform cannot go ahead until the parliament's economy committee also adopts its own position on the proposal. The draft cost-cutting plan – seen by Euronews and due to be published in its final form on 26 February alongside a flagship Clean Industrial Deal – promises guidance for governments on how to reduce electricity levies to the lowest possible under the current regulations. It also looks for non-taxation approaches, for example by promoting demand reduction to reduce price spikes during times of peak electricity demand, and a market based approach to incentivize energy efficiency improvements. The Japanese model Another mooted approach to reducing energy costs is 'demand aggregation' for imports of liquefied natural gas, with EU buyers able to 'leverage their economic weight' to push for lower prices in joint purchasing agreements. The draft plan goes further, however, suggesting adopting a 'Japanese model' where European countries could invest in export facilities in gas producing countries to build up links with suppliers. One of the paradoxes during the energy crisis of 2022 was that electricity prices hit record highs even when the bulk of power in the grid was coming from renewable sources like wind and solar, which last year overtook fossil fuel-fired generation. This is due to a market mechanism where the most expensive ingredient in the mix sets the price. Hastily introduced reforms introduced caps and empowered governments to intervene with support for consumers, but did not change the fundamental structure of the system, and the draft text suggests there are no plans to revisit the market design. Instead, the Commission wants to 'decouple retail electricity bills from high and volatile gas prices' in part by making it easier for firms to strike long-term power purchase agreements with renewable power operators, launching before the summer a collaboration with the European Investment Bank, which is to provide an as yet unspecified amount of financing.
