Brussels is these days finalizing short- and medium-term measures, but also structural proposals, to mitigate as much as possible the impact on the wallets of European citizens and companies from the rise in energy prices due to the new conflict in the Middle East. Although Europe does not face an immediate threat to supply security, it cannot afford to let its guard down nor minimize the problems ahead even if the new war ended soon: “We have to act and we have to be quite honest: the situation is bad and it is going to get worse,” warns Energy Commissioner Dan Jorgensen in a meeting held this Wednesday in Brussels with a group of newspapers, including EL PAÍS.
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Since Russia’s war against Ukraine revealed Europe’s energy vulnerabilities in 2022, much has been achieved to avoid being victims again of political instrumentalization of energy sources as Vladimir Putin did—and continues trying to do—with Russian gas, on which the Old Continent was heavily dependent. This has been accomplished not only by reducing consumption and diversifying supply sources but also by strongly betting on renewable energies.
Something that, Jorgensen points out, makes the EU face the new crisis in better conditions than four years ago. But “we are still too dependent on fossil fuels,” he warns. And that is where the problem lies: even in the best-case scenario, if the war ended tomorrow and the Strait of Hormuz reopened, the outlook is “quite bleak.” “Even in that situation, gas prices would not return to normal, probably for years because a lot of infrastructure has been damaged, especially in Qatar. And in the case of oil, although production could resume in two to four weeks, a ship takes a long time to arrive from the region to Europe, so we would have a delayed effect. And this is in the best case,” he insists.
That is why the Commission will present next week a set of proposals both for immediate support—such as imposing at least one mandatory telework day per week in companies, closing public buildings whenever possible, and reducing public transport prices or even making it free for certain groups, according to a draft accessed by EL PAÍS—as well as medium- and long-term measures.
Because it is not only about overcoming this new crisis but also about being better prepared for future shocks. And there, Jorgensen emphasizes, one of the keys is for Europe to advance more quickly and decisively in the electrification process.
“If there is something this crisis teaches us, it is that we must accelerate our transition from fossil fuels to clean energy sources, moving from molecules to electrons. That is the basis of this transition,” he states. But although work has been underway for years, “we are not moving fast enough,” he warns.
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Therefore, beyond immediate measures, the Commission has set to work on another ambitious proposal: “We are going to present an electrification target,” Jorgensen previews. The Dane is cautious, aware that the EU cannot lightly set goals that imply structural changes in the 27 member states and that this is a topic that has been discussed for years. But the time has come, he maintains. And the electrification target, although not yet fixed because it will require negotiations with the states and the European Parliament, “will be ambitious,” he promises.
The Commission also wants to establish a new mantra among community partners: coordination, coordination, and more coordination. Because another lesson from 2022 is the importance not only of applying national measures but that these are coordinated at the European level to be more efficient: “We will monitor, advise, and coordinate the programs used by member states, whether to help vulnerable groups and those sectors of society that cannot pay their bills, or to support industrial sectors that have been heavily affected,” Jorgensen previews.
Coordination is also important, he points out, when assuming national measures in another of the pillars that the European Commission is preparing to mitigate the impact of the crisis: taxes. Although they are “one of the most effective instruments” in crises of this type, the Dane warns against the temptation to lower taxes on fossil fuels, “including gasoline,” as some countries have already done, including Spain: “I understand that some countries consider it necessary and, of course, they have the right; moreover, there may be special national circumstances that make it necessary, but our recommendation is not to do it, as we run the risk of ending up in a situation where this causes an even greater increase in prices and, of course, does not reduce demand either, which would lead us more quickly to a situation of supply security problems,” he notes.
Brussels, however, does recommend lowering other taxes, those on electricity, which in some cases are up to four times higher than on gas, Jorgensen recalls. “If those taxes were lowered, something that can be done very quickly, this would help all citizens and would also have the advantage of supporting the transition we need, with the added benefit of helping to reduce fossil energy demand,” he defends.
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