The European Fee has warned nations that an EU-wide cap on the worth of fuel used to provide electrical energy may trigger a rise in fuel use and exports of EU-subsidised electrical energy, in line with a doc seen by Reuters.
European Union nations’ vitality ministers meet on Tuesday (25 October) to debate choices to cap EU fuel costs, with nations nonetheless cut up over whether or not and the way to do that after discussing it for weeks.
The doc reveals that the Fee shared with nations an evaluation of a value cap for fuel used to provide energy – a scheme that Spain and Portugal launched this summer time after Russia’s invasion of Ukraine and subsequent cuts to EU fuel provides pushed up vitality prices.
Rolling this out EU-wide – an concept France has championed – may see fuel EU demand rise by as much as 9 billion cubic metres (bcm), the doc stated.
It might additionally require measures to forestall the ensuing cheaper electrical energy from flowing to non-EU nations like Britain and Switzerland that don’t have the worth cap, the doc stated.
Germany and the Netherlands amongst sceptics
The European Fee had initially despatched constructive alerts about extending the Iberian mechanism, which caps the worth of fuel used to generate electrical energy.
“It actually deserves to be thought-about at EU stage,” Fee President Ursula von der Leyen instructed a gathering of the European Parliament in Strasbourg. “There are nonetheless inquiries to be answered however I wish to go away no stone unturned,” she instructed MEPs on 19 October.
However the temper in Brussels appears much less constructive now.
Germany and the Netherlands have warned that value caps to make fuel cheaper may trigger a spike in consumption at a time when nations are racing to avoid wasting gas and substitute Russian deliveries. Russia provided 155 bcm of fuel to the EU earlier than the invasion.
The Fee stated if market fuel costs had been €180 per megawatt hour for a yr, the scheme may yield a web good thing about €13 billion and assist to tame inflation – however that the advantages wouldn’t be evenly unfold. Gasoline costs have tumbled far under that stage in latest days, amid gentle climate and brimming storage tanks.
France – a web importer of gas-fuelled electrical energy – can be the most important beneficiary of the ability sector fuel value cap, the doc stated.
Germany, the Netherlands and Italy, who produce vital volumes of gas-fuelled energy, would face the best prices to fund the scheme, stated the doc, which didn’t specify how the EU-wide mechanism can be financed.
[Edited by Frédéric Simon]
