Europe’s moves to tackle the energy crisis
March 22, 2022 - EU heads of government will likely give the green light to a temporary windfall tax on exceptional profits of energy companies to provide further relief to the most vulnerable consumers. (EU summit scheduled for Thursday and Friday, March 24-25).
The European Commission has floated the option of such a tax in the past weeks. Under current market conditions, oil and gas companies could see excess profits of up to €200 billion ($220 billion) in Europe, according to the International Energy Agency.
According to a draft of their summit statement, EU leaders attending the meeting on Thursday and Friday will likely agree to jointly purchase gas, liquefied natural gas and hydrogen ahead of next winter.
The invasion of Ukraine by Russia, Europe’s top gas supplier, has caused energy prices to soar to record highs and put the EU on a mission to cut Russian oil and gas use this year. The move will require a jump in imports from other suppliers, such as Saudi Arabia, Qatar and the United States.
EU leaders will probably stop short of endorsing intervention in the wholesale energy markets but are expected to pledge to phase out Europe’s dependence on Russian oil and start filling depleted gas storage as soon as possible.
- EU Leaders Poised to Support Taxing Windfall Energy Profits (Bloomberg)
- Europe split on how to spare consumers energy price pain (Euronews)
- Brent Oil Futures -- May 22 (Investing.com)
- Factbox - Europe's efforts to shield households from energy cost spike (Reuters)
- Tackling rising energy prices (European Commission)