Concerned about the socio-economic consequences of the current surge in energy prices, the Greek delegation sent a briefing note to the other EU Member States on Wednesday 29 September, calling for a “temporary hedging mechanism” linked to the EU Emissions Trading System (ETS) to support European citizens.
This mechanism, fed by the revenues of the ETS system, “could be a possible way to address the increasing cost to be borne by EU citizens”, according to the Greek delegation.
Greece proposes to finance it through an additional one-off auction of allowances or through the advance payment of expected future revenues from the ETS. It estimates the amount needed for the winter of 2021-2022 at around five to eight billion euros.
Allocations to Member States would be calculated on a pro-rata basis, taking into account heating and electricity consumption and GDP per capita.
The use of this mechanism should be strictly limited to exceptional situations of price volatility, the Greek note further states.
How will this impact the ‘Fit for 55’ package?
For its part, the European Commission had announced the presentation, in the coming weeks, of a “toolbox” intended to guide the implementation of national measures by the Member States (see EUROPE 12796/9).
Asked on Friday 1 October about the potential impact of rising energy prices on the adoption of its ‘Fit for 55’ climate package and, more specifically, on the proposed revision of the ETS, the institution stressed the importance of separating two issues: (1) the temporary energy price situation, which “is driven very much by the global gas markets and some other seasonal issues and temporary measures”; (2) the green transition and the ‘Fit for 55’ package, which “is obviously a much more longer term project”.
The Commission spokesman added: “Renewables continue to produce the cheapest electricity at the moment. So, in a sense if we go further down the road with the green transition and the Green Deal, the challenges that we have at the moment - which are due to global markets for fossil fuels - will not be as pronounced as they are now”.
The issue of surging energy prices will also be the subject of multiple discussions next week at EU level: at the meeting of euro area Finance Ministers (4 October); in the margins of the summit between the EU and the Western Balkan countries (6 October); at the meeting of Member States’ Environment Ministers (6 October); and at the plenary session of the European Parliament (6 October). It should also be discussed at the European Council on 21-22 October (see EUROPE 12801/33).
See the Greek note: https://bit.ly/2Yggr3p (Original version in French by Damien Genicot)