European competitiveness, the EU’s Multiannual Financial Framework and the international geopolitical situation are among the items on the agenda for the heads of state or government of the Member States, meeting at the European Council in Brussels on Thursday 15 and Friday 16 October. On Thursday morning, the leaders will discuss how to respond to soaring energy prices amid continuing attacks on energy infrastructure in the Middle East.
Emergency measures. The underlying message is that there is no ready-made solution to soaring energy prices. Nevertheless, the EU leaders appear to be relying on the European Commission to propose “new measures to address soaring energy prices in the short term”, according to their draft conclusions of 14 October.
Options under consideration include a targeted amendment to the Methane Regulation, an extension of the State aid temporary framework for the industrial sectors most exposed to high prices, the development of a short-term framework to optimise the capacity and efficiency of European refineries, and an initiative to aggregate energy demand “on a voluntary basis”.
The heads of state stress, however, that the EU’s long-term strategy remains unchanged. The “energy transition” and a “well-functioning carbon market (EU ETS)” remain pillars of European energy and climate policy, not least to reduce Europe’s dependence on imports and its exposure to geopolitical upheaval.
The countries most critical of the ETS review – led by Italy and Poland – may try, as they have in the past, to undermine the carbon market’s ambition on the pretext of the energy price crisis.
An EU diplomat says that limiting energy demand, as was done in 2022, could also help ease pressure on prices.
There are, however, no plans to discuss taxing the windfall profits of oil companies, whose margins have surged following the closure of the Strait of Hormuz (see EUROPE 13923/9).
Methane Regulation. In their draft conclusions of 14 October, the EU leaders “welcome the Commission’s intention to propose amendments to the Methane Regulation to postpone the obligations on gas and oil importers” amid soaring energy prices.
Dan Jørgensen, the European Commissioner for Energy, had announced his intention to agree to a one-year postponement, under pressure from a majority of EU Member States, at the informal meeting of energy ministers in Dublin on 29 September (see EUROPE 13948/5).
The Commission formally announced the one-year postponement on Wednesday 14 October, easing the rules for importers further than it had announced last July (see EUROPE 13913/6). Anna-Kaisa Ikonen, the Commission’s spokesperson for energy, said: “We are not giving oil companies a blank cheque here. They will still have to be ready to comply with these obligations from January 2028”.
“This postponement in no way affects the aim of the Methane Regulation, which is to reduce methane emissions”, said Paula Pinho, the Commission’s chief spokesperson.
“The one-year postponement has nothing to do with pressure from the United States”, an EU diplomat said.
To see the EU Council’s draft conclusions: https://aeur.eu/f/nxh
To see the Commission’s proposal on the Methane Regulation: https://aeur.eu/f/nxc (Original version in French by Nadège Delépine)