LUXEMBOURG — Europe’s energy ministers are running out of ideas to protect citizens from surging energy prices as winter approaches. But at a summit in Luxembourg on Thursday, they were clear on one thing: Demanding voters cut back on power use is not an option. European gas prices soared above €100 per megawatt-hour on Wednesday for the first time since 2022, as last-minute panic-buying to fill European gas reserves added to supply pressures linked to the war in the Middle East.
But at the Thursday summit, EU energy ministers broadly acknowledged that both Brussels and national capitals had run out of ideas to contain price pressures. What today is about is actually seeing how we can move to more sustainable measures.” But even crisis management is proving politically difficult. Despite calls by EU energy chief Dan Jørgensen earlier this year to encourage consumers and businesses to cut energy use, European ministers are reluctant to make such a move official policy.
Instead, he called for policy designed to “change behavior” and reduce energy consumption less painfully. Normal households, normal families — they sometimes need encouragement,” he said. But it does not … solve the long-term,” Polish Secretary of State for Energy Wojciech Wrochna told reporters.
High prices “will regulate demand by itself,” Swedish Energy Minister Ebba Busch told reporters. Such was the opposition to demand reduction measures on Thursday, Jørgensen — who was at the summit warning of a "difficult" winter of soaring fuel prices ahead — gave up even proposing it, focusing instead on subsidies. He reluctantly accepted that such subsidies could include fossil fuels as well as clean alternatives, but urged that they be "targeted and temporary." Since the war started, governments have paid €18 billion for tax relief on fossil fuel products, including a controversial move by Rome earlier this month to reduce the impact of gas prices on electricity costs.
European Commission President Ursula von der Leyen warned national leaders against this tendency, urging them at a summit this month to keep policies temporary and targeted to avoid inadvertently increasing fossil fuel demand and distorting the EU single market, according to two EU diplomats familiar with her comments. That remains a point of contention among EU leaders, with some, including Greece, calling for greater fiscal space to increase energy subsidies while others warn of the dangers of subsidizing fossil fuels. Jørgensen did not respond to POLITICO's question at a subsequent press conference when asked whether new fiscal flexibilities were being considered.
Other ideas have gone by the wayside. Von der Leyen rejected calls by countries to establish an EU-wide tax on windfall profits of oil and gas companies at this month’s summit, the diplomats cited above said even as European oil companies like Shell, TotalEnergies and Repsol rake in their biggest profits since 2022. Member countries also questioned the value of a Commission proposal to coordinate the purchase of energy supplies.
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