EU energy ministers will attempt to forge a united response to the energy shock from Russia’s war in Ukraine that has sent prices for electricity and heating skyrocketing.
The invasion has seen the price of natural gas hit record levels, throwing the EU economy into deep uncertainty with all eyes on whether Russian President Vladimir Putin will cut off the energy flow entirely.
Before the war, 40% of the EU’s gas imports came from Russia, with most of the supply going to Germany, but the EU is now scrambling to come up with new ways to heat homes and power factories.
The European Commission will ask the ministers meeting in Brussels to consider a series of highly complex proposals designed to ease the burden.
The main drive will be finding ways to compensate households and businesses that are struggling to pay their bills.
The EU executive will propose a mechanism that would see non-gas electricity companies, such as nuclear, solar or renewable firms, share windfall revenues won on the back of high prices for electric power.
The market price of electricity in Europe is closely linked to the gas prices, meaning non-gas utilities are enjoying a revenue bonanza while those stuck paying for gas struggle.
Fossil fuel companies would also be levied on their profits from the inflated energy prices.
There needs to be a “discussion without qualms” about a potential solidarity levy on “energy companies that make windfall profits in times of war”, said Austrian Energy Minister Leonore Gewessler ahead of the talks.
Another proposal that has broad backing is an idea to rescue electricity companies that are struggling to hedge their spending on the financial markets.
This would be done by relaxing EU rules on state rescues of companies that are suddenly facing more onerous terms for cash as fears of a crisis spread.
The commission will also ask member states to agree on a united way to cut back on energy demand, with mandatory cuts on usage still considered an option, diplomats said.
An idea to cap Russian gas prices however is stalled, diplomats warned, with fears rife that the retribution from Russia would throw the European economy into even further chaos.
Minister for Transport, Climate and Environment Eamon Ryan said he thinks there will be agreement among EU ministers.
Speaking on RTÉ’s Morning Ireland, he said there are three key measures being proposed at today’s emergency meeting, which the Government supports and they match what it has been seeking to do.
“The first is to take some of the revenue, the excess profits that people are making in the electricity market, and take that money to use to help households cut the bills,” Mr Ryan said.
“Secondly, in the gas markets, that similarly we take some of the excess profits to help cover the blow to businesses and householders and also look at a restriction or cap on international gas sales to try and mitigate what the Russians are doing.
“And thirdly, to try and help us to reduce our peak demand which is another way of helping to reduce costs.”
Mr Ryan said that for every country there are slightly different consequences, but from an Irish perspective, it is “right and will help Ireland get it done quickly”.
European Commission President Ursula von der Leyen has urged member states to agree a price cap on Russian gas, a measure that Moscow has warned would be “an absolutely stupid decision”.
The EU’s energy ministers are set to debate the commission’s ideas, with many countries expected to come to the table with their own proposals.
The commission, which draws up laws that are then ratified by member states and the European Parliament, would then formalise the proposal next week.