The E-Waste Column no. 194

Apr 22
3 min read

Today, we are looking at measures the European Commission has planned to reduce energy prices.

🌱 What policy measures are planned?

The Commission is currently working on several measures to try to provide “immediate relief” to the high energy prices in Europe. According to the Financial Times, the Commission plans “to reduce demand, improve energy efficiency and help move to clean power”. The Commission plans to set new targets for electrification, that involve assisting EU member states in developing “social leasing schemes for clean and efficient technologies” such as electric vehicles, heat pumps, and small-scale batteries. Beyond this, there are plans to encourage remote working by moving EU-based businesses to make sure that there is “at least one day of compulsory remote working where possible”. There are also plans to provide “public transport subsidies to cut fossil fuel use” and to lower the VAT on boilers, heat pumps, and solar panels in the EU.

🌱 What new electricity market rules are planned?

To decrease the cost for the transportation of electricity in the EU, the Commission plans to pass laws to adjust electricity market rules. According to two recent legislative proposals, there are plans to track different grid operators’ cost-effectiveness and then use this information to ensure electricity is taxed at levels below those of fossil fuels and to adjust the charges for heavy industry. In this context, the Commission plans to “help member states design price cap and income support schemes, and assess windfall taxes from member states”. Member states are also to be given “the flexibility to zero-rate the level of electricity taxes paid by energy-intensive industries”.

🌱 Is there sufficient long-term planning?

The Commission says the new measures it has planned are a part of its broader efforts to reduce the reliance on fossil fuels and advance the use of green energy. Yet, according to the Financial Times, the current plans of the Commission to tackle the higher energy prices in light of the war in the Middle East are mostly “based on measures implemented during the previous energy crisis sparked by Russia’s invasion of Ukraine”. In other words, these are foremost short-term emergency measures – and not far-reaching changes to Europe’s energy system designed to mitigate long-term risks. Some experts, such as Professor Andreas Rasche from Copenhagen Business School, therefore say that it seems like the EU has developed a sort of “emergency clean energy mode”, while treating broader environmental and energy measures as a too large “administrative burden” to undertake.

🌱 What policies have been weakened recently?

Over the past 12 months, the Commission has taken several larger steps that effectively weakened the policy ambitions of the EU on sustainability and the energy transition. The Commission has, for example, exempted 41 000 businesses from mandatory emissions reporting, it has weakened the agreed 2035 combustion engine ban, and it has once again postponed the EU’s deforestation regulation. The Commission has also delayed the new emissions trading system for buildings, road transport, and additional sectors called “ETS2” from 2027 to 2028, and it has adopted a new climate goal for 2040 (that now allows for the use of carbon credits).

💬 What measures do you think could help increase energy sovereignty and security in Europe? Share your thoughts in the comments.