EU Chief Wants Windfall Profits Of Energy Producers To Ease Pain Of Consumers
A top European Union (EU) official unveiled a plan Wednesday to cap the revenue of electricity producers that are making extraordinary profits because of the effects of Russia’s war in Ukraine and climate change, saying the proposal could raise $140 billion to help people hit by spiraling energy prices, Lorne Cook and Samuel Petrequin reported for the Associated Press (AP).
Photo Insert: EU Commission President Ursula von der Leyen
It’s one of several proposals aimed at containing an energy crisis in Europe that could lead to rolling blackouts, shuttered factories, and a deep recession this winter. Others include slashing energy use and reforming the electricity market, which all need approval by the 27 EU countries.
As the bloc supports Ukraine, Russia has reduced or cut off natural gas to 13 member nations, surging gas and electricity prices that are expected to go higher as demand peaks during the cold months.
Europe also has been hit by a drought that experts say is the worst in 500 years. Prices for natural gas — which is used to power industry, heat homes, and generate electricity — are now 10 times higher in the EU than before COVID-19 took hold in 2020.
“Russia keeps actively manipulating our energy market,” European Commission President Ursula von der Leyen told EU lawmakers in Strasbourg, France. “So, this market is not functioning anymore,” Raf Casert also reported for AP.
Individual countries have passed subsidies, tax cuts, and other relief for households and businesses as high energy prices drive record inflation. But with economies still recovering from the pandemic, money must be found outside of national budgets to provide more help to millions struggling to pay their electricity bills.
That’s why the commission wants to tap the profits of power producers using oil, gas, and coal as well as renewables and nuclear power. It estimates that some companies are making five times their usual profits.
“These companies are making revenues they never accounted for, they never even dreamt of,” von der Leyen said. “In these times, it is wrong to receive extraordinary record revenues and profits benefiting from war and on the back of consumers.”