European Union leaders are likely to give the political green light to a European Commission proposal to consider imposing a temporary tax on the extraordinary profits of some energy companies from skyrocketing gas and electricity prices, according to Bloomberg.
The two heads of state are due to discuss during a two-day summit on Thursday how to offer further support to the most vulnerable consumers and how to support European businesses amid an unprecedented energy crisis exacerbated by Russia’s invasion. in Ukraine, reports the agency.
Leaders will discuss the commission’s proposals to mitigate the impact of the price spike, possibly backing the use of a new state aid framework, according to a draft statement seen by Bloomberg.
“As the Commission proposes, the temporary taxation of extraordinary profits can be a useful source of funding,” the text said, which could be changed until final approval, the agency said.
The Commission presented the idea of ​​imposing such a tax in recent weeks, noting that the profits of some energy companies that do not rely on gas and in this context do not face extremely high production costs, could be subject to a special framework of measures, with revenues directed to actions to alleviate consumers.
Leaders, however, are not expected to intervene in the wholesale energy market as a whole and instead ask their ministers to consider other short-term alternatives.
Reducing dependence on Russia
Leaders may also pledge to phase out Europe’s dependence on Russian fossil fuels and start replenishing depleted gas reserves as soon as possible, backing the Commission’s plan to reduce Moscow imports almost two-thirds by the end of this year.
Ahead of the Summit, the Commission plans to submit a regulatory proposal to ensure that existing storage facilities in Europe are filled before the next heating season.
“We have to act very urgently to fill the gas reserves for next winter,” Cristina Lobillo, the Commission’s chief energy strategist, told the European Parliament on Tuesday. “That’s why the European Commission is working to publish, possibly on Wednesday, a legal proposal to make a minimum level of gas storage mandatory for next winter. And that percentage could be at least 90% by 1 November “.
EU members also plan to commit to working with the Commission on common markets for gas, liquefied natural gas and hydrogen according to the draft of the joint announcement.
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Source: Capital
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