Energy Price Jump Hijacks EU Debate on Green Overhaul

(Bloomberg) -- The unprecedented spike in natural gas and power prices is forcing its way up the European Union’s political agenda after hijacking a meeting of member states on the bloc’s ambitious transition to a green economy.

Ministers from most of the region’s 27 nations, from Sweden to Greece, voiced concerns at their gathering in Slovenia on Wednesday about energy prices hitting all-time highs. Rates have soared just as the bloc’s economies are rebounding from the Covid-19 pandemic, which could slow down political talks about turning EU’s strategy to reach climate neutrality into reality.

The energy crisis is likely to be added to the agenda when EU leaders meet for a summit on Oct. 21-22 after several countries, led by Spain, pushed for it, according to an EU official with knowledge of the matter. Romania, Italy, Poland and Hungary also requested the topic be discussed then, according to an official of the European Commission.

“We’re looking at specific short-term, temporary measures that will shield our European consumers from some of the worst price increases,” Eamon Ryan, Irish Energy and Transport Minister, said in an interview to Bloomberg TV on Wednesday. “I think there was a broad agreement today that has to be center-stage for fear of losing our public to the bigger transformative change that we have to make.”

The commission, the EU’s executive arm, will announce in the coming weeks an overview of measures that member states can take to tackle the energy crunch, Energy Commissioner Kadri Simson said. Under the bloc’s law, the commission has limited powers in the area of energy, which remains largely in the hands of national governments.

“We asked the EU Commission to start in-depth talks with member states about the causes that led to the surge in energy prices, both for electricity and gas, and to identify the appropriate solutions at the EU level,” Romanian energy minister Virgil Popescu said on Facebook.

At their meeting in Slovenia, the ministers were due to discuss draft laws proposed by the European Commission to boost the share of renewables and to increase energy savings as part of a tighter emissions-reduction goal by 2030. 

They raised the issues of price volatility and the impact of soaring energy costs on public support for the clean shift, said a person with knowledge of the talks. Some were concerned about the social consequences of the EU proposal to extend the region’s carbon market to fossil fuels used in transport and buildings, said the person, who declined to be identified because the meeting is private. 

Earlier this week, Spain warned the European Commission that the energy crisis could hinder public support for the Green Deal, which aims for Europe to become the world’s first climate-neutral continent by 2050. In a document aimed at triggering a broader EU discussion, Spain suggested creating a central platform to buy natural gas. That would boost the EU’s bargaining power and limit its dependence on suppliers such as Russia.

Poland on Wednesday asked the commission to take a closer look at what it suspects could be market manipulation by Russian gas exporter Gazprom, according to another person with knowledge of the talks. It also wants the EU to use its foreign investment screening regulation to check if the controversial Nord Stream 2 pipeline is in line with the bloc’s rules, the person said.

In the U.K., which is also being strongly affected by the gas shortage, Business Secretary Kwasi Kwarteng said he’s holding daily meetings with energy regulator Ofgem to monitor the market and “step into gear processes to protect consumers.”

(Updates with comment from Irish energy minister in the fourth paragraph.)

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