Five ways EU energy policies just don’t hold up
With yet another Extraordinary Energy Council in sight, EU energy ministers are expected to agree on a set of measures to further tackle the energy crisis and ease the pressure of looming bills. However, if this last year is anything to go by, we won’t be holding our breath for any major breakthroughs.
Despite the catastrophic impact of the energy crisis on the cost of living across Europe, the European Council and Commission continue to fail people in Europe. For more than a year now, EU institutions have been grabbing headlines with glossy plans and toolboxes, elaborate – yet elusive – price control mechanisms, and opaque purchasing plans.
Here are five unresolved issues in the EU response to this energy crisis, illustrating how the measures put forward so far simply do not hold up, and why we need to continue fighting them.
- The EU energy platform: letting the fox guard the henhouse
This energy crisis has brought families and small businesses to their knees while big energy companies continue raking in millions in profits. In case you were wondering how we got here, the answer is fairly straightforward: big polluters like Eni, Shell, BP, and Engie are in the driving seat when it comes to designing EU energy policy. The European Commission has now formalised the EU Energy platform, a group of the most powerful – and most polluting – energy companies, in charge of advising the Commission on how best to tackle this energy crisis. The results are all too clear: record-breaking profits for energy companies while working people are forced to choose between eating or heating their homes. If you want to know more about this, Corporate Europe Observatory has a full report on the shady arrangements of the EU Energy Platform and what this means for people in Europe.
- The gas price cap that never existed and never will
For over a year now, The Left has been calling for public price controls, among other things through a cap on gas prices. This is simple common sense, and in fact after a few months several European leaders, of all political persuasions, asked the Commission to get down to work and put forward a cap on gas prices. The proposal presented by the Commission is farcical at best, and extremely worrying at worst: the conditions to trigger the cap are so stringent that even when gas prices peaked to a record-breaking 314 €/MWh, this would not have been enough to activate it. After all, the Commission stated that the cap’s aim is not to tackle ‘high prices’, but only ‘extremely high prices’. In other words: families and workers – not mentioned once in the legislative proposal – will not get any support so that the EU carefully avoids “distorting the market”.
- Consumption reduction, AKA it’s all on you!
It’s true, the world is on the brink of climate collapse, we need to consume more efficiently but most importantly we need to consume less. Yet what the energy saving tips put forward by the Commission – e.g. switching to double glazed windows or using the washing machine on full load – are a slap in the face to the millions of people in Europe who live in energy poverty and cannot afford to adequately heat or light their homes. If the European Commission and Council are serious about reducing energy consumption they should radically accelerate the renovation wave allowing people to live in energy efficient housing, massively invest in public transport and increase wages. The core of the issue here is that energy poverty, just like the reduction of consumption, should not be treated as a personal burden but as a political failure requiring sound public policies ensuring the right to energy to people across Europe.
- The market is failing, but it must not be distorted
Despite recognising that the energy market “is no longer fit for purpose” and including energy market reform in the Commission work programme for 2023, every single regulation and communication proposed so far warns about the “danger” of distorting the single market. We hate to break it to the Commission and Council but there is very little left to distort: the market is not working. Through short-term measure after short term measure, EU leaders have failed to face the truth and radically reform the EU energy model.
- Privatising gains while socialising losses: solidarity according to the EU Commission
The “principle of solidarity” has been the EU Commission’s mantra whenever they put forward measures tackling the rising energy costs. Yet upon closer inspection, one can find many things but not solidarity . Up until September this year Shell, TotalEnergies, Eni and Repsol alone recorded almost € 78 billion in profit, while speeding towards climate chaos. People across Europe have been taking to the streets demanding an increase in wages and asking governments to properly tax those profiting out of this crisis. What did the Commission come up with? A “solidarity contribution”: a temporary levy of 33% on the extra profits of oil and gas companies. Better than nothing, some might think. Not really. These levies could potentially return to the coffers of the very same energy corporations since the regulation allows companies to retain the 10% of the surplus profits. People across Europe do not need fuzzy measures dressed up as “solidarity”, people need a fair, just and sustainable energy transition funded by a proper windfall profit tax.
The failure of the energy market and the dramatic situation of millions of people in Europe are now here for all to see. The Left’s has put forward 10 key demands to build an energy model that works for people and planet, leaving no one behind. If European leaders are serious about tackling this energy crisis they need to look beyond market-based solutions and their blind faith in the market.