EU chief von der Leyen promises overhaul of energy markets, tax on fossil fuel profits

The European Union volition motorboat a "deep and broad reform" of the energy market, European Commission President Ursula von der Leyen said Wednesday.

In her yearly State of the Union speech, delivered astatine the European Parliament gathering successful the French metropolis of Strasbourg, von der Leyen said the marketplace was designed connected the rule of merit order, and not acceptable for purpose.

"Consumers should reap the benefits of low-cost renewables," she said, "So we person to decouple the dominance of the terms of state connected the terms of electricity."

Von der Leyen besides said determination had been a displacement from pipeline state to accrued usage of liquefied earthy gas, but the benchmark utilized successful the state market, TTF, had not adapted.

She said the committee would enactment connected processing a much typical benchmark for trading that reflects this change, and besides easiness liquidity pressures connected vigor suppliers by amending rules connected collaterals and taking measures to bounds intraday terms volatility.

An vigor situation of some proviso and pricing successful Europe came to a caput earlier this period arsenic Russia indefinitely halted state flows to Europe done the cardinal Nord Stream 1 pipeline. 

EU vigor ministers met Friday to sermon a five-point plan which includes a terms headdress connected Russian gas, a windfall taxation connected fossil substance companies' profits, a bounds connected revenues of renewable and atomic companies, a mandatory people for reducing highest hr vigor usage by 5% and exigency recognition lines for powerfulness companies. 

Russian President Vladimir Putin threatened to disregard existing contracts and unopen disconnected vigor supplies to Europe wholly aft the program was announced. 

Addressing the windfall taxation and gross headdress plans, Von der Leyen said that portion profits were not needfully a atrocious thing, "it is incorrect to person bonzer grounds revenues and profits benefiting from warfare and connected the backmost of our consumers."

"In these times, profits indispensable beryllium shared and channeled to those who request it most."

Tax connected fossil substance profits would supply 140 cardinal euros ($139.8 billion) to beryllium divided betwixt subordinate states for vigor measure support, she added.

Von der Leyen said a precedence for the bloc indispensable beryllium connected ending its dependency connected Russian gas, with imports from the state already falling from 40% past twelvemonth to 9% now.

"We person agreed to articulation storage, we are present astatine 84%, overshooting our targets," she said.

But, she continued: "This volition not beryllium enough. We person to diversify distant from Russia to reliable suppliers similar the United States, Norway, Algeria and others," arsenic good arsenic investing much heavy successful renewables and LNG terminals.

She noted millions of households and businesses crossed the European Union were struggling with terms rises and were fearful for the future.