Tuesday

17th May 2022

MEPs moot new emergency fund to battle energy crisis

  • Lawmakers scrambled to find a long-term fix after Russia cut off gas supplies to Bulgaria and Poland last week (Photo: European Parliament)
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Lawmakers and EU energy commissioner Kadri Simson debated rising energy costs in Strasbourg on Tuesday (3 May) and scrambled to find a long-term fix after the Kremlin-controlled Russian gas giant Gazprom abruptly cut off supplies to Bulgaria and Poland last week.

Some called on Kadri Simson to set up a pandemic-type emergency fund to battle exploding electricity bills and speed up renewable projects.

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"The [€800bn] EU recovery fund was an ambitious response to the pandemic, which helped individual member states fight a crisis they could not deal with alone," Laura Ferrara, an Italian non-attached member of the European Parliament, said in the plenary meeting. "Now we face another pandemic [type crisis] in the energy sector, and we need a similar response."

"Why don't you put forward an Energy Recovery Fund," Ferrara then asked Simson.

But Simson was reluctant to embrace such a proposal and pointed out member states already have access to EU funding from different sources, while adding that the existing budget binds the European Commission's hands.

In March, the commission unveiled RepowerEU, an ambitious strategy that aims to reduce Russian gas imports by two-thirds before the end of the year.

In mid-May, further details will be unveiled on how this is to be achieved and how to end Russian gas imports by 2027.

"One-third of Russian gas can be replaced by gas from other suppliers, and renewables can replace the other one-third before the end of the year," Simson said.

But some lawmakers remained unconvinced existing funds are enough to replace Russian gas with alternative clean energy speedily. "We need so much more money for renewables," Michael Bloss, a German lawmaker for the Greens, said.

Fit for 55, the EU's landmark emissions reduction policy, currently targets 40 percent renewable energy in 2030. But Bloss and some other lawmakers called on the Commission to increase the target to 57 percent.

"Loud voices say that 40 percent is not enough. Broadly we agree we need to accelerate renewables," Simson said, adding the Commission has simplified permits for wind and solar projects, which will cut years off building wind and solar parks.

But commission plans to rapidly decrease Russian gas imports will depend on energy-saving measures rather than just expanding and speeding up clean energy production.

"Expanding renewables is not enough to replace Russian gas imports. Energy-saving and energy efficiency is the core of our strategy," Simson said. "This will help governments to avert the worst energy cuts."

MEPs seek full embargo on Russian energy

MEPs called for an immediate and "full" embargo on Russian oil, coal, nuclear fuel, and gas in response to atrocities in Ukraine. But a coal ban is the only likely move for now.

Agenda

Russia sanctions and energy dominate Next WEEK

The EU Commission is expected to put forward the RePowerEU plan, which aims to help the diversification of fossil fuel imports in the bloc, as the EU aims to get rid of its dependence on Russian energy supplies.

Lagarde signals summer interest rate hike

European Central Bank president Christine Lagarde signalled an interest rate increase possibly as early as July, but some experts warn for a repeat of the 2011-2012 debt crisis.

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