European Union energy ministers will meet today to weigh options for curbing energy costs, as Brussels drafts emergency plans to blunt the impact of surging oil and gas prices triggered by the Iran war and the closure of the Strait of Hormuz.
The European Commission is preparing a package to shield households and businesses from soaring bills, according to EU officials familiar with the talks. Measures under consideration include targeted state support for energy-intensive industries, temporary cuts to national taxes and using an upcoming revision of the EU carbon market to ease the supply of CO2 permits and help lower power prices.
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Commission President Ursula von der Leyen has also said Brussels is examining a cap on gas prices — a politically fraught tool that some governments view as essential to break the link between volatile gas markets and electricity bills.
Ministers will hold closed-door talks on short-term steps to stabilize prices after the disruption of LNG trade and unprecedented oil supply shocks tied to the Hormuz shutdown. European benchmark gas prices have jumped more than 50% since the Iran war began, intensifying pressure on national budgets and reviving worries about energy security ahead of winter.
Consensus will be hard to forge in a union of 27 countries with different energy mixes, market designs and fiscal room to maneuver, analysts say. “There are structural reasons why energy prices in Europe are high,” said Joanna Pandera, president of Polish think tank Forum Energii. “It’s really hard to find one solution which fits all.”
Italy and a handful of allies are pushing for sweeping EU-level intervention, including a suspension of the bloc’s carbon market, arguing that the current system amplifies the influence of CO2-emitting gas plants on power prices. Others want the Commission to emphasize national tools such as tax cuts on power and heat or domestic subsidy schemes — an approach one EU diplomat described as “passing the ball back to the member states for the major measures.”
But reliance on national subsidies risks deepening divides inside the single market, senior officials warn, because richer countries can afford broader relief. “Not everyone can afford state aid, that’s the problem. It’s fine for those that have deep pockets,” a senior EU diplomat said.
That imbalance was evident during the 2022 energy crisis, when EU governments spent more than €500 billion on supports — with €158 billion coming from Germany alone, according to the Bruegel think tank. Several capitals fear a repeat could skew competition and leave households in less affluent states more exposed to price shocks.
Von der Leyen is expected to send EU leaders a shortlist of emergency options this week, ahead of a summit on Thursday where heads of state and government will seek political agreement on the path forward.
Beyond crisis management, the Commission argues the only durable solution is to scale up locally produced clean energy, including renewables and nuclear, to cut exposure to volatile fossil fuel imports and bottlenecks such as Hormuz. That push faces its own constraints — from permitting backlogs to grid upgrades — but officials say accelerating deployment remains central to Europe’s energy security strategy.
Any deal ministers reach today would still need to translate into legislative proposals and, in some cases, national implementation — a process likely to stretch into the coming months even as consumers look for immediate relief from record energy bills.
By Abdiwahab Ahmed
Axadle Times international–Monitoring.
