The EU will introduce new measures due to high energy prices

BRUSSELS, September 30 — PRIME. The new measures, agreed by EU energy ministers on Friday to respond to high energy prices, will take effect from December, the EU Council said in a statement.

Ministers have reached political agreement on appropriate regulation for these measures. It will be formally approved by written procedure in early October, the report says.

“The measures are temporary and emergency. They will be applied from December 1, 2022,” the release says.

Their action, according to the message, should be completed within 2023. In particular, the reduction in demand for electricity will be valid until the end of March, the profit limit for certain companies – until June 30.

“The regulation introduces general measures to reduce the demand for electricity, as well as to collect and redistribute excess energy sector revenues to end consumers,” the release says.

A voluntary target to reduce gross electricity consumption by 10% and a mandatory target to reduce electricity consumption by 5% during peak hours will be introduced, it notes.

There will be a limitation on the market profits of companies generating electricity from cheaper resources – for example, based on renewable sources, nuclear energy, brown coal. The limit will be 180 euros per megawatt hour. Incomes of companies in excess of this limit, the authorities of the EU countries will be able to direct to support consumers.

States will choose the measures to collect and redirect these excess revenues, the release notes. Countries will be able, in particular, to raise this limit or use measures that further restrict the market income of companies, impose a limit on the income of other market participants, such as traders.

A mandatory so-called “solidarity contribution” will be established on the profits of enterprises operating in the sectors of crude oil, natural gas, coal and oil refining.

It will be calculated on the basis of taxable income, determined in accordance with national tax rules, in a fiscal year beginning in 2022 and/or 2023, the release notes. We are talking about a contribution from that part of the income that will exceed the 20% increase in the average annual taxable income from 2018.

“The solidarity contribution will be applied in addition to the normal taxes and fees applicable in the member states (of the European Union – ed.) … Member states will use the proceeds of the solidarity contribution to provide financial support to households and companies, as well as to mitigate the effects of high retail prices for electricity,” the statement said.

Countries can maintain national measures equivalent to a “solidarity contribution” provided they are compatible with the goals of Friday’s regulation and generate at least comparable revenues, the report said.

The states of the union will also be able to temporarily set the price for the supply of electricity to small and medium-sized enterprises.