European Union approves energy windfall profit levies, says report

European Union (EU) countries disagreed on Friday about whether and how to cap runaway gas prices, with Germany among those opposing the measure that 15 other states said was needed to tackle Europe’s energy crunch.
 

Meeting in Brussels on Friday, ministers from the 27 EU member states approved levies on energy firms' windfall profits to try contain an energy price surge aggravated by Russia’s war against Ukraine.
 

The agreement covers a levy on fossil fuel companies’ surplus profits made this year or next, another levy on excess revenues low-cost power producers make from soaring electricity costs, and a mandatory 5 per cent cut in electricity use during peak price periods. The Czech Republic said, however, that was not enough and that many EU countries expected a proposal from the bloc's executive European Commission on capping the gas price.
 

Speaking after the meeting, the EU’s energy commissioner Kadri Simson said there was no agreement on what such a cap would look like. “We will try to negotiate a price corridor, not a fixed cap, that allows us to bring down the costs for our consumers,” she told a news conference.
 

“A wholesale gas price is a legitimate option, but it requires a radical intervention in the market,” she said, adding that several “non-negotiable conditions” would need to be put in place alongside such a cap for it to work.
 

Italy’s energy minister said a group of countries will discuss among themselves next week ideas for a cap or “smart indexing” to help the Commission draft a legal proposal that all countries can support.
 

“The priority right now is to slash the price of gas. But there is a second priority: to avoid that this kind of action leads to a shortage of gas,” Roberto Cingolani said.