Brussels gives the go-ahead: further cuts to excise duties for everyone

Brussels. Faced with the ‘toughest’ winter on the energy front since the 2022 gas crisis, Ursula von der Leyen’s Commission has promised to adopt a pragmatic and flexible approach towards Member States seeking to help citizens and businesses grappling with rising fuel costs and energy bills. “Tackling the issue of high energy prices is a top priority for Member States, for me and for the Commission. We are determined to address this situation with an open mind, pragmatism and flexibility,” said Energy Commissioner Dan Jorgensen yesterday at the end of an informal meeting with ministers from the 27 Member States in Dublin. The strategy of electrification and investment in renewables and nuclear power to reduce dependence on hydrocarbons remains valid. The Commission also emphasises recommendations to reduce demand, such as incentivising public transport or setting limits on heating temperatures. However, at a time when governments are stepping up fiscal measures to curb rising fuel and gas prices, the EU executive has ceased to oppose them. “In the short term, support measures are also necessary, particularly for the sections of our society and economy that have been hardest hit,” acknowledged Jorgensen.

Panic in the EU over a potential energy crisis caused by a diesel shortage – resulting from an export ban imposed by the Trump administration – has eased in recent days. “As far as winter preparations are concerned, we do not see any immediate risks to energy supplies in Europe,” said Commissioner Jorgensen: “We have been working, and are continuing to work, intensively to ensure this, in close collaboration with Member States and the sector.” Problems remain with gas storage, particularly in Germany and the Netherlands, where levels are well below the 80 per cent required by EU legislation. But the biggest problem concerns prices. Gas prices remain at around 70 euros per megawatt-hour (with knock-on effects on electricity prices). Oil prices are still above 100 dollars per barrel. “This price level must not become the new normal,” said Jorgensen.

In recent months, the Commission had insisted on the need to limit national fiscal measures. But yesterday, Jorgensen had to concede the obvious: Member States have no intention of heeding Brussels’ calls to reduce demand or to provide limited, targeted aid to the most vulnerable groups. The latest example is Spain, which has extended tax rebates on fuel until December, with an automatic trigger clause to reinstate them should prices rise by more than 15 per cent. The Commission is adapting its stance. “We are examining what can be done to ensure the availability and affordability of transport fuels,” said Jorgensen: “This is a major concern for many citizens, which has repercussions for large sectors of our economy.” The possibility of extending excise duty cuts for everyone is not the only pragmatic measure promised. Jorgensen has announced an amendment to the regulation on methane emissions, as requested by the Trump administration, because the new EU rules could restrict exports of American liquefied natural gas to Europe.