MOTION FOR A RESOLUTION on the EU’s response to the increase in energy prices in Europe
28.9.2022 - (2022/2830(RSP))
pursuant to Rule 132(2) of the Rules of Procedure
Sira Rego, José Gusmão
on behalf of The Left Group
European Parliament resolution on the EU’s response to the increase in energy prices in Europe
The European Parliament,
– having regard to the Treaty on the Functioning of the European Union,
– having regard to Directive (EU) 2018/2001 of the European Parliament and of the Council of 11 December 2018 on the promotion of the use of energy from renewable sources,
– having regard to Regulation (EU) 2019/943 of the European Parliament and of the Council of 5 June 2019 on the internal market for electricity,
– having regard to Directive (EU) 2019/944 of the European Parliament and of the Council of 5 June 2019 on common rules for the internal market for electricity and amending Directive 2012/27/EU,
– having regard to Regulation (EU) 2017/1938 of the European Parliament and of the Council of 25 October 2017 concerning measures to safeguard the security of gas supply and repealing Regulation (EU) No 994/2010,
– having to regard to the Commission communication of 18 May 2022 entitled ‘REPowerEU Plan’ (COM(2022)0230),
– having regard to the European Pillar of Social Rights action plan,
– having regard to its resolution of 28 November 2019 on the climate and environment emergency,
– having regard to Regulation (EU) 2021/1119 of the European Parliament and of the Council of 30 June 2021 establishing the framework for achieving climate neutrality and amending Regulations (EC) No 401/2009 and (EU) 2018/1999 (European Climate Law),
– having regard to its resolution of 10 February 2021 on the New Circular Economy Action Plan
– having regard to its resolution of 15 January 2020 on the European Green Deal,
– having regard to its resolution of 15 September 2022 entitled ‘Consequences of drought, fire, and other extreme weather phenomena: increasing EU’s efforts to fight climate change’,
– having regard to Rule 132(2) of its Rules of Procedure,
A. whereas energy prices, particularly natural gas, started increasing in spring 2021, driven by rising demand after the pandemic and the increase in the price of CO2 emissions, compounded by geopolitical tensions;
B. whereas the price of gas increased dramatically as a consequence of Russia’s invasion of Ukraine and after the Russian decision to discontinue gas supply to EU countries; whereas in eight months of war the European Union has not undertaken any significant diplomatic initiative to facilitate peace negotiations;
C. whereas this rise in the price of gas has led to dramatic increases in the price of electricity; whereas this is closely related to the functioning of the current marginal pricing system established by EU legislation;
D. whereas this increase in energy prices has provoked the highest inflation rates of the last decade; whereas this inflation is eroding workers’ and families’ purchasing power, undermines the competitiveness of Member States’ micro-enterprises and small and medium-sized enterprises (SMEs), and provokes closures as well as increased unemployment; whereas energy-intensive sectors are particularly affected by this situation, and face curtailments, production reductions, production shifts to night-time or site closures;
E. whereas the increase in energy prices has led to skyrocketing transport and mobility costs; whereas these increased costs absorb a large part of available income and thus especially and severely affect low- and medium-income households, micro and small enterprises, vulnerable transport users, people facing or at risk of mobility poverty and people living in rural, remote, island or peripheral areas;
F. whereas the negative impacts of increased gas prices would have been less severe if the Union and its Member States were more energy independent and less reliant on energy imports, particularly from Russia; whereas previous geopolitical decisions and increasing reliance on gas as a ‘transition energy’ have been proved wrong; whereas rapidly accelerating the deployment of renewable energy and rapidly increasing energy efficiency in the Union and its Member States are imperative to guaranteeing lower energy prices, security of supply and strategic autonomy;
G. whereas all European Union measures adopted to date are based on a temporary and limited approach; whereas since October 2021 they have neither tackled the situation nor resulted in a significant improvement in the living conditions of Union citizens;
H. whereas high electricity prices put at risk the electrification process needed as a driver for decarbonisation, to which the EU is committed under the Paris Climate Agreement, the European Green Deal and the Fit for 55 package of measures ;
I. whereas the number of people in situation of energy poverty, which was already around 36 million in 2020, has increased in recent months, with ever more people unable to pay their energy bills or obliged to choose between eating or heating; whereas according to Eurofound up to 53 % of Europeans reported that their household had experienced difficulties making ends meet in spring 2022 – a considerable increase on the 45 % reported in 2021; whereas access to energy should be considered a basic human right; whereas the Social Climate Fund is insufficiently funding;
J. whereas the European Pillar of Social Rights Action Plan set a EU target for reducing the number of people at risk of poverty or social exclusion by at least 15 million by 2030;
K. whereas Member States are required by EU law to use their National Energy and Climate Plans (NECPs) and Long-Term Renovation Strategies (LTRSs) to set out definitions and indicators, timeframes and policies to reduce energy poverty; whereas the Commission has identified citizens affected by energy poverty as one of the three key priorities of the Renovation Wave and published its guidelines on energy poverty to spur Member States into action;
L. whereas energy companies owning infra-marginal electricity facilities (such as nuclear or renewables) have benefited from the design of the marginal pricing system and have obtained enormous windfall profits which have no link to their actual production costs; whereas the Commission President has stated that the current market rules are no longer ‘fit for purpose‘;
M. whereas windfall profits have been generated for some big multinational enterprises in different sectors; whereas dividend pay-outs were reported to be 15.5 % higher in the second quarter of this year than in the same quarter of 2019 before the pre-pandemic; whereas food prices around the world are soaring while the world’s top four grain traders, which have dominated the global grain market for decades, have seen record profits during this crisis; whereas there is an urgent need to redistribute the windfall profits of the biggest multinational enterprises;
N. whereas the link between the wholesale market prices for gas and final prices is hidden from consumers; whereas information about wholesale prices is shielded by EU legislation; whereas this lack of transparency promotes speculation, undermines the trust of citizens in EU institutions and jeopardises the efforts to allocate public resources in the most efficient manner;
O. whereas the marginal pricing system was designed when electricity generation was based on technologies with high variable costs and low fixed costs; whereas the liberalisation and deregulation of energy markets have failed to deliver the lower prices for consumers promised by its proponents; whereas this system is currently obsolete and not able to address the current energy price crisis and the challenges related to climate crisis;
P. whereas the link between energy price increases and the financial speculation is well-known and has been acknowledged by the Commission; whereas, in midst of increasing energy prices, the Commission recently approved a delegated acted for the Markets in Financial Instruments Directive on the application of position limits to commodity derivatives that did not limit the role of speculative activities; whereas the Commission is considering conditions under which trading on energy futures could be temporarily suspended;
Q. whereas, despite the provisions in Directive 2018/2001 on Renewable Energy, a huge number of obstacles for energy communities and other initiatives for citizens to produce their own energy remain in many Member States;
R. whereas the growing use of coal and imported gas (gas from fracking in the USA and liquefied natural gas (LNG) from other third countries) resulting from gas scarcity in Europe and deficient energy planning means that the EU is further from meeting its climate commitments set out in the Green Deal; whereas the Union and its Member States must accelerate the transition to renewable energy, while ensuring reliability of energy supply in the medium- and long-term as the share of variable energy sources increases in the energy system;
S. whereas a strategy for diversifying energy supply must be based on mutually beneficial forms of cooperation and solidarity between countries, must not replace current dependencies on third parties with new ones, and must safeguard economic, social and environmental aspects which are important for States and their peoples, such as controlling energy prices and the quality of services, safeguarding workers’ rights and ecological sustainability;
T. whereas given its central importance and sensitive nature, the security of energy supply must not be dependent on market contingencies that, as reality has shown, threaten it and have led to accelerated increases in energy prices;
1. Calls for an urgent reform of the marginal pricing system for electricity and for the decoupling of gas prices from electricity prices;
2. Considers that the new system should adequately reflect the actual production cost of each technology, as well as its actual contribution to the energy mix; considers that a ‘revenue cap’ at 180 EUR/MWh is still too high; calls on Member States to adopt a radical excess profits tax that goes further than the Commission proposal and that will include genuine price caps while not jeopardising the essential and fast deployment of renewable energies; considers that public energy planning and a prominent role for publicly-owned companies would contribute to overcoming the dichotomy between capping and incentives for private investment;
3. Calls for the reversal of privatisation and liberalisation, which is becoming increasingly urgent and necessary in the current context, and for Member States to thus regain public control of the energy sector, including production, distribution, infrastructure, networks and reservoirs;
4. Stresses that swiftly increasing energy efficiency and implementing demand-side measures is important both for tackling the current energy prices and ensuring the security of energy supply; reiterates its call on Member States and the Commission to step up action on EU climate mitigation, adaptation and resilience, and insists that changes to the energy system must support the EU’s climate goals;
5. Stresses that energy use is highly correlated to income and wealth distribution, with the energy footprint of the richest 10 % being 20 times higher than that of the poorest 10 % at the global level; recalls that luxury goods and services (such as the use of private jets and yachts) consumed by the wealthiest categories of the population entail disproportionate energy uses and greenhouse gas (GHG) emissions; points out that in four hours of flight a private jet can emit as much GHG as the average European over the course of an entire year; calls on the Commission and Member States to take action to regulate as a priority these goods and services in order to curb energy use;
6. Calls for increased transparency in wholesale energy markets, particularly gas markets; calls on the Commission to come forward with legislative changes that increase transparency in these markets and eliminate unjustified confidentiality clauses in contracts; considers consumers (both citizens and businesses) have the right to know the evolution of the price of energy throughout its value chain; considers that an audit of energy prices conducted by public authorities in each Member State would contribute to reinforcing the trust of citizens and businesses;
7. Recalls that these essential and needed changes to the market would be undermined if the Russian war of aggression in Ukraine continues, because of the deviation of economic resources and the return to more polluting means of energy production; calls for a determined diplomatic effort by the European Union to bring about peace negotiations, in parallel to the reforms outlined above;
8. Stresses that workers’ rights must be safeguarded in this framework, in particular through their integration into new energy supply structures, guaranteeing their employment contracts and wages;
9. Condemns the signature of energy supply agreements involving energy resources plundered from the territory of one country by another;
10. Calls on the Commission to permanently suspend trading on energy and carbon emissions futures;
11. Considers that energy companies that have benefited from enormous windfall profits must contribute to solving the crisis; takes note of the Commission’s proposals to define how they can do this; regrets that they arrived too late, despite a number of calls for them since 2020 by The Left Group in the European Parliament and some Member States since 2021; regrets, furthermore, that windfall taxes are only being proposed for major oil and gas companies, leaving other electricity producers outside their scope, although the latter are also profiting during the crisis;
12. Regrets also that windfall taxes are limited to the energy sector, while other multinational enterprises (MNEs) are making windfall profits by selling their essential goods at high prices to the final consumers, which is the case, for instance, of the four main grain firms; regrets that this tax rate is quite low, so that the estimated revenues for the European Union will be only EUR 23 billion; deplores that the design of the tax only takes into account profits reported in each Member States, while big MNEs shift their profits to tax havens and will thus be able to avoid paying this windfall tax; regrets that this windfall tax is limited only to profits reported in 2022;
13. Calls on the Commission to redesign its proposal by extending the sectors covered and by proposing a higher tax rate; recalls that the tax base should be based on these MNEs’ real activity in each Member State; recalls that this windfall tax should not be limited to 2022 profits, but should be designed as a permanent tax which could be reactivated in a future crisis if big MNEs make such windfall profits again; calls on the Commission to encourage Member States to go further than its proposal by extending the sectors covered by this windfall tax and applying a higher tax rate; calls on the Commission and the Member States to reallocate these profits to the fight against energy poverty;
14. Calls on Member States to take immediate action to tackle energy poverty; calls on the Commission to actively support Member States in this task; considers that energy production, distribution and commercialisation are public service missions and that energy should be treated as a common good; recalls that access to energy is a basic human right; calls for an EU-wide ban on power cuts and for it to be made clear that people are not responsible for high energy prices; calls on the Commission not to block national measures aimed at regulating wholesale and consumer energy prices, including public control of energy companies;
15. Recalls that public planning and publicly-owned companies are key tools for tackling speculation and for ensuring that energy is a public right; highlights that their role should not be limited to temporary or emergency situations, and that they should play an active role in future structural energy policies;
16. Stresses that the working class and households across EU Member States face significant challenges such as stagnant or falling real wages, decreasing purchasing power and growing inequality; highlights that many people in Europe were already in precarious and vulnerable situations before the energy crisis and the war in Ukraine, and warns that related inflation, in particular rising food and energy prices, will make the situation unbearable for them; calls on Member States to guarantee access to essential goods (gas, oil and electricity), tackle food shortages and block rising rents and house prices; demands measures, such as the automatic indexation of wages, pensions and social transfers to ensure that workers, pensioners and their families do not lose purchasing power;
17. Underlines that access to affordable and zero emission mobility and transport for vulnerable households, vulnerable micro and small enterprises and vulnerable transport users should be treated as a public good;
18. Stresses the importance of reliable and affordable public transportation networks as well as of soft modes of mobility, such as cycling or walking, in providing equal and inclusive access to transport and mobility services;
Businesses and SMEs
19. Recalls that business, particularly SMEs, have suffered the consequences of the pandemic and had barely started on the path of recovery; calls on Member States to define robust measures to tackle the consequences of business closures due to high energy prices; calls on Member States to address the impact of the energy crisis on the labour market by supporting workers who are temporarily in ‘technical unemployment’ because employers were forced to suspend production or services, as well as by supporting solo self-employed workers and providing assistance to small businesses to retain staff and maintain their activities; recalls that short-time working arrangements proved their worth during the pandemic and should be implemented to avoid job losses, with EU financial support where necessary; calls on the Commission to extend the Support to Mitigate Unemployment Risks in an Emergency (SURE);
20. Calls on the Commission to define as soon as possible a special statute for energy-intensive industries, which are a key piece of European industry and are often located in just a few regions, thus contributing to regional development;
21. Insists that increasing social benefits for low-income households and to support workers’ wages are necessary for tackling the purchasing power crisis caused by unprecedented levels of inflation;
22. Calls for the full involvement of the social partners at all levels in the design and implementation of anti-crisis measures through social dialogue and collective bargaining;
Deployment of renewable energy, energy efficiency, climate commitments
23. Calls on the Member States to fully transpose Directive 2018/2001 on the promotion of the use of energy from renewable sources, particularly in order to remove obstacles to the creation of energy communities as an alternative for citizens to produce their own energy in a sustainable and fair way;
24. Calls on the Member States and the Commission to accelerate the deployment of renewable energy in a planned and sustainable way, as it is the best way to end dependency on gas prices and to meet the Union’s climate commitments;
25. Calls on the Commission and the Member States to increase funds for energy rehabilitation of buildings, especially in the most vulnerable neighbourhoods, by providing direct aid and not credits or loans, as it is the most effective way to reduce energy consumption on a long-term basis; welcomes the decision of some Member States to ban the instalment of gas boilers in new buildings; urges all Member States to emulate this decision, with appropriate public support if required;
26. Considers that the energy transition requires significant public investments in renewable energy and in improving energy efficiency in order to curb consumption needs; regrets that EU competition rules have encouraged the privatisation of strategic firms and have prevented Member States from taking an active role in energy production; calls for a new approach to industrial policy in the EU, which must acknowledge the decisive role played by the State in industrial development and energy sovereignty;
27. Calls on the Commission to start the procedure for withdrawing from the Energy Charter Treaty, which mortgages the future action of the Member States on climate and energy;
28. Instructs its President to forward this resolution to the Council, the Commission and the governments and parliaments of the Member States.
-  OJ L 328, 21.12.2018, p. 82.
-  OJ L 158, 14.6.2019, p. 54.
-  OJ L 158, 14.6.2019, p. 125.
-  OJ L 280, 28.10.2017, p. 1.
-  OJ C 232, 16.6.2021, p. 28.
-  OJ L 243, 9.7.2021, p. 1.
-  OJ C 465, 17.11.2021, p. 11.
-  OJ C 270, 7.7.2021, p. 2.
-  P9_TA(2022)0330.
-  Eurostat: https://ec.europa.eu/eurostat/documents/2995521/14698150/2-16092022-AP-EN.pdf/741bf6b2-1643-6ff0-34e7-31522ce1e252
-  https://www.europarl.europa.eu/thinktank/en/document/EPRS_BRI(2022)733583; https://publications.jrc.ec.europa.eu/repository/handle/JRC113953
-  https://www.eurofound.europa.eu/publications/blog/energy-poverty-looms-as-cost-of-living-increases-data-behind-the-difficulties
-  European Parliament resolution of 19 May 2022 on the social and economic consequences for the EU of the Russian war in Ukraine – reinforcing the EU’s capacity to act (P9_TA(2022)0219), recital Q: ‘whereas the International Energy Agency has estimated that excess profits amount to EUR 200 billion in 2022; whereas it has also stated that temporary fiscal measures on windfall profits could be made available for public revenue to partially offset higher energy bills; whereas the Commission proposed guidance on the introduction of temporary tax measures on windfall profits in March 2022’.
-  https://www.politico.eu/article/ursula-von-der-leyen-state-of-the-european-union-soteu-speech-ukraine-russia-gas-energy-war/https://www.politico.eu/article/ursula-von-der-leyen-state-of-the-european-union-soteu-speech-ukraine-russia-gas-energy-war/
-  Some examples: CMA-CGM (maritime transport) made the same profits in the six first months of 2022 that they made in the whole of 2021, which was already their best year ever. BNP Paribas (banking sector), LVMH (luxury sector) and Stellantis (car industry) also made extraordinary profits during the first semester of 2022.
-  Speech by President von der Leyen at the European Parliament Plenary on the preparation of the European Council meeting of 21-22 October 2021:’First, we must end speculation on the energy markets. This is why we are increasing our monitoring of the gas and carbon markets. And we have asked the European Securities and Markets Authority to examine trading behaviour in emission allowances’.
-  https://www.europarl.europa.eu/doceo/document/B-9-2022-0345_EN.html
-  ‘To avoid that domino effect, regulators will by Thursday propose tweaks including widening the types of guarantees that power companies can give to clearinghouses as collateral. The Commission is also looking at conditions under which trading on energy futures could temporarily be suspended and is planning to change state aid rules to allow countries to prop up cash-strapped utilities’, quoted in ‘Politico’.