Motion for a resolution - B9-0420/2022Motion for a resolution
B9-0420/2022

MOTION FOR A RESOLUTION on the EU’s response to the increase in energy prices in Europe

28.9.2022 - (2022/2830(RSP))

to wind up the debate on the statements by the Council and the Commission
pursuant to Rule 132(2) of the Rules of Procedure

Mohammed Chahim, Dan Nica
on behalf of the S&D Group

See also joint motion for a resolution RC-B9-0416/2022

Procedure : 2022/2830(RSP)
Document stages in plenary
Document selected :  
B9-0420/2022
Texts tabled :
B9-0420/2022
Debates :
Texts adopted :

B9‑0420/2022

European Parliament resolution on the EU’s response to the increase in energy prices in Europe

(2022/2830(RSP))

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[1],

 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[2],

 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[3],

 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[4],

 having regard to the Commission communication of 18 May 2022 on the 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[5],

 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’)[6],

 having regard to its resolution of 10 February 2021 on the New Circular Economy Action Plan[7],

 having regard to its resolution of 15 January 2020 on the European Green Deal[8],

 having regard to Rule 132(2) of its Rules of Procedure,

A. whereas during her State of the Union address on 9 September 2022, the President of the Commission Ursula von der Leyen affirmed that the current energy crisis is due to Russia’s manipulation of the gas market;

B. whereas during a debate with MEPs at the European Parliament on 8 June 2022, Commission President von der Leyen affirmed that the design of the EU electricity market ‘does not work anymore’ and needs to be adapted to the ‘new realities of dominant renewables’;

C. whereas the 20th principle of the European Pillar of Social Rights on access to essential services states that everyone has the right to access essential services of good quality, including water, sanitation, energy, transport, financial services and digital communications, and that support for access to such services shall be available for those in need;

D. whereas according to Eurostat, 8 % of the EU population said that they were unable to keep their home adequately warm in 2020; whereas the largest increase in electricity prices for household consumers in the second half of 2021 was more than 10 %; whereas the two Member States where prices actually fell were Slovakia and Hungary, where prices are regulated; whereas the surge in energy prices, combined with Russia’s invasion of Ukraine in February 2022, has exacerbated an already difficult situation for many EU citizens;

E. whereas spot gas prices recorded at the Dutch Title Transfer Facility (TTF), which had remained below 25 EUR/MWh in the last four years, have increased sharply since August 2021, in particular since Russia’s invasion of Ukraine, reaching more than 200 EUR/MWh in mid-August 2022, where they have remained; whereas Russia’s actions are an example of the market failure experienced by the EU gas market, which requires regulatory intervention;

F. whereas the large increase in the volume of transactions on the spot market, at the expense of bilateral contracts, have made energy prices more volatile and no longer correspond to the value of the underlying commodity;

G. whereas the European Securities and Markets Authority (ESMA) has declared that while ‘open and well-functioning commodity derivatives markets play an essential role for price discovery’, due to the recent period of extreme stress, ‘measures to contain excessive volatility could be helpful in improving the overall functioning’ of those markets; whereas ESMA also pointed out that the framework of the second Market Financial Instruments Directive (MiFID II)[9] already provides for ‘a set of volatility mechanisms (notably trading halts and price collars)’, while noting that ‘in the extreme circumstances that commodity derivatives markets (and energy markets in particular) have experienced over the past months, the number of times that trading halts have been triggered on the relevant EU trading venues seems to be very low’[10];

H. whereas the skyrocketing gas prices have also resulted in record-high electricity prices, as gas is the marginal energy source for electricity generation in most European markets;

I. whereas across the EU and the world, citizens and SMEs are facing rising energy bills and inflation driven by the Russian war against Ukraine and the aftermath of the pandemic; whereas at the same time, big corporations in the energy sector and other sectors have seen their profit margins grow exponentially as a result of the current geopolitical situation; whereas an increasing number of consumers are having to face variable pricing conditions in their energy contracts;

J. whereas the rapid and steep increase in energy prices has severely impacted food production through rising heating and cooling bills for farm buildings and holdings;

K. whereas the security of supply on the energy market is being negatively affected by the current geopolitical context, with gas deliveries becoming less predictable and less consistent;

L. whereas the Fit for 55 package can help to accelerate the decarbonisation of the EU, while improving its energy security and independence; whereas according to the European Central Bank (ECB), it is reasonable to expect that energy prices and inflation will drop with the implementation of the energy efficiency measures proposed in the Fit for 55 package[11];

M. whereas according to the Council of Europe Development Bank, energy poverty rates tend to drop by 0.21 % when energy efficiency index scores increase by one point[12];

N. whereas the Commission recently proposed a Council regulation on an emergency intervention to address high energy prices; whereas the proposal includes a temporary revenue cap on ‘inframarginal’ electricity producers, which could allow Member States to collect up to EUR 117 billion on an annual basis;

O. whereas the International Energy Agency has estimated that temporary fiscal measures on windfall profits could make up to EUR 200 billion available in 2022 for public revenue to partially offset higher energy bills; whereas several Member States have introduced temporary schemes for a tax on windfall profits;

P. whereas the Commission has proposed a solidarity contribution for fossil fuel companies, which Member States should use to support vulnerable households and companies, but also to invest in clean, home-grown renewable energy; whereas according to the Commission, this solidarity contribution could raise up to EUR 25 billion;

Q. whereas a reform of the EU economic governance is needed in order to properly face up to the current challenges;

Introductory considerations

1. Considers that Russia’s war on Ukraine and its weaponisation of fossil energy supply in order to divide the EU have caused significant instability in the energy market;

2. Believes that exceptional times require exceptional emergency measures, where the EU needs to act together and in a united a fashion as ever;

3. Considers that while the current energy market rules may have worked in normal times, they have proven unsuitable to deal with geopolitical uncertainty and supply shortages; stresses, therefore, that the EU energy market is heading towards a market failure that needs to be rectified immediately;

4. Considers that an excessive reliance on liquid and competitive energy markets have fuelled speculative conduct, which is simultaneously driving record energy prices and unprecedented rates of inflation, including 9 % in the euro area – far above the ECB’s 2 % inflation target; deplores the fact that while EU citizens and companies are bearing the cost of this, those responsible, i.e. energy market operators, have massively lined their pockets;

5. Stresses that improving gas and electricity connections is important for cutting EU energy costs, ensuring energy security and integrating renewable energy; calls, in this regard, for the swift construction of the Midcat pipeline between Spain and France, which will strengthen the EU’s energy autonomy by promoting diversification of gas supplies;

6. Takes into particular consideration the needs of remote, peripheral and isolated regions, including islands, which due to their remote location and distance from the mainland, as well as certain market realities, are already experiencing additional constraints;

7. Recalls that in the light of the current situation in the energy market and the need to achieve our energy and climate objectives, transitional energy sources, which are an inevitability for certain Member States lagging behind in the energy transition, must be respected so as not to jeopardise any of the EU or national targets for 2030 and 2050;

8. Believes that the best solution to prevent another crisis is to achieve the objectives of the European Green Deal; stresses, in this regard, that a more energy-efficient and renewable-based energy system will provide more resilience against external shocks as well as more stable and lower prices; stresses that residential heating must be decarbonised through smart electrification and renewable-based district heating in order to ensure that consumers have access to the most affordable and renewable solutions; recalls the role that renewable hydrogen can play both in strengthening energy security and decarbonising the energy sector; calls, to that end, for an acceleration of the green and energy transitions by mobilising massive investments and for the proposals of the REPowerEU strategy to be implemented as soon as possible by investing massively in energy efficiency measures, renewables and energy storage;

Response to the Commission proposal for a Council regulation

9. Welcomes the emergency measures proposed by the Commission on 14 September 2022, in particular the temporary revenue cap on ‘inframarginal’ electricity producers and the solidarity contribution from oil and gas producers; regrets the fact that the Commission and Council were too slow to act, despite Parliament’s repeated calls since October 2021; is concerned about the use of Article 122 of the Treaty on the Functioning of the European Union as the legal basis and demands that Parliament be involved in any measures taken thereunder, however informal, as they require full democratic legitimacy and accountability; recalls that this instrument should only be used in emergency situations;

10. Welcomes the proposal on reducing the demand for electricity, but stresses that any measures adopted must not be a burden for vulnerable households and consumers, SMEs or those living in energy poverty;

11. Welcomes the Commission’s proposal to impose a solidarity contribution from oil and gas producers; calls on the Council to reach an agreement on the proposal as soon as possible and to include within its scope more corporations that have profited excessively from successive crises; notes that the proposal is due to be implemented at Member State level, but includes no binding provisions to share the revenues collected among the Member States, potentially leading to a disparity in revenues across the EU; notes with concern that some of the largest energy companies in the EU may not be subject to the contribution; calls on the Council to include anti-avoidance measures in the legislation so as to prevent profit shifting;

12. Welcomes the Commission’s proposal to redirect extra public revenues obtained from the solidarity contribution to those most affected by the soaring energy prices; calls on the Member States to devote a share of the revenues to the common financing of measures to prevent the fragmentation of the single market and further socio-economic asymmetries; calls, in this regard, for 15 % of the revenues collected to be allocated to the RePowerEU chapter of the Recovery and Resilience Facility in the form of assigned revenues;

13. Stresses the need, furthermore, to assess a suitable profit margin in the light of the emergency situation and to tax the windfall profits of gas market traders who have benefited excessively from the energy crisis; stresses that the resources should be used to provide support, including through measures such as retail prices caps, for vulnerable households and SMEs, which have suffered the most from the crisis, as well as investing in renewable technologies, energy efficiency measures, such as the renovation and decarbonisation of buildings, or temporarily lowering end prices for SMEs and households; calls on the Commission to take the necessary measures to help energy-intensive industries, which are vital to the EU economy;

14. Welcomes the Commission’s proposal to begin discussions on a reform of the design of the electricity market; stresses that renewables have a stable and low cost and should not be pegged to the cost of fossil fuels; recalls, however, that the current design of the electricity market has provided competitive prices and rewarded clean energy sources, and that the high electricity prices currently being experienced are not due to the design of the electricity market per se, but to speculative and manipulative conduct and supply shortages in the gas market; highlights the need to address the problem at its source by ending speculation in the gas market; calls on the Commission, moreover, to decouple the price of gas from electricity prices in order to reduce the volatility of electricity prices in the wholesale market, and to ensure that the electricity markets send out the right price signals to invest in decarbonisation and allow consumers to benefit from the lower cost of renewables;

15. Considers that the reform of the electricity market should address the extraordinary and disproportionate profits that have been yielded as well as the rise in energy poverty that the current situation has created; points out, however, that this reform should also carefully consider the complexity of the market, including the long-term contracts that stabilise prices and continuing to encourage investments in renewable energy and energy efficiency; highlights, in this regard, the urgent need to revise the services of general economic interest in the light of the war and pandemic in order to ensure affordable access to all general services in future;

16. Calls on the Commission to put forward a proposal as soon as possible to establish a temporary cap on the price of imported gas; regrets, however, that no concrete measures have been proposed so far; stresses that this initiative should apply to all European buyers, including energy companies and wholesale and retail operators; calls, therefore, for the creation of a solidarity mechanism in order to help share the burden, the implementation of which should take into account the specific situation of Member States with access to the international liquefied natural gas market and prevent distortions in competition between Member States seeking to access the same resources;

17. Calls on the Commission and the Council to upgrade the EU Energy Platform and transform it into a tool for the joint procurement of energy sources, using the EU’s vaccine procurement programme as a model, in order to strengthen the EU’s bargaining power and lower the cost of imports; emphasises that joint procurement is a shared EU responsibility to help fulfil the energy needs of Member States which, in implementing the EU’s sanctions against Russia, have been cut off from Russian gas and are suffering from a lack of access to suppliers; calls on the Commission to devise a robust cooperation mechanism with like-minded third countries that provide energy to the EU, so as to avoid disproportionate energy prices;

Further action to address speculation and manipulative conduct in the gas market

18. Welcomes the fact that the Commission has finally recognised that Europe is experiencing manipulations of the gas market, which in turn have repercussions on electricity prices;

19. Welcomes the Commission’s proposal to develop an alternative EU benchmark to the TTF for gas and liquefied natural gas; regrets, however, that no concrete measures have been proposed to immediately address speculative and manipulative conduct in the TTF, which is after all Europe’s main trading platform;

20. Welcomes the antitrust lawsuit initiated by the Commission’s Directorate-General for Competition against Gazprom for abuse of its dominant position, and urges the Commission to swiftly conclude the procedure and adopt the necessary decisions; stresses that the Commission must make use of all the available tools under competition law to tackle market distortions, unfair prices and price manipulations in electricity and gas markets; believes that when it comes to identifying violations of competition law in the area of electricity and gas, the Commission must also consider applying structural measures as remedies;

21. Calls for an end to speculation and manipulation in the gas market and calls for measures to be taken vis-à-vis the functioning of the TTF and the entities entitled to operate in the market; considers that these measures should include:

(a) applying a trading halt mechanism to the TTF in the event of excessive price fluctuations, as proposed by ESMA;

(b) deploying the technical functionalities employed by gas exchanges;

(c) reducing the number of financial and speculative entities, which currently outweigh the number of commercial and industrial players in the sector;

(d) imposing limits on reselling commodities;

(e) limiting the number of intermediaries between producers and buyers;

(f) strengthening transparency and financial supervision by the relevant authorities, including ESMA;

(g) decoupling the indexation of contracts from the TTF hub;

(h) encouraging bilateral contracts, including through the EU Energy Platform;

(i) promoting the use of compulsory stock obligations (CSOs) for natural gas, as is already the case for oil;

22. Calls for full disclosure and transparency on the purchase prices obtained by operators throughout the entire supply chain; considers that speculative conduct may be latent along every step of the value chain, from the producers to the distributors; calls on the Commission, in particular its Directorate-General for Competition, and on ESMA to closely monitor the European gas market for possible cases of market dominance, issues surrounding a lack of transparency and instances where fair market rules cannot be guaranteed, as well as making use of existing tools under competition law to address those shortcomings;

Social dimension and consumer protection

23. Calls for immediate action in order to defend the basic right of having clean and affordable heating and electricity and to prevent people from having to choose between eating, heating and cooling; considers that vulnerable households and consumers should in no circumstances have the gas supply they use for their heating cut off; stresses that nobody should be able to profit unduly and excessively from an emergency at the expense of ordinary people while also putting energy security at risk;

24. Underlines the need to strengthen the EU’s fiscal capacity to respond to the evolving economic and social situation; stresses that Member States require adequate fiscal space to support businesses and households and protect the most vulnerable; stresses that expanding the NextGenerationEU instrument or transforming it into a permanent mechanism must remain a policy option;

25. Expresses concern that unemployment is on the rise due to the rising energy costs; underlines that decent wages are essential to help households keep up with rising energy prices; stresses the need, in this regard, to promote collective bargaining and ensure that wages are not used as an economic stabiliser for containing inflation; calls, therefore, for the scheme of temporary Support to mitigate Unemployment Risks in an Emergency (SURE) to be immediately extended and transformed into a permanent mechanism, and for the immediate implementation of the new EU Minimum Wage Directive so as to ensure that real wage growth mitigates rising costs and minimum wages are increased to at least 60 % of the Member State’s median salary or 50 % of the EU average;

26. Warns that vulnerable households that find themselves at risk or below the poverty line need to be protected from energy poverty; calls on the Commission to put forward a directive for minimum income schemes with the aim of safeguarding the right to a decent life and eradicating poverty; underlines that everyone in the EU should be covered by a minimum income scheme and that pensions should ensure an income above the poverty line;

27. Is concerned that the current crisis will further exacerbate the situation of children in or at risk of poverty; calls on the Commission and the Member States to speed up the implementation of the European Child Guarantee so that every child in the EU has full access to free and good-quality healthcare, education and childcare, lives in decent housing and receives adequate nutrition; reiterates, therefore, its call for an urgent increase in the financing of the European Child Guarantee, including a dedicated funding line of at least EUR 20 billion to ensure, inter alia, that no child has to endure energy poverty in the EU;

28. Is concerned that the implementation of the 20th principle of the European Pillar of Social Rights on access to essential services has been coming under increasing pressure since the pandemic and the war; urges the Commission to urgently revise the services of general economic interest so as to ensure affordable access to basic needs including water, sanitation, energy, transport, financial services and digital communications;

29. Calls for a swift agreement to be reached on the Social Climate Fund, including measures to support vulnerable houses affected by energy prices, and for its budget to be substantially increased;

30. Calls on the Commission and the Member States to ensure that the food production sector is covered by energy price caps, to prevent extreme increases in the cost of food for consumers, which will only serve to widen inequalities and worst affect those also most at risk of energy poverty, and to ensure that food producers remain viable and able to produce day-to-day essentials;

31. Recalls the need to strengthen consumer rights in the gas sector through the recast Gas and Hydrogen Markets Directive and to protect especially vulnerable and energy-poor consumers;

32. Calls on the Commission to assess the need for more stringent requirements on pre‑contractual information in the energy sector, in particular for distance sales, as well as the need for compulsory fixed energy and gas supply contracts as a further policy option to enable consumers to directly avert price volatility; highlights the need for campaigns on energy saving measures, which are beneficial both to consumers and society as a whole;

33. Calls for consumers to be better protected from the suspension of suppliers and the withdrawal of fixed-rate contracts; considers that consumers that have signed fixed-rate contracts in order to protect themselves from price alterations should be compensated by the supplier if the supplier decides to suspend or withdraw those contracts;

34. Calls on the Commission and the authorities of the Member States to prevent consumers from incurring exorbitant and unjustified pre-payments for gas and electricity, where they effectively become creditors of their energy providers;

35. Highlights the particular relevance, in the current context, of the public revenues that would be yielded from the implementation of the Pillar II Directive in the EU, which implements the OECD global tax deal on minimum effective corporate taxation; reiterates its call on the Council to swiftly adopt the Pillar II Directive so as to ensure that the agreement is effective by January 2023; urges Hungary, in particular, to put an immediate end to its opposition of the global tax deal in the Council;

36. Stresses that, in parallel, additional new EU own resources are necessary to assure a sustainable financing of the EU budget on a long-term basis and to avoid the new EU priorities being financed to the detriment of existing EU programmes and policies; highlights that the EU will have to be more ambitious and even needs to go beyond the agreed own resources roadmap from December 2020; reiterates its demand for the introduction, without further delay, of a Financial Transaction Tax and an own resource linked to the corporate sector by 2023, such as a single market levy applied to large companies and multinationals operating in the single market;

37. Calls on the Commission to propose an EU framework for inheritance tax and a progressive net wealth tax, which could generate significant additional revenues by applying a very low tax rate to a rather broad base, bearing in mind that the assets of the top 1 % account for about 22.5 % of total wealth in the EU;

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38. Instructs its President to forward this resolution to the Council, the Commission and the governments and parliaments of the Member States.

 

 

Last updated: 29 September 2022
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