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European Commission proposes emergency energy measures

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European Commission President Ursula von der Leyen speaks during a press conference in Brussels, Belgium, July 20, 2022. [Photo/Xinhua]

BRUSSELS — The European Commission on Wednesday proposed a series of new measures to mitigate the effect of soaring energy and electricity prices.

The measures were outlined by Commission President Ursula von der Leyen in her annual State of the European Union (EU) address to the European Parliament in Strasbourg, France.

Under the plan, which still needs to be approved by member states, the EU would tax the profits of non-gas power producers and force those companies to pay a “solidarity contribution” on their 2022 profits.

“In these times, profits must be shared,” she said, “and channeled to those who need it most. Our proposal will raise more than €140 billion (US$140 billion) for Member States to cushion the blow directly”.

EU energy companies are also facing serious liquidity problems in the electricity futures markets, putting the functioning of the energy system at risk.

“We will work with market regulators to mitigate these issues by changing collateral rules – and taking action to limit intra-day price volatility. And we will change the temporary state aid framework in October to allow the provision of state guarantees, while maintaining a level playing field,” she said.

Gas prices have increased more than 10 times compared to before the pandemic, according to von der Leyen.

Looking ahead, von der Leyen said the EU plans to reform its electricity market by decoupling “the dominant influence of gas on the price of electricity”.

The Commission is also proposing the creation of a new European hydrogen bank with a budget of €3 billion from the European Innovation Fund.