MNI: EU Energy Measures To Be Smaller Than In 2022-Official

European Union measures to counter the impact of the spike in energy prices following the outbreak of war in the Gulf should be  tailored for energy crisis of a lesser scale than that seen in 2022 following Russia's invasion of Ukraine, but will be  deployed faster this time round given agreement among states that action has to be taken, a senior EU official said on Tuesday. 

"The decision on measures that need to be taken in the very short run needs to be taken very fast. There is that demand from leaders. Hopefully they can at least be proposed and taken by states in a short period,” he said, speaking ahead of the EU's Competitiveness Summit later this week.

Referring to recent proposals from European Commission President Ursula von der Leyen, the official pointed to the likely use of state aid, increases in compensation for indirect costs of up to 80% for energy-intensive industries which face green transition costs under the Emissions Trading Scheme as well as an increase in the firepower of the ETS Market Stability Reserve. (See MNI INTERVIEW: Poland Says One-Year ETS2 Delay Not Enough)

The MSR stabilises the price of carbon allowances by releasing allowances when the surplus is too low and withdrawing them when the surplus is too low and prices high. 

"These are all measures that can be taken in a very short period," the official said. 

The official noted that the current crisis was not as serious as the 2022 energy price spike. 

"To give you an example - gas prices today are around EUR50, in 2022 they went up to EUR350."

"The 'Iberian mechanism' for Spain and Portugal was implemented with the gas price capping at around EUR180. These are different orders of magnitude,” the official said.