The European Commission proposes a set of seven concrete measures to rapidly reduce energy prices for both industry and households, at a time when energy costs in Europe remain higher than in other regions of the world. They complement the Action Plan for Affordable Energy and aim to mobilize all European instruments to support national economies and maintain the competitiveness of European industry.
The first line of action is to make full use of the Enhanced State Aid Framework. The new mechanism (CISAF) allows national governments to provide direct support to energy-intensive industries, both to reduce their current costs and to accelerate decarbonization processes. The European Commission will provide clear guidance to Member States by the end of the year on how these national support schemes can be designed.
The second measure aims to make more efficient use of cohesion funds. As part of the review of national programs, Member States are encouraged to redirect unused funds towards investments in energy infrastructure, in particular in transmission networks and storage capacities. Brussels will provide technical assistance to define country-tailored projects so that investments have a direct impact on reducing energy costs.
A third action aims to stimulate collaboration between industrial companies and European financial institutions. The Commission recommends stepping up contacts with the European Investment Bank and national development banks to access financing instruments and risk mitigation mechanisms, in particular through long-term power purchase agreements (PPAs). A concrete example is the €500 million pilot program recently launched by the Commission and the EIB to support such agreements.
In parallel, the focus is on speeding up permitting procedures for renewable energy, storage and grid projects. The Commission asks Member States to seize the opportunities offered by the revised Renewable Energy Directive and announces a new package of measures – the “Grids Package” – to be adopted by the end of the year to simplify and shorten the approval steps.
A fifth strategic direction concerns cross-border interconnections. Better electricity and gas networks between countries can make a decisive contribution to lower prices through access to cheaper energy. The commission is preparing to launch the Energy Highways initiative, announced by president Ursula von der Leyen, which aims to remove eight major bottlenecks in Europe’s energy infrastructure and increase market integration.
Diversifying gas supplies remains another priority. The European Union intends to make better use of the strength of the single market to secure favorable contracts with reliable suppliers such as the US, Norway or Qatar. To this end, the Commission, together with the countries of South-Eastern Europe, will launch a joint gas demand gathering exercise to ensure competitive and secure gas supplies.
Finally, a key element of the strategy aims to reduce the tax burden on energy bills, especially electricity. Taxes can account for up to a third of the total cost of energy and lowering them can have an immediate effect on the prices paid by consumers and industry. The European Commission is preparing a set of recommendations and will provide further technical support to reform the energy taxation system.
With this package of measures, the European executive aims for coordinated, swift and pragmatic action that will bring tangible results in the shortest possible time. Brussels reaffirms its commitment to support Member States in their common effort to restore Europe’s competitiveness and ensure affordable energy for all.