EU announces measures to tackle energy costs and hurt Russian profits
Alex Cadier in Brussels
Commission President Ursula von der Leyen announced new measures to tackle Europe's energy crisis. /European Commission

Commission President Ursula von der Leyen announced new measures to tackle Europe's energy crisis. /European Commission

The European Commission has announced a number of "immediate measures" designed to slow skyrocketing energy prices and reduce the amount of money the bloc sends to Russia for its energy supplies.

Commission President Ursula von der Leyen announced five measures due to be discussed by EU energy ministers later this week. 

Most significant among them is a proposal to cap the price at which European countries can buy gas from Russia, forcing Moscow to choose between selling cheap gas to the EU or not selling to the bloc at all.  

"We aim at lowering the costs of gas and therefore we will propose a price cap on Russian gas," said Von der Leyen. "Of course, the objective here is very clear. 

"We all know that our sanctions are deeply grinding into the Russian economy with a heavy negative impact, but Putin is partially buffering through fossil fuel revenues. So here the objective is we must cut Russia's revenues, which Putin uses to finance his atrocious war in Ukraine."


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The commission is also proposing mandatory targets for reducing electricity consumption at peak times, in line with other consumption reduction measures agreed by the EU. 

A revenue cap for energy companies that don't use gas to generate electricity is also being considered. Companies with low production costs, like wind or solar, will no longer be able to sell electricity at the same high prices as providers which use gas and tend to have higher costs. 

Fossil fuel companies will also be expected to pay a "solidarity contribution" on profits, a move the EU is eager not to brand as a windfall tax. 

Finally, energy suppliers facing volatile markets will be given liquidity support to help with any cashflow issues related to unpredictable market forces. 

These proposals formalize a dramatic shift in EU energy policy and confirm the move away from relying on Russian fossil fuels. 

Moscow has already responded to the suggestion of a price cap by saying that Russia would cut off all gas supplies to Europe were the measure to be adopted. 

This could cause some EU countries to think twice ahead of the EU energy ministers meeting on Friday, where the commission's proposals are due to be discussed before being formally proposed to member states by the Commission on Tuesday.

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