Draft shows that the EU's plan to reduce electricity taxes and move away from fossil fuels faster is a result of war.
A draft document revealed that the European Union intends to lower electricity taxes and accelerate the expansion of clean technologies to protect consumers from rising oil and gas prices. This is part of its plan to counteract energy impacts caused by Iran's war.
Europe's heavy dependence on imports of oil and natural gas has exposed it to a spiraling price since the Strait of Hormuz was closed, effectively closing a crucial global shipping route for oil and natural gas, and Tehran began attacking the energy infrastructure of the Middle East.
The draft European Commission's proposal is due to be published 22 April. It includes short-term energy saving measures, plans to wean Europe faster off fossil fuels, and to protect Europe from future oil supply disruptions.
"The benefits of the transition clearly outweigh its cost." The draft stated that Europe could not afford to be exposed to energy shocks. Every delay in investing in energy transition will result in a greater cost to society later.
According to a draft, the EU executive will propose in May legal changes to the bloc's taxation laws that would "ensure that electricity is taxed below the rate of fossil fuels and make it easier to governments to reduce energy-intensive industries electricity taxes to zero."
The EU said it will also provide a list of energy-saving technologies and investments to replace oil and natural gas next month, as well as a legal proposal that requires countries to encourage investments in "smart grid" technologies in order to bring in more clean energy sources.
Bloomberg News reported the draft earlier Tuesday.
Gas prices in Europe nearly doubled within three weeks of the U.S./Israeli attack on Iran, which began on 28 February. Despite a slight decline since then, they were still 35% higher than pre-war levels as of Tuesday.
The EU would also step in to coordinate the filling of gas storage tanks by countries, starting this month. This will help to prevent price increases caused by companies buying at the same time.
The draft also stated that Brussels plans to propose an electric target by summer to encourage industries to switch from fossil fuels to electrical power.
A spokesperson for the European Commission declined to comment on this?draft document. Recent attempts to change EU tax rules have failed. The 2021 Commission proposal for a change in electricity taxes, which was also intended to encourage the switch from fossil fuels, is still stuck. (Reporting and editing by Kate Abnett)
(source: Reuters)
