Council agrees on emergency measures to reduce energy prices

Commission proposes a regulation to address high energy prices

The European Commission issued a communication on the 14th of September 2022, calling for:

• A measure that temporarily targets and reduces the revenues of electricity producers;
• A measure that temporarily establishes a solidarity contribution on surplus profits in the fossil fuel sector;
• A set of 2 electricity demand reduction targets.

The Commission proposed these measures in order to stabilise uncertainty in the EU electricity market, reduce the extraordinarily high prices caused by the weaponisation of gas supply by Russia, soften the burden for consumers and businesses, and secure the European economy from heavy inflation.

Council agrees on emergency measures to reduce energy prices

On the 30th of September 2022, the Council of the European Union announced it had agreed to the European Commission’s proposals. The approved regulation sets out a voluntary overall reduction target of 10% of gross electricity consumption and a mandatory reduction target of 5% of the electricity consumption in peak hours. Member States will identify 10 % of their peak hours between 1 December 2022 and 31 March 2023 during which they will reduce the demand. Member States will be free to choose the appropriate measures to reduce consumption for both targets in this period.

The regulation will be formally adopted by written procedure in early October. It will then be published in the EU’s Official Journal and enter into force on the next day. The measures are temporary and extraordinary in nature. They will apply from 1 December 2022 to 31 December 2023. The reduction targets of energy consumption shall apply until 31 March 2023. The mandatory cap on market revenues shall apply until 30 June 2023. Member States also introduced specific exemptions for Cyprus and Malta.

To read more about the regulation, read our summary via the button below.

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