More than a dozen EU countries have pushed back against European Commission plans to make electricity cheaper than gas through preferential taxation, warning that Brussels is overstepping its powers.
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At a meeting of EU energy ministers in Luxembourg on Thursday, Germany, Italy, Malta, the Czech Republic, Bulgaria, Slovakia, Finland, Romania, Croatia, Poland, Latvia, Estonia and Hungary were among the countries calling for the controversial provision to be scrapped.
The proposal is part of the Commission’s efforts to encourage households and businesses to switch from fossil fuels to electricity, as demand from industry, data centres, heat pumps and electric vehicles continues to grow.
But the rising cost of expanding and operating Europe’s electricity grids is increasingly being passed on to consumers through higher bills.
The Commission proposal comes amid an energy crisis, exacerbated since the US-Israeli war against Iran which has sent prices soaring and intensified pressure on Brussels to ease the burden on households and industry.
Even before the Middle East conflict, European electricity prices were twice those in the US and China, prompting European manufacturers to demand “urgent and bold” action.
During an informal summit last February, EU leaders vowed to drop energy prices by making electricity taxation more favourable than natural gas in a bid to lower bills.
But several EU countries argue that tax policy should be dealt with in the ongoing revision of the Energy Taxation Directive, which requires unanimity, rather than being decided by a qualified majority vote, as the European Commission proposes.
Sweden’s energy minister Ebba Busch called for better regulation instead of more bureaucracy.
“Given the very significant differences in grids and the grid characteristics across the Union, there is no one-size-fits-all solution for tariff design,” Busch said.
Spain, Denmark and Luxembourg have backed the Commission, though they called for some flexibility.
“The proposals should include flexibility for member states to set clear political priorities for ambitious electrification policies to ensure pace and scale of grid expansion,” said the Danish permanent representative diplomat, Søren Jacobsen.
France sought a middle path, calling for the legal basis to be secured and suggesting the measure be tied to specific circumstances such as a gas crisis.
Luxembourg floated replacing the provision with a general obligation to promote electrification.
Brussels versus national control
The strongest opposition centred on the Commission’s plan to let it set common rules for how electricity grid charges are calculated across the EU, without having to seek fresh approval from member states and the European Parliament each time.
Italy, France, Germany, Slovakia, Poland, Spain, Finland and other countries argued that the plan would undermine the independence of national regulators and give Brussels too much power over decisions that they believe should be made at national level.
Finland noted that its parliament had formally concluded the proposal violates that principle.
“Member states must retain sufficient flexibility to reflect their national circumstances, investment needs and electricity systems. We are also concerned by the lack of comprehensive impact assessment,” Finland’s state representative Mika Nykänen said.
Energy Commissioner Dan Jørgensen held his ground in his closing remarks, saying the EU executive’s proposal “makes a lot of sense”.
The EU’s top energy chief said that the legal services of both the Commission and the Council judged the proposal legally sound.
“It (the legal clause) could have both an immediate and a structural impact on reducing our electricity bills. We should not deprive our consumers and industries of the benefits of this proposal,” Jørgensen told energy ministers.
The Irish Presidency, currently mediating EU negotiations, says it wants a compromise on network charges in December.
