The bloc’s carbon market is responsible for about 15 to 20 percent of the current electricity price hike, EU estimates suggest. Frans Timmermans, Vice-President of the European Commission and leader of the Green Deal, admitted that thanks to the record carbon price, governments had pocketed almost €11bn in additional revenues from January to September of this year compared with 2020.
European gas prices hit another all-time high on Wednesday, a surge that Green Deal sceptics have attributed to the EU’s drastic project to make the EU climate-neutral by 2050.
While a shift towards greener technology seems inevitable, many argue phasing out fossil fuels is synonymous with pushing up energy costs for citizens.
The controversy goes far beyond supporting or not Europe’s ambitious climate targets. Rather, it is about how these targets will affect consumers – in and out of the bloc.
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Market prices in the UK have quadrupled in the past year, and consumers have already been warned about higher bills and more frequent energy failures at home.
With the cold kicking in and the official “winter gas season” — the period when heating demand is higher — having started on Friday last week, the gas crisis is now a particularly concerning subject for Britons.
In danger of becoming a symbol of hiking energy prices, the Green Deal goals and how to attain them realistically have been discussed by EU members at a gathering on Wednesday after a handful of countries — France, Spain, Greece, the Czech Republic and Romania — called for a coordinated response to the dramatic price surges.
Kadri Simson, the EU energy commissioner said: “This price shock cannot be underestimated.”
“If left unchecked, it risks compromising Europe’s recovery.”
Mr Timmermans said: “We need to be clear that this is the market.”
Though he assured to be working on finding a “consensus at EU level on how we can protect our citizens against undue price hikes”, he stressed how crucial it is that the bloc doesn’t leave “the climate crisis untackled”.
“The EU climate law is our guiding principle, and we will not open that law again,” Mr Timmermans insisted.
He added: “Our children will wage wars over water and food if we don’t tackle the climate crisis.”
The European Commission will next week publish a “toolbox” of measures that European governments can take in the short run to respond to the gas price surge.
It reportedly includes policies to protect European families from higher electricity costs in the household.
Power generators in the bloc buy credits to cover the cost of pollution. The purchases of these credits have brought in additional revenues for EU governments, Mr Timmermans told ministers at their meeting in Slovenia, the country that currently holds the EU’s rotating presidency.
The proceeds of these credit purchases go into EU governments’ budgets – available for use to protect consumers from surging prices.
European Commission president Ursula von der Leyen said, in line with Mr Timmermans, described the gas price surge as “a serious issue” at the same time as proof of the bloc’s support for renewable energy.