EU ministers to discuss energy prices at extraordinary Energy Council meeting on 26 October

The EU energy ministers will meet at an extraordinary Council meeting in Luxembourg on Tuesday 26 October 2021. The only items on the agenda are the rising energy prices and the Commission’s proposed measures to mitigate them. Minister of Economic Affairs Mika Lintilä will represent Finland.

The background paper prepared by the Slovenian Presidency invites the Member States’ views on two questions: 1) How could EU level action support and complement the immediate measures taken by Member States to mitigate the impact of rising energy prices? 2) Are the medium-term measures proposed by the Commission sufficient to address the future energy price fluctuations, and what further measures could be implemented at EU and national level?

The European Council, which consists of the Member State’s heads of government, held an extensive discussion on the impact of rising energy prices on citizens and businesses on 21 October. The European Council invited the Commission and the Energy Council to consider medium and long-term measures that would prevent excessive fluctuations in prices. At the same time, it is important to strengthen the flexible use of energy in the EU and ensure a green transition. These measures will also be discussed at the Energy Council meeting. 

In its communication, the Commission proposes a number of measures for the Member States to mitigate the effects of higher energy prices. The measures could mainly be implemented within the framework of current legislation, and the communication does not contain any significant new legislative initiatives. As possible short-term measures, the Commission proposes temporary reductions to energy taxes and various lump sum payments to customers who have suffered the most. The measures could be funded, for example, by means of increased income from the emissions trading. In the longer term, the Commission proposes voluntary gas reserves for the EU, among other measures.

“The medium-term measures proposed by the Commission seem to be going in the right direction. Any legislative proposals at the EU level should always be prepared carefully. The Commission’s gas package will be discussed at the turn of the year. That would be an appropriate time to discuss the Commission’s proposal on gas reserves,” says Minister of Economic Affairs Mika Lintilä.

According to the Europe Communication submitted by the Government to Parliament on 20 October 2021, Finland considers the Commission’s measures to alleviate the situation proposed in its communication to be justified and appropriate in principle. However, the EU should not take any action that would interfere with the emissions trading system or the electricity market. 

In Finland’s view, short-term adjustments to market models or restrictions of competition will lead to inefficiency and higher energy prices in the long term. When considering possible additional measures or obligations, the different national circumstances and the national preparedness systems in force in the Member States should be taken into account. 

The discussion on the temporary increases to energy prices should not lead to the questioning of the climate package’s level of ambition. The climate package is part of the solution, not the primary cause of the price increases. It is also important to refrain from creating new income distribution mechanisms within the EU based on the rising prices. 

As prices rise, national measures should take into account the needs of the most vulnerable consumers. In Finland, the position of such consumers has been safeguarded through national social policy measures. 

Inquiries:
Riku Huttunen, Director General, Ministry of Economic Affairs and Employment, tel. +358 50 431 6518
Tatu Pahkala, Senior Adviser, Ministry of Economic Affairs and Employment, tel. +358 50 396 1285
Teppo Säkkinen, Special Adviser to the Minister of Economic Affairs, tel.  +358 50 516 2868
Nina Alatalo, Adviser to the Minister of Economic Affairs (EU and International Affairs), tel. +358 50 431 8015
Eero Karjalainen, Senior Specialist, Ministry of Economic Affairs and Employment, tel. +358 50 501 7746 (EU energy coordination within the Ministry)
Ville Niemi, Senior Specialist, Permanent Representation of Finland to the EU, Brussels, tel. +32 479 470 175