Europe News

Kadri Simson, Energy Commissioner: “We need a price cap for Russian gas”


The approach towards Russia and the other partners must be different. Personally, I also think it is necessary to introduce a price cap for Russian gas, because we don’t have any gas sanctions yet. So even if we face the crisis and we don’t have enough supplies, households are protected.”Kadri Simson,European Commissioner for Energy

Rampant inflation, unhealthy dependence on Russian energy and the risk of power cuts. The European Commission is facing one of the most worrying winters on record. So what solutions can it provide? And how does he plan to mitigate the impact of rising bills on citizens? Euronews journalist Aïda Sanchez took part in the global conversation with European Commissioner for Energy Kadri Simson.

Aida Sanchez, Euronews

The President of the Commission has just announced new sanctions. What do you think they will be?

Kadri Simson, European Commissioner for Energy

Well, it’s a work in progress. And we’re ready to react when we find that previous packages have left something out of reach. And that is what you can expect from the ongoing work to ensure that Russia does not gain unfair extra revenue that will help fund its war against Ukraine.

Aida Sanchez, Euronews

And what are these things that have been excluded from the scope previously, like concretely what proposals?

Kadri Simson

Well, it’s a matter of implementation. And during the implementation, while you already have a consensus agreement on certain sectors and services, you discover that you need to be well targeted more precisely.

Aida Sanchez, Euronews

And will they also focus on energy?

Kadri Simson

Energy has already been the subject of several sanctions. Personally, I also think it is necessary to introduce a price cap for Russian gas, because we don’t have any gas sanctions yet. But it is unfair that Russia, which manipulates its supplies, partially covers the cut volumes with higher prices.

Aida Sanchez, Euronews

This cap on Russian gas prices has been mentioned before, but it was not in the latest proposal from the commission. Why wasn’t he there?

Kadri Simson

Many questions have been asked about how we will ensure our security of supply before this winter and next year. But we do know that Russia does not have alternative pipeline connections that allow it to sell the gas that it will not sell to its existing buyers who have valid contracts. They don’t have the chance to sell it to someone else. And that’s why the price gap could be much bigger, so they still have the only opportunity to earn income. But they are cut off from the surplus income that is currently available to them as well.

Aida Sanchez, Euronews

And do you think that other Member States will also want to have this price cap on Russian gas? Because some of them didn’t want to before?

Kadri Simson

Indeed, it is a very complicated question because we have to pay attention to our available volumes to be able to get through this winter in complete safety. At the same time, Member States have already done a lot. They have implemented measures to reduce the overall gas consumption and they have had great success in the storage filling activities. So right now, it’s more than 86% full, our underground gas storage. And that’s more than we just agreed in mid-summer.

Aida Sanchez, Euronews

Some countries also wanted a gas price cap for all gas imported into Europe. Do you think this can work?

Kadri Simson

The approach towards Russia and the other partners must be different. And at the same time, we have very good cooperation with the countries that are connected with us through our gas pipeline, Norway, Azerbaijan and Algeria, all of them. We have existing energy dialogues and of course we will contact them and try to find a way to make the price more affordable. And then of course there is the LNG market. We need to ensure that this is not manipulated and that there are references that allow us to attract the additional LNG volumes that we need.

Aida Sanchez, Euronews

So, from what you said, I understand that on the Commission side, there will be no price cap proposal on all gas imports. Is it a no from the European Commission?

Kadri Simson

No, work is in progress. But our biggest concern is how do we design something like this so that our volumes and those we can attract don’t hurt.

Aida Sanchez, Euronews

And now, with regard to the measures proposed by the Commission, what will be the first measures that citizens will see? Because both the solidarity tax and market revenues are technically a bit difficult to implement.

Kadri Simson

Well, in the 27 EU Member States, citizens have already had the chance to see some of the results. Last week’s proposal addresses this market situation where there is a shortage of supply.

Aida Sanchez, Euronews

But the money that the Commission intends to collect thanks to these two taxes, when will it be available?

Kadri Simson

Price caps for those power generators that generate electricity at significantly lower costs than, for example, gas-fired power plants. This money will be available for governments to use and support retail consumers and small businesses, and it will be available immediately.

Aida Sanchez, Euronews

And the solidarity contribution? When will we see this?

Kadri Simson

The solidarity contribution then addresses the revenue, the excess revenue that the fossil fuel companies are earning this year. This means that it does not provide additional contributions until the end of the year.

Aida Sanchez, Euronews

In the proposal, there is also a mandatory 5% reduction in electricity demand. How will the European Commission ensure that Member States follow suit?

Kadri Simson

This is a binding obligation and it means that Member States do know what to do. Well, demand response and good contracts with large consumers are in place. It just means we need to use them more frequently.

Aida Sanchez, Euronews

Will we see a situation where citizens are also needed to reduce their demand? So should citizens also actively save energy?

Kadri Simson

Well, households are protected customers. So even if we face a crisis and we don’t have enough supplies, households are protected. But saying that doesn’t mean that each of us should do everything we can to save energy. It is a reasonable attitude. This helps us reduce bills. But right now, if millions of Europeans behave properly and do not waste energy, it means that our industry does not have to face this situation as well, that rationing is necessary.

Aida Sanchez, Euronews

Thank you very much, Commissioner, for being here. Thank you for your time.

euronews Gt

Not all news on the site expresses the point of view of the site, but we transmit this news automatically and translate it through programmatic technology on the site and not from a human editor.
Back to top button