LONDON (Bloomberg) - The European Union’s executive will explore the possibility of national governments jointly purchasing and storing natural gas to boost the region’s energy resilience and avoid future price shocks.
The European Union’s executive will explore the possibility of national governments jointly purchasing and storing natural gas to boost the region’s energy resilience and avoid future price shocks.
The European Commission is set to examine options for strengthening the region’s leverage in talks with third-country suppliers as part of a plan to avoid the energy crunch undermining an economic recovery. The plan will also offer guidance on how to design tax cuts, direct support for the most vulnerable and state aid for companies, according to a person familiar with the draft EU proposals.
About 20 international locations have taken motion already to blunt the influence of the disaster or are within the strategy of doing so, in accordance to the draft. These measures could be financed with revenues from authorities auctions of permits within the EU carbon market and different instruments akin to environmental taxes. The Commission additionally notes that member states have the leeway to appoint a provider of final resort.
Gas and energy costs have soared to information as Europe is nearing the winter heating season, prompting some industrial giants to curtail manufacturing and fanning social considerations about sky-rocketing payments for households. The spike comes as demand rebounds with the consequences of the pandemic waning, and coincides with restricted provides from Russia and Norway.
While Russia is fulfilling its long term contractual obligations, lower-than-expected volumes are coming from the nation given the size of present demand and its exporter Gazprom PJSC is providing little or no further capability.
Energy costs are anticipated to fall by April 2022, in accordance to the EU draft, however are seemingly to stay above common in contrast with earlier years.