The European Union proposed measures such as optimizing jet fuel distribution, as it unveiled a plan to navigate the energy crisis caused by the Iran war.
“AccelerateEU” — announced by the European Commission on Wednesday — gives member states the tools to curb energy prices and address potential fuel shortages, without undermining the bloc’s climate ambitions or triggering damaging competition between nations. A longer-term objective is to electrify the economy to avert future fossil fuel shocks.
While the situation is less acute for the EU than the crisis that followed Russia’s invasion of Ukraine — which sent gas prices sky-rocketing — it threatens to be more far reaching in terms of the commodities affected and the impact on the global economy. Already governments across the bloc have taken action to minimize the impact of rising prices on citizens and business.
“What more people realize than maybe three months ago is that the only way out is to bring climate competitiveness and independence much more hand in hand,” EU Climate Commissioner Wopke Hoekstra said in an interview. “We need to move to energy independence ASAP.”
Under the plan, the commission will put forward measures as early as next month to “optimize” jet fuel distribution among member states, and stands ready to propose changes to existing rules if shortages emerge. The EU’s executive arm will also coordinate the filling of gas storages among member states over the summer, reiterating the existing flexibilities in legislation.
Longer term, the EU is looking to double down on electrifying the economy to loosen the grip that fossil fuels have on the wider energy system. In the coming months, it will come forward with an electrification strategy and legislative proposals to ensure that power is taxed less than oil and gas.
EU leaders are set to discuss the plan at a meeting in Cyprus over the next two days. The commission will also present a catalog of demand-reduction measures ahead of an informal meeting of ministers next month. To date, the Iran war has increased the EU’s fossil fuel bill by €24 billion ($28 billion).
After the invasion of Ukraine, the EU weaned itself off Russian gas, yet in many cases swapped it for supplies from other countries, like the US. That’s left the continent exposed to global fossil fuel markets, where it has to compete with Asia for scarce supplies as the Strait of Hormuz remains effectively shut.
The need to cut energy demand after the start of the Ukraine war also shuttered many European industries, which have failed to bounce back even after prices declined.
Still, some crisis-era policies remain in place, such as gas storage targets to ensure the bloc has enough supplies for the heating season. The commission encouraged member states to use flexibility to fill their facilities up to 10 percentage points less than the overall 90% goal. It said that it stood ready to allow a further five percentage point deviation, if needed.