Ireland could get €2bn to deal with energy crisis as EU ministers finally agree to a windfall levy on profits

European Union energy ministers on Friday approved a package of measures to ease the energy crisis, including a windfall levy on fossil fuel company profits, but an agreement on capping gas prices remained off the table.

ith energy prices skyrocketing across Europe since Russia’s invasion of Ukraine, EU member countries have reached an agreement on European Commission proposals that the bloc’s executive says could help save $140 billion Raise dollars to help people and businesses affected by the crisis.

The measures include a levy on excess profits from companies that produce or refine oil, gas and coal. The plan’s other two main elements are a temporary cap on revenue from low-cost electricity producers such as wind, solar and nuclear companies, and a commitment for the 27 EU countries to reduce electricity consumption by at least 5 percent during peak price hours.

The text is due to be adopted next week and will come into force soon thereafter.

Estonian Economy and Infrastructure Minister Riina Sikkut said that “the most promising measure to actually lower the average price is still to reduce peak consumption”.

Sikkut stressed that any hardship this winter was nothing compared to the price Ukrainians would have to pay. “We must not forget that we are in a war situation. Ukrainians are paying with their lives, so we may be temporarily paying higher bills or grocery store prices,” she said.

However, the measures will not have an immediate impact on gas prices, which have been boosted by Russia’s tightening.

“This is just the first piece of the puzzle and an immediate patch,” said Czech Industry and Trade Minister Jozef Sikela, who chaired the Brussels meeting. “We must not stop here; we are in an energy war with Russia; Winter is coming. We must act now… Now means now. Now is not in a week and definitely not in a month.”

A group of 15 member countries have urged the European Commission – the EU’s executive arm – to propose a wholesale price cap for gas as soon as possible to help households and businesses struggling to make ends meet.

“Demanded by more and more member states since the beginning, the price cap is the only measure that will help each member state to moderate inflationary pressures, manage expectations and provide a framework for possible supply disruptions and limit the incremental profits in the industry,” they said.

The proposal will be discussed during Friday’s meeting but has yet to gain unanimous support, with Germany notably blocking it.

The European Commission has warned in an analysis that such a cap could weaken the bloc’s ability to secure gas supplies on the world market. But it is open to the idea of ​​introducing a price cap on Russian gas to mitigate the effects of the crisis while negotiating a lower gas price with other suppliers.

“We are negotiating with our reliable pipeline gas suppliers. If this does not bring any results, a price cap is possible. Russia is not a reliable partner. In fact, this is the source of the problem,” said Kadri Simson, EU Energy Commissioner. “I strongly believe that we need a price cap on all Russian gas imports, at a level that still makes it attractive for them to export to Europe.”

According to the European Commission, Russian gas supplies to the EU fell by 37 percent between January and August this year.

Earlier, Environment Secretary Eamon Ryan said Ireland could get up to €2 billion from such a windfall tax.

Speaking from Brussels, Mr Ryan said the text had been agreed and the measures would be useful to Ireland.

“Our officers here in my department have worked with the (EU) Commission for a long time,” Mr Ryan told RTE Radio 1’s Morning Ireland programme.

“We now have good text, we have a good mechanism that allows us to identify some of the windfall profits that go to energy companies and be able to bring them back to help Irish households and businesses add something that has been beginning to do done at home this week.

“I expect we will reach an agreement, it will be useful for Ireland,” he added.

When asked how much it would raise for Ireland, the Green Party leader replied: “One to two billion (euros) is sort of the expectation of what we should expect.

“But that depends on so many different factors — you can’t really tell, but it’s so much money.”

On Tuesday, the government announced €600 worth of energy credits for households as part of its €11 billion budget measures.

The credits of €200 will be paid out in three installments over the coming months.

But despite mounting opposition pressure, the government refrained from imposing a cap on energy prices to give customers certainty about their energy bills.

France, Austria, Italy, the Netherlands, Denmark, Poland, Slovakia and the Czech Republic are among a number of EU countries that have introduced an energy price cap.

Mr Ryan said his German counterpart had told him they had not yet decided on a price cap.

“They haven’t really decided on a price cap,” he said. “Maybe they make some mechanism. But they are working on it and are not done yet.

“Like us, they are adjusting and evolving their position, and we will continue to do so.”

Mr Ryan described the extent of the budget interference earlier this week as “significant”.

However, he said that the measures had to be “continued to be reviewed”.

“What we have agreed and said is that we will look and see how they work to get through this winter period.

“Especially those who find themselves in very difficult situations within the social assistance system can turn to social services for additional support.

“We don’t want anyone to get cold this winter or suffer from real acute energy starvation.” Ireland could get €2bn to deal with energy crisis as EU ministers finally agree to a windfall levy on profits

Fry Electronics Team

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