A proposal for a pan-European mechanism to support households and businesses during the international energy crisis was presented by the Minister of Environment and Energy, Costas Skrekas, at the informal EU Council of Energy Ministers, which met today in Ljubljana.
Mr Skrekas informed the Executive Vice-President of the European Commission, Frans Timmermans, and the Energy Commissioner, Kadri Simpson, about the letter. The letter points out, inter alia, that the exceptional circumstances prevailing in the European energy market have created an extremely difficult situation for European consumers, especially the most vulnerable, and that immediate action to offset the effects of the rising costs is becoming imperative.
The proposal provides for the establishment of a Transitional Compensation Fund, which will raise revenue from the auctions of the European Emissions Trading Scheme. It is estimated that for the effective support of European citizens for the winter period 2021-2022, an amount ranging from 5 to 8 billion euros will be required. The resources of the mechanism will be allocated to the Member States proportionally, taking into account the consumption of heating and electricity, as well as the GDP of each country, while it will be explicitly provided that the mechanism will be activated only in exceptional circumstances of high electricity costs. Bidding for future emissions rights could also be a way to reduce business exposure to rising pollution costs in the coming years.