Nicosia: EU leaders discussed on Friday, the new toolbox proposed by the Commission, to address the impact of Iran's war crisis on energy prices, at the Informal European Council, held in Nicosia, under the Cyprus' Presidency of the Council of the EU.
According to Cyprus News Agency, at the press conference following the meeting, Cyprus President and President of the EU Council, Nikos Christodoulides, said that "we had a productive discussion on the basis of the comprehensive and timely toolbox of measures presented by the Commission." Energy was featured prominently in Friday's discussion, he noted, focusing on how to tackle the energy crisis through specific measures, and how to build on the Energy union, "which is a key component of our Union's independence."
In order to build up a true energy Union, President Christodoulides stated that "we work to accelerate our connectivity, to effectively end our energy dependency," noting that the Cyprus Presidency is diligently working on the grids package. President of the European Council, Antonio Costa, stressed that, in the long term, there is only one direction for Europe: accelerating the energy transition and developing domestic clean energy sources. "This is the only way to reduce dependencies and ensure our energy security," Costa emphasised.
President of the European Commission, Ursula von der Leyen, who has recently announced a toolbox to tackle the impact of the energy crisis, said that after 54 days of conflict in Iran, "the impact is tangible." She mentioned that since the beginning of this conflict, "our bill for imported fossil fuels has increased by over 25 billion euros without a single molecule of energy in addition." Therefore, she asserted, "we need to reduce our over-dependency on important fossil fuels, because these make us vulnerable to crises. And we need to boost our home-grown, affordable, clean energy sources, renewable and nuclear, that give us independence and stability. They are produced here in the European Union, and they are cheaper."
On the immediate measures the Commission proposed, she said that the energy mix in every member state is different, and this is the reason why the Commission has not presented something "one-size-fits-all," but a toolbox for the different situations in the different member states. She stressed that the action must be targeted to those who need it most, it must be temporary, with a clear end date, and above all, it must be coordinated across Europe for maximum impact.
She added that the same mindset will be applied when it comes to fuel reserves, especially jet fuel and diesel, where markets are tightening. Moreover, she highlighted that any action should take into account how the EU is going to change its energy supply over time. "We will accelerate the electrification of our Union. By the summer, we will present the electrification action plan with an ambitious target," she said, stressing that it's a matter of economic security and independence, as well.
Answering a question, von der Leyen said that "it is very important that we invest massively in energy infrastructure. We have spoken a lot about energy sources, but not enough about the fact that we need grids and interconnectors." She added that significant research and development in storage, meaning batteries, and in so-called flexibility, such as artificial intelligence, to ensure that energy flows where it is needed most and that the energy mix is optimal, is essential. "This requires substantial investment," she pointed out.
She noted that the current Multiannual Financial Framework has provided around pound 300 billion for energy investments in total, of which pound 95 billion remain unused. "I have called on Member States to make use of these funds. This is very important," she said. She also referred to the grids package, saying that "we presented this in December. The initial plan of the co-legislators was to have it ready by the end of this year. We have asked whether it can be accelerated, and this is now being considered, so that the final decision can come earlier and implementation can begin, because it will greatly support investment in infrastructure."
Answering on the general escape clause, that allows Member States to temporarily deviate from budgetary requirements during severe economic downturns or crises, the President of the Commission said that it can only be activated in the case of a severe economic downturn in the euro area or in the European Union as a whole. "Fortunately, this is not the situation we are currently in." However, she added that developments are being closely monitored and that ECOFIN will discuss the matter in detail. She also noted that the state aid framework has just been made more flexible for investments or support in situations of energy scarcity and high energy prices.