Lithuania strongly advocates setting a price cap for gas

Date

2022 09 10

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On 9 September 2022, Minister of Energy Dainius Kreivys participated in an extraordinary meeting of the European Union Transport, Telecommunications and Energy Council in Brussels, the Kingdom of Belgium. The meeting of the Council was convened to address the drastically rising energy prices, and to discuss possible measures that EU Member States should take immediately in responding to the current market situation.

No decisions were taken on the aforementioned measures. Discussions will continue among the EU Member States regarding the proposed possible measures that the European Commission plans to present in the near future. During the Council, the ministers also discussed the issue of preparedness for winter and the state of play of the preparedness of their countries for this winter.

Minister Kreivys thanked the European Commission and the Czech Presidency of the Council of the European Union for the proposals for measures that EU Member States should take immediately in response to rising energy prices. The minister noted that the EU Member States must find a consensus on a package of measures that should be applied at the EU level equally to all EU Member States in order to avoid market distortions.

The minister expressed Lithuania's support for the measures targeted at decoupling the price of natural gas from electricity. The minister noted that the record-breaking electricity prices are directly affected by the inflated gas prices that have resulted from Russia's manipulative measures and energy blackmail. This requires a unified response from all EU Member States. Measures to decouple electricity prices from gas prices are the only appropriate way to manage the current market situation. The minister noted that these measures must be implemented with EU financial assistance, while also ensuring the uninterrupted supply of natural gas to the EU Member States.

Minister Kreivys could not agree to the European Commission's proposal for a taxation measure on the profits of inframarginal power generation technologies (which include nuclear, lignite and most renewables — except for some types of hydropower, biomass and biogas) aimed at providing EU Member States with financial resources to finance retail price interventions. Presenting Lithuania's adamant position on this issue, the minister drew the attention of the European Commission and EU Member States to the negative consequences that implementation of this measure could cause. “Any attempts to implement this measure will have a negative impact on the functioning of the EU's internal energy market. It will also create an uneven playing field for businesses due to different levels of government support. The EU internal market must remain a priority for all EU Member States. Therefore, no actions can be taken that could jeopardise its smooth functioning.”

The package of measures to curb electricity prices will continue to be discussed among EU Member States, and will be addressed at the level of EU energy ministers at the end of this month. Lithuania is ready to rally the positions of all of the EU Member States in order to either prevent the proposal for a taxation measure on the profits of inframarginal power generation technologies from being adopted, or to modify it in a direction beneficial to Lithuania.