PES hails European agreements to tame energy prices, lower emissions and protect the vulnerable

File photo: European Commission Executive Vice-President Frans Timmermans at a press conference on delivering the European Green Deal, July 2021. Source: EC - Audiovisual Service

File photo: European Commission Executive Vice-President Frans Timmermans at a press conference on delivering the European Green Deal, July 2021. Source: EC - Audiovisual Service

European socialists and democrats today applaud major progress on delivering affordable energy for citizens now, as part of a longer-term strategy for a socially just transition to a sustainable future.

Meeting today, EU energy ministers backed a market correction mechanism – a gas price cap – to keep energy prices in check, a key socialist demand for citizens facing skyrocketing bills this winter.

Progress has also been made on socialist demands for a socially fair green transition, with the European institutions reaching a political agreement yesterday on the Emission Trading System (ETS) and the Social Climate Fund – two core legislative proposals of the ‘Fit for 55’ package spearheaded by progressive European Commission Executive Vice-President Frans Timmermans.

PES President Stefan Löfven stated:

“We have always said that a European solution is needed to lower energy bills for both people and businesses, and especially vulnerable households and smaller businesses. The measures agreed today are a welcome step to reassure citizens who are worried about whether they can afford to turn on the heating this winter.

“The negotiations on this mechanism were not easy, but the EU has shown that it can rise to the challenge. The conversation is not over though, we must remain vigilant on the social consequences of this crisis. That is why we proposed a European Pact for Affordable Energy and Social Cohesion in October and why we will keep fighting to ensure affordable and clean energy is available for all.”

The market correction mechanism agreed by EU ministers will regulate the wholesale price of gas by setting price cap parameters to tame price hikes. It is part of a basket of agreed measures to regulate the price of energy in Europe though cross-border solidarity measures, joint gas purchases and a framework for accelerating the licensing of renewable projects. 

On the Fit for 55 package, President Löfven added:

“I want to thank Frans Timmermans for ensuring that we are on course to achieve our Green Deal targets. Sunday was a major milestone for our progressive ambition for a climate neutral EU by 2050. Thanks to this agreement, more companies will lower emissions, there is more funding to modernise our industries, buildings and road transport sectors, and there is more support for vulnerable households. With the Social Climate Fund we are making sure the Green Deal has a red heart.”

This Fit for 55 progress comes only days after the EU deal reached on establishing a Carbon Border Adjustment Mechanism (CBAM) to reduce ‘carbon leakage’ and ensure higher environmental standards for goods being imported in Europe. Once again, European progressives – Frans Timmermans, European Commissioner Paolo Gentiloni in the European Commission and Mohammed Chahim in the European Parliament – were decisive.

Under the political agreement reached on Sunday by the European Council and the European Parliament, the target of emissions reduction by 2030 covered by the EU ETS has increased to 62%. Sectors covered by CBAM receiving free CO2 certificates – cement, aluminium, fertilisers, electric energy production, hydrogen iron and steal – will see those certificates phased out by 2034, and the maritime sector is also brought into the scope of ETS.

Sunday’s deal establishes a EUR 86.7bn Social Climate Fund to help vulnerable households and micro-businesses, locks-in an increased Modernisation Fund, and creates a new emissions trading system for building and road transport.

Stefan Löfven

Stefan Löfven

PES President