We support the measures proposed by the European Commission aimed at reducing dependance from Russian oil and gas, curbing EU gas demand, stabilizing long term supply through joint gas purchases, and increasing gas storage capacity and batteries.
We also support the introduction of clawback mechanisms aimed at capping excess profits. If such measures do not prove sufficient, then stronger regulation options might be warranted.
We strongly regret, however, the proposal to finance some of the measures through the sale of additional carbon credits from the EU ETS Market Stability Reserve, as we believe that energy security should not come at the cost of weaker climate action.
We also note that more could be done to curb energy demand in the EU, which would yield additional environmental co-benefits. The rollout of 5G and the allowance of Proof-of-Work mining in the EU are examples of not indispensable or wasteful energy consumption.
Finally, we note that, while Mrs. Von Der Leyen stated the need to end speculation in EU energy markets last October, no measures have been proposed so far to assess and address if needed speculation in commodity derivatives. In light of the very significant increase in the TTF churn ratio over the past decade, there may be a need to investigate further this point.
Download brief: Preliminary considerations on the volatility of EU energy prices 2.0