European Union mulls redistribution of profits from fossil fuel providers to offset energy woes

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The European Commission has hatched a plan to redistribute the profits from fossil fuel companies and impose limits on energy consumption.

European Commission President Ursula von der Leyen said Wednesday that the organisation, which governs the European Union, is weighing its options to help member states deal with the shortage of resources stemming from Russia’s freeze in energy exports. This includes the Nord Stream 1 pipeline, which Russia paused in response to economic sanctions over its invasion of Ukraine. 

Speaking in her address, von der Leyen blamed Russia for the energy crisis, which is threatening to plunge Europe into darkness this coming winter. 

“Russia keeps on actively manipulating our energy market,” von der Leyen stated, adding that the cost of natural gas has increased tenfold. “But Europeans are also coping courageously with this.”

As the European Commission mulls its options to prevent blackouts across the continent, multiple European countries have begun to impose regulations on thermostats and appliance usage, the Daily Wire reported. 

The European Union, in accordance with the European Green Deal and the Paris Climate Agreement, abides by the official goal of becoming “a climate-neutral society” by 2050.

Though von der Leyen acknowledged last week that low hydropower generation caused by droughts is partially responsible for high energy prices in Europe, she said that “the climate crisis” is the ultimate impetus for the weather conditions and called for the elimination of all fossil fuel dependence.

Addressing the European public, von der Leyen said that she intends to propose standards for the economic bloc’s member states to reduce their overall consumption of electricity, and fund existing use through the redistribution of profits from energy companies. 

“We are proposing a cap on the revenues of companies that produce electricity at a low cost. These companies are making revenues they never accounted for, they never even dreamt of,” von der Leyen said. “In our social market economy, profits are good. But in these times it is wrong to receive extraordinary record profits benefitting from war and on the back of consumers. In these times, profits must be shared and channeled to those who need it the most.”

Von der Leyen stated that energy providers, which are raking in massive profits, have a “special duty” to help with the crisis. 

“Major oil, gas and coal companies are also making huge profits. So they have to pay a fair share — they have to give a crisis contribution,” she said. “These are all emergency and temporary measures we are working on, including our discussions on price caps.”

Prior to the conflict in Ukraine, Russia’s shipments of liquid natural gas accounted for 40% of Europe’s supply in 2021, a figure that has since dropped to 9%. Germany has seen its dependence decrease from 55% to 35%.