Energy Commissioner Kadri Simson: “We need a price ceiling for Russian gas”

** The approach towards Russia and other partners must be different. Personally, I also believe that this is necessary to introduce a price ceiling for Russian gas because we do not yet have sanctions on gas. So even if we are facing the crisis and we don’t have enough supplies, families are protected. “** Kadri Simson,European Commissioner for Energy

Dizzying inflation, unhealthy dependence on Russian energy and the risk of power outages. The European Commission faces one of its most troubling winters on record. So what solutions can it provide? And how does it intend to lighten the impact of rising bills on citizens? Euronews journalist Aïda Sanchez joined the Global Conversation with European Commissioner for Energy Kadri Simson.

Aida Sanchez, Euronews

The President of the Commission has just announced new sanctions. What do you think they will be?

Kadri Simson, European Commissioner for Energy

Well, this is work in progress. And we are ready to react when we see that previous packages have left something out of scope. And this is what you can expect from the ongoing work to ensure that Russia will not earn additional income which is unfair and which will help it finance their war against Ukraine.

Aida Sanchez, Euronews

And what are those things that have been previously overlooked, how concretely which proposals?

Kadri Simson

Well, it’s a matter of implementation. And during implementation, when you already have a consensus agreement on certain sectors and services, you find that you need to be well targeted more specifically.

Aida Sanchez, Euronews

And will they also focus on energy?

Kadri Simson

Energy has already been the subject of several sanctions. Personally, I also believe that this is necessary to introduce a price ceiling for Russian gas because we do not yet have sanctions on gas. But this is unfair, that Russia which is manipulating with its supplies will partially cover the cut volumes with higher prices.

Aida Sanchez, Euronews

This price limit for Russian gas was mentioned earlier, but it was not in the commission’s latest proposal. Why wasn’t it there?

Kadri Simson

There have been many questions about how we will ensure our security of supply before this winter and next year. But we know that Russia has no alternative pipeline connections that allow them to sell the gas they won’t sell to their existing buyers who have valid contracts. They don’t have the ability to sell it to someone else. And that is why the price gap could be a step further so that they still have the only opportunity to earn some money. But they are cut off from the excess revenue that is currently available to them as well.

Aida Sanchez, Euronews

And do you think other Member States will also want to have this cap for Russian gas? Why did some of them not want to before?

Kadri Simson

Indeed, this is a very complicated issue because we have to take care of our available volumes so that we have to deal safely this winter. At the same time, Member States have already done a lot. They have implemented measures to reduce overall gas consumption and have been very successful in storage filling activities. So right now, this is more than 86% full, our underground gas depot. And that’s higher than we agreed in mid-summer.

Aida Sanchez, Euronews

Some countries also wanted a gas price cap on all gas imported into Europe. Do you think this can work?

Kadri Simson

The approach towards Russia and the other partners must be different. And at the same time, we have very good cooperation with the countries that are connected with us via our gas pipeline Norway, Azerbaijan and Algeria, all of them. We have existing energy dialogues and of course we will contact them and try to find a way so that the price is more accessible. And then there is obviously the LNG market. We need to be sure that this is not being manipulated and that there are benchmarks that allow us to attract additional volumes of LNG that we need.

Aida Sanchez, Euronews

So, from your words, I understand that on the Commission’s side there will be no proposal on a ceiling for all gas imports. Is this a no from the European Commission?

Kadri Simson

No, the work is in progress. But our biggest concern is how to design something like this so that our volumes and the ones we can attract don’t hurt.

Aida Sanchez, Euronews

And now entering the measures that the Commission has proposed, what will be the first measures that citizens will see? Because both the solidarity tax and the market revenue are technically a bit difficult to implement.

Kadri Simson

Well, in all 27 EU member states, citizens have already had the chance to see some of the results. Last week’s proposal aims at that market situation where there is a shortage of supply.

Aida Sanchez, Euronews

But the money the Commission expects to collect from these two taxes, when will they be available?

Kadri Simson

The maximum price for these electricity producers who produce electricity at significantly lower costs than, for example, gas-fired power plants. This money will be available to governments for the use and support of retail consumers and small businesses and will be available immediately.

Aida Sanchez, Euronews

And the solidarity contribution? When will we see it?

Kadri Simson

The solidarity contribution then goes to the revenue, the excess revenue that fossil fuel companies are earning this year. This means that it does not provide additional contributions before the end of the year.

Aida Sanchez, Euronews

The proposal also includes a mandatory 5% cut in electricity demand. How will the European Commission make sure Member States follow it?

Kadri Simson

This is a binding obligation and this means that Member States actually know what needs to be done. Well, the answer to the question and good contracts with large consumers are in place. It just means we need to use them more frequently.

Aida Sanchez, Euronews

Will we see a situation where citizens are also needed to reduce their demand? So citizens also have to actively save energy?

Kadri Simson

Well, families are protected customers. So even if we are facing a crisis and we don’t have enough supplies, families are protected. But saying this doesn’t mean that each of us has to do our best to save energy. This is a reasonable attitude. It helps us lower our bills. But right now, if millions of Europeans behave correctly and do not waste energy, it means that our industry does not have to face this situation that requires rationing.

Aida Sanchez, Euronews

Thank you very much Commissioner for being here. Thank you for your time.