BRUSSELS, Oct 21 (Reuters) –
Hungarian Prime Minister Viktor Orban on Thursday dismissed European Union plans to tackle climate change as a “utopian fantasy”, and suggested green measures were pushing up energy costs in Europe.
“Raising the prices, having a new regulation, rocketing the prices to the sky, destroying the middle class,” Orban said, referring to proposed EU climate measures, on his arrival to a summit of EU leaders.
“Common sense on one side and fantasy on the other one. And utopian fantasy kills us – that’s the problem with energy prices as well.”
Analysts and the European Commission have said the main driver of high electricity costs in Europe has been soaring gas prices, while the EU carbon market has contributed up to a fifth of the power price rise. Brussels has proposed a package of new climate policies, which EU countries will need to negotiate and approve before they take effect.
EU leaders on Thursday will debate their response to soaring energy prices, which have exposed familiar rifts over the bloc’s climate change goals and divided countries on whether the price crunch warrants an overhaul of EU energy market rules.
EU country leaders will discuss a “toolbox” the EU Commission published last week, which outlined the national measures governments can take and said Brussels would look into longer-term options to address price shocks.
Most EU countries have already drawn up emergency action plans to shield consumers from the price spike, including energy tax cuts and subsidies for poorer households, and on Thursday leaders will encourage others to follow suit.
A draft of their summit conclusions, seen by Reuters, invites countries to urgently use the toolbox “to provide short-term relief to the most vulnerable consumers and to support European companies”.
Longer-term measures, however, are more contentious.
“Member states are very split,” one EU diplomat said. “There is no common vision on what to do except follow the toolbox and use national measures to address vulnerable consumers – but beyond that, there is absolutely no agreement.”
European gas prices have hit record highs as tight supply has collided with economies emerging from the COVID-19 pandemic, pushing up consumers’ electricity bills amid record-high CO2 prices and lower-than-expected gas deliveries from Russia.
Countries including Spain, Italy and Greece want the EU to respond with regulatory changes. They propose joint gas buying among EU countries to form strategic reserves, and decoupling European electricity prices from the cost of gas-fuelled generation.
Others, including Germany and Belgium, are wary of overhauling regulations in response to a short-term crisis. The Commission said gas prices were expected to stabilise at a lower level by April.
The draft conclusions for the summit did not endorse any specific actions, and Thursday’s talks will likely pass the issue on to EU energy ministers to wrangle over at an emergency meeting on Oct. 26.
A preparatory note ahead of that meeting, seen by Reuters, said ministers would debate “what further measures at EU and Member State level, including the use of EU financial tools, could be envisaged”.
The price spike has also stoked familiar tensions between EU countries over the bloc’s policies to fight climate change, with Poland this week calling for Brussels to change or delay some planned green measures.
Two EU diplomats sad Poland was isolated in that view, which is at odds with other countries that say high gas prices should speed up Europe’s shift to renewable energy to reduce countries’ exposure to volatile fossil fuel prices.
Photo – EPA-EFE/KIM LUDBROOK