European Union Approves Energy Windfall Levies

In a meeting between the ministers of 27 member countries of the European Union, they approved levies on the windfall profits of the energy companies to stop the increase in energy prices caused by the Russian and Ukraine war.

The agreement covers a levy on profits made by fossil fuel companies in 2022 and in future, with another levy on the excess revenues made by low-cost producers from increasing electricity costs, and a compulsory 5 percent cut in electricity usage during the peak price periods.

According to the Czech Republic, that was not enough and many European Union countries expected a proposal from the European Commission on capping gas prices.

During the meeting, Kadri Simson, energy commissioner of the European Union, said that there was no agreement on what such a cap would look like, and they will try to negotiate a price corridor that will allow them to bring down costs for their consumers.

Kadri Simson said that a wholesale gas price has been a legitimate option, but it still requires radical intervention in the market, and many non-negotiable conditions will need to be put in place along with such a cap for the strategy to work.