– We live in exceptional times and we are working in an exceptionally fast, coordinated and solidary manner to create a united front against Russia’s continued use of energy supplies as a weapon. Today’s agreement will bring relief to European citizens and businesses. Member States will flatten the electricity demand curve during peak hours, which will have a direct positive effect on prices. Member States will redistribute excess profits from the energy sector to those who have difficulty paying their bills, said Jozef Sikela, Czech Minister of Industry and Trade, whose country currently holds the six-month presidency of the EU Council.
The Council of the EU agreed voluntary overall 10% reduction target for gross electricity consumption and a mandatory 5% reduction target. electricity consumption during peak hours. Member States will define 10% consumption during peak hours between December 1, 2022 and March 31, 2023, during which they will reduce demand. During this period, Member States will be free to choose the appropriate measures to reduce consumption for both purposes.
The Council also agreed to limit market revenues to EUR 180 per MWh for electricity producers, including intermediaries who use the so-called inframarginal technologies such as renewable energy sources, nuclear energy and lignite. Such operators have achieved unexpectedly large financial gains in recent months, without increasing operating costs – we read in a statement published on the website of the EU Council.
The cap level aims to preserve the profitability of operators and to avoid hampering investments in renewable energy.
Tax on profits
Member States agreed to introducing a mandatory temporary solidarity levy on the profits of companies operating in the oil, gas, coal and refineries sectors. The solidarity contribution would be calculated on the basis of the income subject to taxation, determined in accordance with national tax laws in a tax year beginning in 2022 or 2023, which exceed 20%. increase in average annual taxable income from 2018. The solidarity contribution will apply in addition to the usual taxes and levies in force in the Member States.
Member States will take advantage of revenues from the solidarity levy for financial support for households and enterprises and to mitigate the effects of high retail electricity prices.
The Council agreed that the member states can temporarily set a price for the supply of electricity to small and medium-sized enterprisesto further support these actors at a time when they are struggling with high energy prices. Member States have also agreed that they can exceptionally and temporarily set the price for the supply of electricity below cost.
The measures are temporary and extraordinary. They will be valid from December 1, 2022 to December 31, 2023. The energy consumption reduction targets will apply until March 31, 2023. The mandatory market revenue limit will apply until June 30, 2023.
Member States have introduced special exemptions for Cyprus and Malta.
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