European Commission set to unveil a broad energy package aimed at cutting electricity use and reshaping market profits
The European Commission is preparing a legislative package that would introduce several simultaneous steps aimed at lowering energy costs for households and businesses across EU member states. Officials briefed on the matter indicate a target of reducing average electricity consumption by about 10 percent, with a minimum reduction of 5 percent during peak usage periods. The plan is intended to cushion consumers from spikes in energy prices and to strengthen energy resilience across the bloc.
Alongside the efficiency push, the proposed measures include a mechanism to cap or limit revenues for electricity producers. The idea is to impose a ceiling on certain market revenues to prevent windfall gains when prices are driven higher by supply constraints. In practical terms, the proposal would modify the way electricity is priced and how much money producers can earn from each megawatt hour, with a view to keeping electricity bills more affordable for families and small businesses while maintaining supply reliability.
A third pillar of the package targets profits in the fossil fuel sector. Brussels plans a solidarity-type contribution on extraordinary profits earned by oil, gas, coal, and refining activities. The draft regulation circulating among officials describes a levy intended to extract part of the excess profits generated during periods of high energy prices, in a way that could support citizens and energy transition efforts. The objective is clear: channel additional revenue into measures that ease energy costs and support energy affordability for consumers and vulnerable households.
Preliminary documents circulating from Brussels refer to a rate of around one third for this solidarity contribution. Community officials emphasize that this tax would apply to profits realized during the current energy price surge and is designed to be transitional, aligning with broader climate and energy goals while shielding consumers from volatile prices.
The overarching aim of these proposed rules is to alleviate the pressure on energy prices that has risen in response to global shocks and geopolitical developments. While the invasion of Ukraine has amplified gas and electricity costs, the Commission intends these measures to provide a steadier, more predictable energy landscape for member states during the energy transition. The package would complement existing efforts to diversify energy supplies and accelerate the deployment of renewables and energy efficiency across the Union.
Officials plan to announce the package during a high-profile address by President Ursula von der Leyen in Strasbourg, delivering remarks that will frame the policy direction ahead of enhanced negotiations with member states and Parliament. The State of the Union update serves as a pivotal moment to gather political momentum and to outline the practical steps required to implement the new rules in time for the next heating season and beyond. Following the announcement, negotiators will enter a multiweek period of discussion and refinement as the text moves toward formal approval and legal adoption at the European level.
In parallel, member states are expected to explore a cap on prices for gas that is recognized as imported, even if the origin of the gas is uncertain. Discussions have underscored that any such cap needs to be carefully designed to avoid unintended consequences for suppliers like Algeria or Norway and to ensure it does not disrupt supply routes or energy security. The negotiations will focus on whether a cap can be calibrated to balance affordability with the need to maintain robust investment incentives in Europe’s energy infrastructure and regional markets.