EU energy ministers convened an extraordinary council to finalize a three-pillar emergency plan aimed at urgently intervening in Europe’s electricity market and lowering power bills. The proposed package includes measures to reduce consumption, maintain an upper limit on extraordinary profits, and implement a solidarity contribution. According to diplomatic sources, energy companies would be subject to a tax scheme designed not by a single government, but as a coordinated approach across member states. Spain’s Prime Minister has advocated a tax on the “falling profits” of large energy firms as part of this broader effort.
“The objective is to preserve the integrity of our model,” a spokesperson noted. “Friday presents a real test.” The European Commission had already signaled that national measures in place could be kept or enhanced, and that member states could reinforce these commitments as the text is discussed on Friday. Other diplomatic sources described the new version as strengthening guarantees that national laws already in force will be respected, ensuring governments can continue to act on energy income. One proposal under discussion is a solidarity contribution that would tax not only the profits sought by Brussels but also the broader income of all energy companies, including oil, refineries, and gas firms.
Iberian exception
Spain is pushing for the Iberian exception, which would temporarily decouple gas prices from electricity prices until a defined date, a mechanism that has previously provided relief. Like other EU members, Spain also questions the 180 euro per MWh cap proposed by Brussels for marginal electricity. Renewable and nuclear energies, which generate large incomes, would be expected to contribute their share back to the system. In addition to the tax on extraordinary profits and the cap on marginal energy charges, the agreement contemplates a voluntary energy-saving framework. Governments could apply the 10 percent consumption reduction with flexibility, determining peak periods when the mandatory 5 percent cut would apply.
Though the latest ambassadorial meeting did not yield a full agreement, and the Czech presidency has amended the proposal to accommodate diverse positions, sources in Brussels still view the text as broadly stable for Friday. The draft is said to reflect the concerns of most member states, although no final decision has been announced.
Gas price cap
The council is weighing a wholesale gas price cap, backed by 15 member states including Spain, Portugal, Greece, and France, within the broader aim of moderating high gas prices from outside the bloc. This proposal has divided opinions: some see it as a potential remedy, while others warn it could threaten Europe’s energy security or drive up overall consumption during a period when demand should be falling.
In parallel, pressure on the European Commission to consider a gas price cap has intensified. Brussels is weighing several options, including negotiating with reliable suppliers and forging a joint pact to lower prices in a reasonable timeframe. The Commission has framed the objective as ensuring lower prices for European consumers this winter and remains prepared to act if necessary to curb costs.
The Iberian exemption could be extended across Europe via a provisional framework to limit high gas prices’ impact on electricity prices. One option, informed by experiences in Spain, Portugal, and Greece, would cap gas prices in electricity generation to help reduce overall costs and dampen consumption. The financial gap between the cap and the market price would fall on the electricity system within member states. At the same time, the Commission continues to push for limiting gas imports from strategic sources and improving the energy wholesale market’s liquidity through a temporary aid framework anticipated to be available by mid-October. The overarching goal remains to stabilize prices while preserving supply and energy security across the Union. [Source attribution: European Commission briefings and member state discussions]