Europe has been facing rising energy prices for several months, but the supply uncertainty is now exacerbating the problem. In light of Russia's invasion of Ukraine, the European Commission has presented a plan to make Europe independent of Russian fossil fuels well before 2030, starting with gas. REPowerEU will seek to diversify gas supplies, accelerate the introduction of alternative fuels from renewable energy sources and replace gas in heat and power generation. This can reduce the EU's demand for Russian gas by two-thirds by the end of the year. The plan also includes measures to respond to rising energy prices in Europe and replenish gas stocks for next winter.
The Commission provides additional guidance to the Member States confirming the possibility of price regulation in exceptional circumstances and setting out how the Member States can redistribute revenues from high profits in the energy sector and from emissions trading to consumers. The Commission's 'Energy Prices Toolbox' of October last year has helped the Member States mitigate the impact of high prices on vulnerable consumers and remains an essential framework for national action. EU state aid rules also offer the Member States the possibility to support companies affected by high energy prices in the short term and help them reduce their vulnerability to energy price volatility in the medium to long term. Following consultation on targeted changes to the ETS State Aid Guidelines, the Commission will also consult the Member States on the need for and scope of a new Temporary State Aid Framework to support companies affected by the crisis, particularly those facing high energy costs.
The Commission is continuing its investigation into the gas market to address concerns about possible distortions of competition by operators, especially Gazprom. The Commission intends to present a legislative proposal by April requiring underground gas storage facilities across the EU to be at least 90% full by 1 October each year. The proposal would include monitoring and enforcement of the filling levels and solidarity arrangements between the Member States.
The Commission will explore all possible options for emergency measures to limit the effect of gas prices on electricity prices, such as temporary price caps, to tackle skyrocketing energy prices. It will also assess options to optimize electricity market design, taking into account the final report of the EU Agency for the Cooperation of Energy Regulators (ACER) and other contributions on the advantages and disadvantages of alternative pricing mechanisms to keep electricity affordable without disrupting supply and further investment in the green transition.
Phasing out our dependence on fossil fuels from Russia can be achieved well before 2030. To achieve this, the Commission proposes to develop a REPowerEU plan that will increase the resilience of the EU-wide energy system based on two pillars: Diversifying gas supply through increased imports of liquefied natural gas (LNG) and pipelines from non-Russian suppliers, as well as greater volumes of biomethane and renewable hydrogen produced and imported; and accelerating the reduction of fossil fuel use in our homes, buildings, industry, and electricity grid by increasing energy efficiency, expanding renewables and electrification, and addressing infrastructure bottlenecks.
Full implementation of the Commission's Fit for 55 proposals would already reduce our annual fossil gas consumption by 30%, or 100 billion cubic meters (bcm), by 2030. With the measures of the REPowerEU plan, we could gradually save at least 155 bcm of fossil gas, which is the amount imported from Russia in 2021. Almost two-thirds of this reduction can be achieved within one year, ending the EU's overdependence on a single supplier. The Commission proposes to work with the Member States to identify the most appropriate projects to achieve these targets, building on the substantial work already done.
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