EU to Unveil Energy Strategy Amid Rising Costs from Iran Conflict

Kathmandu. Brussels is set to present a plan next week to address the high energy costs resulting from the Iran conflict. EU Chief Ursula von der Leyen stated on Monday that a comprehensive package will be unveiled before the summer to boost Europe's electrification.

The energy crisis has forced the 27-nation bloc to face costs exceeding 22 billion euros ($26 billion) for fossil fuels, von der Leyen said following a meeting of the EU's top executive body focused on the issue.

“This cost makes it clear that we are paying a very high price for our over-reliance on fossil fuels,” the European Commission chief said at a press conference in Brussels, emphasizing the need for a faster transition to renewable and nuclear energy.

“We need to scale up indigenous, cheaper, and reliable energy,” she said. The Commission hopes to introduce new rules aimed at accelerating electrical grid connections among member states and present an 'electrification strategy' before the summer.

Oil and gas prices have surged since the US-Israel attack on Iran began on February 28, with Tehran effectively blocking the strategically important 'Strait of Hormuz' and retaliating by attacking Gulf energy infrastructure.

“To address the lack of affordability, the Commission is considering relaxing EU state aid rules to give member states more room to support the 'most affected sectors',” von der Leyen said.

She noted that details will be released as part of a package to be presented next week ahead of an informal meeting of European Union leaders in Cyprus.

The Commission is seeking to coordinate the release of oil reserves to the market and the filling of gas storage across the bloc so that member states do not compete against each other in the market, as such competition has driven up price increases.

“Steps to support energy efficiency without further expansion of equipment for building construction and industrial operations are also being considered,” the Commission President added.

“The least expensive energy is the energy that is not used,” she said. Von der Leyen stated that proposals to reform electricity taxes and grid fees will arrive in May.