50 Cyprus Energy Regulatory Authority EUROPEAN COMMISSION: Tackling rising energy prices: A toolbox for action and support The European Union, like many other regions in the world, is currently facing a sharp spike in energy prices in 2021. This spike is principally driven by increased global demand for energy at large and gas in particular, which is directly linked to the recovery of the financial crisis and the spread of the COVID-19 virus. The EU's policy framework already allows Member States to immediately take a series of targeted measures to protect vulnerable consumers and mitigate the impacts on industry. In this context, the European Commission published a "toolbox" (COM(2021) 660) on 13 October 2021 which allows a co-ordinated approach to protect those most at risk. In addition to immediate measures, this Communication provides an outlook onto coordinated measures the Commission considers to take over the medium-term to ensure a better preparedness to gas price fluctuations while reducing the EU's dependence on fossil fuels. The immediate measures that were proposed focus on protecting consumers and businesses. Twenty Member States have taken or are envisaging taking measures, often with a focus on mitigating the impact on the most vulnerable, the smaller businesses and energy intensive industries. This includes price caps and temporary tax breaks for vulnerable energy consumers, or vouchers and subsidies for consumers and businesses. Such immediate measures could be partly financed from the revenue generated from the auctions of the EU ETS allowances, levies and taxes on energy prices, as well as through environmental taxes. • Emergency income support and avoiding disconnections from the grid: › Provide time limited compensation measures and direct support to energy-poor end-users including groups at risk, e.g. through vouchers or by covering parts of the energy bill, financed inter alia from the ETS revenues. › Put in place and/or maintain safeguards to avoid disconnections from the energy grid or defer payments temporarily. › Exchange best practices and coordinate measures through the Commission Energy poverty and vulnerable consumers coordination group. • Taxation: › Reduce taxation rates for vulnerable populations, in a time limited and targeted way. › Consider shifting the financing of renewable support schemes away from levies to sources outside the electricity bill. • State Aid: › Take measures reducing energy costs for all energy end-users. For example, aid in the form of reductions in harmonised environmental taxes up to the minima set in the Energy Taxation Directive can be implemented by Member States without prior notification to the Commission. › Provide aid to companies or industries to weather the crisis, in full compliance with the state aid framework, while using, as appropriate, the scope for flexibility provided for in the framework and encouraging transition away from fossil fuels. › Facilitate a wider access to RES power purchase agreements (PPAs) beyond large business, including SMEs. For instance, by aggregating end-user demand in compliance with competition rules. › Support of PPAs through flanking measures such as match-making, standard contracts and de-risking through InvestEU financial products. With respect to medium-term measures, drawing on lessons learned from the crisis, the European Commission proposes measures that do not have an immediate impact on the current situation, but will strengthen preparedness for possible future price shocks, increase market integration and
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