With a smaller proportion of oil and gas supplies likely to be compliant, less availability means there’s a real risk this looming crisis will affect energy affordability for households and businesses alike.
Remember, these rules have nothing to do with lowering levels of methane, which the legislation does not demand until 2030, but are about adhering to measurement, reporting, certification and verification standards for which neither the European Commission nor member states have done the work to establish in time for implementation.
With a smaller proportion of oil and gas supplies likely to be compliant, less availability means there’s a real risk this looming crisis will affect energy affordability for households and businesses alike.
Consumers will ultimately bear the burden through anticipated higher gas and/or fuel prices; Wood Mackenzie say gasoline and diesel prices could increase by 24 percent and 16 percent respectively. The Commission knows this but appears unwilling to make the necessary changes to reduce the cost burden on its citizens.
High energy costs would further damage the competitiveness of Europe’s energy intensive industries like steel, chemicals and manufacturing — leading the bloc further down the path of additional self-inflicted deindustrialization. Make no mistake — the risk is that factories close, jobs will be lost and household costs continue to rise.
The pinch point is imminent, as many energy importers are deciding now what orders to place for 2027. The refining sector, already battling to stay competitive, is faced with the uncertainty of not just where to source from, but also the prospect of severe penalties for non-compliance; up to 20 percent of annual turnover.
The Commission’s proposition that this will all be fixed by “guidance”, including relaxing penalties, is misguided. Leaving individual member states to decide whether and how to reduce fines for importers compounds the complexity and removes none of the risk. Penalty or not, no company wants to position itself as legally non-compliant.
