EU crisis as fuel price rises could torpedo Ursula von der Leyen’s ‘Green Deal’
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Brussels has committed a third of its €1.8 trillion (£1.54 trillion) coronavirus recovery package to the deal, which it hopes will fight climate change and boost economic growth. However, there are concerns within the bloc over whether Ursula von der Leyen’s ‘Green Deal’ can be “sold politically” if fuel prices continue to surge.
The Commission President is determined to make the EU carbon neutral by 2050.
European gas prices have surged 250 percent since January, with the UK particularly badly hit.
Russia has been accused of restricting gas supplies to Europe, in a bid to win political concessions.
Writing for Wirtschafts Woche, German journalist Silke Wettach warned gas price rises are making it “even more difficult to reach an agreement among the EU member states, on environmental policy.
One diplomat said: “It will be like budget negotiations, only much worse because everyone has to pay.”
Some 50 million households across the EU are already living in fuel poverty according to European Commission figures.
There are fears any move to make gas more expensive on environmental grounds could trigger a sharp political backlash.
Last year Eurelectric, the European association of electricity suppliers, warned climate policies which make fossil fuels more expensive will disproportionately hit the poor.
A report from the association warned: “There could be more yellow vests in the future.”
This is a reference to the French gilets jaunes, or yellow vest, movement which erupted in 2018 to protest an eco-tax making petrol and diesel more expensive.
The yellow vests snowballed into a wider anti-establishment force holding large, and sometimes violent, rallies across France.
Ms Wettach questioned whether the EU’s Green Deal can be “sold politically if prices continue to rise”.
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In July the EU committed to cut its carbon emissions by at least 55 percent by 2030, compared to 1990 levels.
Britain has been especially badly hit by gas price increases, with several energy firms collapsing over the past week.
Business Secretary Kwasi Kwarteng has been having daily talks with Ofgem, the industry regulator, according to the BBC.
Price comparison site Uswitch warned consumers will face price rises.
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They said: “Rising wholesale costs are putting a big strain on suppliers, which has had a knock-on effect on the value of the deals available in the market.
“What we’re able to offer is constantly changing and will vary by customer.
“If you are coming to the end of your fixed deal, our advice is to hold tight, stay put and be rolled over on to your supplier’s standard variable rate. Your supplier may try to offer you a new fixed deal, but this is unlikely to be the best option right now.
“However, people can leave their contact details so we could contact them once the situation improves.”
A number of petrol stations in the UK have run dry, due to a shortage of tanker drivers.
The Government is urging the public not to panic buy.
Additional reporting by Monika Pallenberg.
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