BRUSSELS, Oct 13, 2021 (BSS/AFP) - The EU on Wednesday will present a
"toolbox" of measures to mitigate an energy crunch that threatens to send
Europeans' power bills soaring.

   The European Commission has been under pressure to act on the looming
crisis, even though individual EU governments are more directly responsible
for their energy sources and taxation.

   Energy prices have taken off this year as economies bounce back from the
effects of the Covid pandemic.

   Wholesale natural gas prices, the leading indicator for overall consumer
and industrial energy prices, have more than tripled this year in Europe,
with storage tanks perilously low ahead of winter. Oil and coal prices have
also jumped.

   Some EU officials accuse Russia, source of most of the imported gas into
the bloc, of "blackmail" by limiting supplies to try to force Germany to
activate the newly completed Nord Stream 2 pipeline across the Baltic,
bypassing Ukraine.

   Outgoing German Chancellor Angela Merkel, however, has questioned that,
suggesting there had been insufficient long-term gas contracts from European
countries.

   The issue will headline an EU leaders' summit next week.

   But in a bid to first alleviate some of the pressure, Brussels is expected
on Wednesday to urge member states to temporarily cut national taxes that
heavily inflate the cost of energy to consumers and businesses.

   The EU's commissioner for industry, Thierry Breton, said in a French radio
interview on Monday that "all (EU) countries will... benefit from this
situation because there are a lot of taxes on energy".

   Brussels could also approve a provisional reduction in value-added tax and
back initiatives such as "energy cheques" for the poorest households. A
proposal for a US-style strategic gas reserve might also be raised.

   It was less certain whether it would take up a suggestion from France --
which gets most of its power from nuclear stations -- to sever a price link
between gas and electricity, or another from Spain for the EU to make joint
gas purchases.

   - 'Shorter showers' -

   A focus on lightening taxes could, EU officials hope, divert public
attention from the EU's emissions trading system (ETS), a market mechanism in
buying and selling carbon credits that some have blamed for the price hikes.

   The commission vice president in charge of the EU's green transition,
Frans Timmermans, has said that only around 20 percent of energy costs felt
by consumers come from the ETS.

   Timmermans and commission President Ursula von der Leyen stress that the
ETS is crucial for Europe to meet its target of becoming carbon neutral by
2050. They stress that renewable energy sources are cheaper than fossil
fuels.

   The EU executive is also wary of anything that could breach the bloc's
single market rules. Germany and the Netherlands argue against "extreme
measures" being taken.

   Analysts at the Bruegel think tank said that, for the short-term energy
problem, the EU cannot do much to boost supply.

   "The only thing Europe can quickly do to prevent a potentially difficult
winter is to actively promote energy conservation in both the residential and
industrial sectors," said Bruegel senior fellows Simone Tagliapietra and
Georg Zachmann in a post on the institution's site.

   For households, that would include "switching off lights, closing
curtains, and taking shorter hot showers" while manufacturers could pare back
production or consider temporary closures, they said.