Von der Leyen rejects blanket subsidies as EU fossil import bill rises €100B

Surge in energy costs

European Commission President Ursula von der Leyen presented the European Union strategy on energy prices to the European Parliament plenary on Tuesday ahead of the European Council summit on 15-16 October. Fossil fuel import costs across the bloc have risen by more than €100 billion since the outbreak of the war involving Iran, without yielding any additional volume of energy. Natural gas prices have jumped 140% since late February, while diesel prices have doubled during the same interval. These figures align with earlier warnings delivered in Dublin by Energy Commissioner Dan Jørgensen regarding mounting pressure on European industry and households. The Commission cautioned that mounting utility bills and operating expenses could worsen significantly as the winter season nears.

All of us are feeling these higher energy costs. Businesses are under severe pressure, people are struggling to pay their bills, and this situation could worsen as we head into winter. Therefore, we must act now.

Rejection of blanket subsidies

Addressing demands from member states including Greece and Italy for budgetary leeway, the Commission president warned against general relief measures. Universal subsidies increase overall energy consumption, direct public funds disproportionately to high-income earners, and create substantial fiscal burdens for national treasuries. Brussels rejected calls for broad horizontal handouts, pointing instead to targeted temporary support mechanisms designed for low-income households and heavily exposed manufacturing sectors. Von der Leyen cited ongoing energy voucher initiatives in France and Romania as practical examples of calibrated assistance. While Athens and Rome sought exemptions for energy spending under fiscal rules, the Commission maintained that existing structural tools provide sufficient flexibility.

Support must be targeted, and we cannot distribute aid indiscriminately.

Supply initiatives and joint procurement

To stabilize volatile international fuel markets, the European Commission is implementing several supply-side interventions alongside global partners. The European Union will coordinate with an agreement reached by the G7 nations, under the presidency of France, to release 100 million barrels of crude oil and diesel from strategic petroleum reserves. Brussels is establishing a dedicated task force to pool energy demand from member states, aiming to leverage the collective purchasing power of the bloc during future negotiations with suppliers. The Commission will also launch a strategic dialogue with European oil refineries to reduce operational costs and guarantee domestic fuel supplies. Furthermore, international methane exporters will receive a one-year regulatory grace period to comply with the European Union methane regulation.

Energy mix divergence and long-term reform

Wide variations in national power generation profiles mean that a single energy policy cannot fit every member state. Wholesale electricity costs reach €145 per megawatt-hour in countries heavily reliant on natural gas, compared to €70 per megawatt-hour in countries with grids dominated by nuclear power and renewable energy sources. The Commission plans to table legislative proposals in the coming months to expand cross-border power grids and increase the share of electricity in overall energy demand. European officials stated that the permanent solution to market volatility lies in ending dependence on imported fossil fuels through expanded domestic clean power generation.

Tackling high energy costs is our priority. To protect those most in need. To address structural problems. And to ensure that we emerge from this crisis stronger than we entered it.