Demand reduction “has an impact on industry, it has an impact on business, and in a difficult situation, it could be the way to do that. But it does not … solve the long-term,” Polish Secretary of State for Energy Wojciech Wrochna told reporters.
High prices “will regulate demand by itself,” Swedish Energy Minister Ebba Busch told reporters.
Fossil fuel subsidies
Such was the opposition to demand reduction measures on Thursday, Jørgensen — who was at the summit warning of a “difficult” winter of soaring fuel prices ahead — gave up even proposing it, focusing instead on subsidies. He reluctantly accepted that such subsidies could include fossil fuels as well as clean alternatives, but urged that they be “targeted and temporary.”
Since the war started, governments have paid €18 billion for tax relief on fossil fuel products, including a controversial move by Rome earlier this month to reduce the impact of gas prices on electricity costs.
European Commission President Ursula von der Leyen warned national leaders against this tendency, urging them at a summit this month to keep policies temporary and targeted to avoid inadvertently increasing fossil fuel demand and distorting the EU single market, according to two EU diplomats familiar with her comments.
That remains a point of contention among EU leaders, with some, including Greece, calling for greater fiscal space to increase energy subsidies while others warn of the dangers of subsidizing fossil fuels.