EU weighs new energy taxes as Germany calls for ‘drastic’ steps

Greenpeace activists at the International Auto Show in Frankfurt — under the Finnish presidency the EU has drawn up a range of possible measures. (AFP)
Updated 13 September 2019

EU weighs new energy taxes as Germany calls for ‘drastic’ steps

  • The bloc’s finance ministers are meeting to discuss how to meet climate targets

HELSINKI: The EU is considering new energy taxes to meet its climate targets, top officials said on Friday, with Germany calling for “drastic steps” to reduce carbon emissions.

In the last decade, EU countries have led the global shift towards renewable energy and set up the world’s largest emissions trading system to price carbon and reduce reliance on more polluting fuels.

However, the bloc’s rules on energy taxation have not changed for more than 15 years.

They are “outdated and poorly adapted to climate change challenges and developments in energy policy at EU level,” according to a document which EU finance ministers will discuss at meetings in Helsinki on Friday and Saturday.

Arriving at the meeting, German finance minister Olaf Scholz said “drastic steps” were needed to counter climate change and urged an international approach on the matter.

“We are in the process of finding out how we can limit CO2 consumption in agriculture, small businesses or transport,” Scholz said.

FASTFACT

NASA estimates the average global temperature has risen by about 0.8 degrees Celsius since 1880.

The bloc’s top economic commissioner, Valdis Dombrovskis, told reporters that options included a carbon tax and an overhaul of energy taxation.

Possible measures in a document prepared by the Finnish presidency of the EU included higher minimum tax rates on energy, fossil fuel levies and the end of waivers for the air and sea transport sectors.

Ambitious targets for reducing carbon emissions by at least 50 percent by 2030 are part of the agenda of the new European Commission which will take office in November.

A confidential work programme prepared in July by Commission officials before the appointment of the commission’s president-designate Ursula von der Leyen envisages legislative proposals to end tax exemptions for air and sea transport by early 2020 and a review of minimum tax rates on energy products by the end of next year. 


Russia vows cooperation with OPEC to keep oil market balanced

Updated 21 November 2019

Russia vows cooperation with OPEC to keep oil market balanced

  • Moscow not aiming to be world’s No.1 crude producer, Putin tells annual investment forum

MOSCOW: President Vladimir Putin said on Wednesday that Russia and the Organization of the Petroleum Exporting Countries (OPEC) have “a common goal” of keeping the oil market balanced and predictable, and Moscow will continue cooperation under the global supply curbs deal.

OPEC meets on Dec. 5 in Vienna, followed by talks with a group of other exporters, including Russia, known as OPEC+.

“Our (common with OPEC) goal is for the market to be balanced, acceptable for producers and consumers and the most important — and I want to underline this — predictable,” Putin told a forum on Wednesday.

In October, Russia cut its oil output to 11.23 million barrels per day (bpd) from 11.25 million bpd in September but it was still higher than a 11.17-11.18 million bpd cap set for Moscow under the existing global deal. Putin told the forum that Russia’s oil production was growing slightly despite the supply curbs deal but Moscow was not aiming to be the world’s No. 1 crude producer. Currently, the US is the world’s top oil producer.

“Russia has a serious impact on the global energy market but the most impact we achieve (is) when working along with other key producers,” he said. “There was a moment not that long ago when Russia was the world’s top oil producer — this is not our goal.”

Russia plans to produce between 556 million and 560 million tons of oil this year (11.17-11.25 million bpd), Energy Minister Alexander Novak said separately on Wednesday, depending on the volume of gas condensate produced during cold months.

Russia will aim to stick to its commitments under the deal in November, Novak told reporters.

Russia includes gas condensate — a side product also known as a “light oil” produced when companies extract natural gas — into its overall oil production statistics, which some other oil producing countries do not do.

As Russia is gradually increasing liquefied natural gas production (LNG), the share of gas condensate it is producing is also growing. Gas condensate now accounts for around 6 percent of Russian oil production.

Novak told reporters that in winter, Russia traditionally produces more gas condensate as it is launching new gas fields in the freezing temperatures.

“We believe that gas condensate should not be taken into account (of overall oil production statistics), as this is an absolutely different area related to gas production and gas supplies,” he said.

Three sources told Reuters on Tuesday that Russia is unlikely to agree to deepen cuts in oil output at a meeting with fellow exporters next month, but could commit to extend existing curbs to support Saudi Arabia.

On Wednesday, Novak declined to say that Russia’s position would be at upcoming OPEC+ meeting. Reuters uses a conversion rate of 7.33 barrels per ton of oil.