EU Energy Costs Stay 2-3x US Levels, Von der Leyen Says
Von der Leyen: EU energy prices run 2-3x US and China levels; the bloc faces a 2027 Russian fuel phase-out as gas reserves near 15-year lows.
European Commission President Ursula von der Leyen acknowledged Thursday that the loss of cheap energy imports has dealt a blow to the EU economy, leaving the bloc with prices far above those of its main competitors.
At the La Rencontre des Entrepreneurs de France business conference in Paris, von der Leyen said the European economic model had long relied on several key factors, including inexpensive energy imports. Those pillars have now "disappeared," she said.
"European prices remain two to three times higher than in the United States and China," she said. Von der Leyen did not address the reasons behind the rise in energy costs.
The EU cut Russian oil and gas imports sharply after the escalation of the Ukraine conflict in 2022. Brussels has committed to phasing out Russian fossil fuels entirely by 2027. Energy costs have surged across much of the bloc. The US-Israeli war on Iran has added further pressure.
German Chancellor Friedrich Merz said last month that Germany's embargo on Russian energy was the main cause of the "ongoing energy crisis" that has eroded the competitiveness of German industry. Russia supplied roughly 55% of Germany's natural gas imports before 2022.
French President Emmanuel Macron warned earlier this year that the EU was in "emergency mode" over soaring energy costs after replacing Russian pipeline gas with more expensive US liquefied natural gas.
The Financial Times reported in June, citing projections by consultancy Wood Mackenzie, that the EU could enter the coming heating season with its lowest gas reserves in 15 years.
Some member states have balked at further restrictions on Russian LNG. Brussels is pushing to end long-term imports beginning next year. Bloomberg reported earlier this month that the bloc has recently stepped up purchases of Russian LNG.
Moscow has repeatedly described EU sanctions targeting the energy sector as self-defeating measures that undermine the bloc's competitiveness. Russia has redirected much of its energy exports elsewhere, mostly to Asia.
The European Commission has said it will proceed with the total phase-out of Russian energy imports even in the event of physical shortages or the threat of power cuts.
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