The European Commission has announced that the EU will cut electricity taxes and provide consumers with fresh incentives to ditch fuel-burning cars and boilers, as the energy crisis from the Iran war speeds a shift to a clean economy.
The plan, which foresees tweaking rules so that electricity is taxed less than oil and gas, aims to bring down bills while encouraging the move away from polluting devices that prolong reliance on foreign fuels. The commission said that it would adopt temporary state aid rules to allow member countries to directly shield consumers and businesses from high energy prices, but it warned that any support must be “targeted, timely and temporary.”
The commission also ruled also ruled out a cap on gas prices, which energy experts had warned would be counterproductive. Dan Jørgensen, the Energy and Housing Commissioner said, “By investing in clean energy and electrification, we unlock more money for our economy.” “In the future, instead of buying something and burning it to get energy and buying it again, we need to produce our own homegrown clean energy,” he added.
The EU’s Energy Commissioner also warned that the oil price crisis could last months or years even if there is peace. He confirmed that the aviation sector could face the prospect of a shortage in jet fuel in the next five or six weeks.
Jørgensen disclosed at a briefing unveiling emergency measures to deal with the crisis caused by the Iran war, “Jet fuel: this is the area now that is under most pressure and the IEA [International energy agency] has estimated that within five or six weeks we can have a real security of supply issue.” The EU imports 30% to 40% of its jet fuel needs, with about half coming from the Middle East.
Jørgensen said that they had developed new tools in Brussels to ensure an “overview of refining capacity and stock in our different member states.” However, he added, “But obviously we have to be quite honest and say that whether or not we will be a security-of-supply crisis is primarily a result of what goes on in the Middle East.”
He warned that even if a peace deal is struck in the next few weeks between Iran and the US, the crisis will last months and perhaps years. “We are looking into some very difficult months, or maybe even years depending on the development in the Middle East,” he said.
“Take Qatar. It may take two years to rebuild its gas and transportation structure. It means that the world market for LNG prices will not stabilise of even fall as was expected in the next couple of years. Even a best case scenario is a pretty bad scenario for the months to come.”
Dan Jørgensen
EU To Waive State Aid Rules
The EU is to waive its state aid rules to allow member states to step in and help consumers weather the current cost of living crisis caused by the Iran war.
It will allow governments to issue energy vouchers, temporarily allow the reduction of excise duties for vulnerable households. It will also allow emergency measures at state level to help industries facing existential threats because of the huge spike in the price of oil.
Jørgensen asserted that this must be a “wake up call and a turning point.” He cited initiatives in Austria where the government is supporting the removal of gas boilers and while Belgium and Germany are offering reduced VAT and low electricity prices respectively, to boost the installation of heat pumps. France, which has seen a 50% increase in the sale of electric cars will relaunch its social leasing program for EVs.
Other measures are aimed at accelerating green infrastructure for both consumers and industry. They include enhancement of the bloc- wide grid with a legislative proposal on charges and taxes that are favourable to wind farms and renewable plants including hydropower. It will also facilitate collaboration between the private and public sector at a clean energy investment summit to speed up renewable energy production.
“When Europe steps away from fossil fuel dependence and steps toward clean energy autonomy. Because now it is more obvious than ever. Clean energy means security. It means affordability. It means independence.”
Dan Jørgensen
Environment Commissioner Teresa Ribera also announced that green energy production has reached record levels. “Renewable energy generation in Europe reached a new record high in the first quarter of this year, 15% higher than in the first quarter of 2025,” she said.
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