Commission targets electricity taxes and gas storage amid energy pressure

The European Commission on 22 April presented a set of measures to contain the energy impact of the Iran war, while avoiding for now more structural interventions such as gas price caps or windfall profit taxes used during the 2022 crisis.

At the centre of the package is energy taxation. Brussels plans to revise EU rules so that electricity is taxed less than gas, making it easier for governments to cut electricity levies, potentially to zero, for industry and vulnerable households. Formal proposals are expected in May, but any changes will require unanimity among member states, which could complicate approval.

Energy Commissioner Dan Jørgensen warned that damage to Middle Eastern energy infrastructure is likely to keep prices elevated for years. Even in a scenario where the conflict ends quickly, market conditions are expected to remain tight. The strategic priority, he said, is to reduce dependence on gas by accelerating the transition to clean energy.

Gas markets stable but under pressure

European gas prices have increased by around one third since the start of the conflict, following the effective closure of the Strait of Hormuz. However, they remain well below 2022 levels, and no supply shortages have emerged so far, with the United States and Norway continuing to act as key suppliers.

On storage, the Commission plans to coordinate member states in refilling gas reserves in the coming months, with the aim of avoiding price spikes caused by uncoordinated purchases. Additional options under discussion include maximising refinery output and introducing aviation fuel storage requirements to prevent disruptions.

Cautious approach leaves room for stronger measures

More forceful interventions remain on the table, including a possible EU-wide windfall tax on energy companies, but these are not considered necessary at this stage. The Commission’s cautious approach reflects the fact that many crisis tools, such as subsidies and tax cuts, are still controlled at national level, where governments have already committed significant resources to shield consumers.

In the medium term, the EU is looking to accelerate the shift away from fossil fuels toward domestically produced renewable and nuclear energy.

The current crisis has had a more limited impact on electricity prices than in 2022, partly due to the expansion of renewables. In 2025, 71 per cent of European electricity came from renewable and nuclear sources, up from around 60 per cent in 2022.