Speech by President von der Leyen at the European Parliament Plenary on the preparation of the European Council meeting of 20-21 October 2022

Dear President Metsola, dear Roberta,

Dear Minister Bek,

Honourable Members,

Russia's targeted attacks against civilian infrastructure, especially electrical grids, are marking a new chapter in an already cruel war. The international order is clear. These are war crimes. Targeted attacks on civilian infrastructure with the clear aim to cut off men, women, children of water, electricity and heating with winter coming – these are acts of pure terror. And we have to call it as such.

This is the moment to stay the course. We will back Ukraine for as long as it takes. And we will protect Europeans from the other war that Putin is waging – his war on our energy. I know that Europeans are concerned; concerned about inflation, about their energy bills, about the winter. The best response to Putin's gas blackmail is European unity and solidarity.

In this spirit, the Commission agreed yesterday on a strong legislative framework to address the energy crisis. Let me outline the main points to you.

The first one is as logical as important: Instead of outbidding each other, Europeans should buy gas together. For this, we will purchase together gas at EU level. Aggregation of demand will be mandatory for at least 15% of the volumes needed to fill gas storages. And the companies involved may form a ‘gas purchasing consortium'. We do this because we have learnt the lesson. We literally saw in August, at the height of the filling season, how Member States were outbidding each other and prices were spiking. We definitely can be smarter than this. So pooling our demand is a must.

My next point is about sharing gas in Europe. We know that some Member States are more directly exposed than others to Russian gas. The situation is especially challenging for landlocked countries in Central Europe. But in the end, in our Single Market with highly integrated supply chains, a disruption in one Member State has a massive impact on all Member States. So, sharing gas in a crisis is critical. Member States have already since five years an obligation under EU law to conclude solidarity agreements. However, until today, only 6 out of 40 possible agreements have been agreed. This is simply not enough. This is why we will put in place default rules for Member States. This will be binding, as long as they do not conclude individual solidarity agreements. Energy solidarity is a fundamental principle in our Treaties, so let us bring that to life.

Honourable Members,

These crucial measures – pooling and sharing – and of course saving, will have a positive impact on gas prices. But more needs to be done to address the price spikes and Russian market manipulation. Compared to last September 2021, Russia has cut this September 80% of its pipeline gas supply to us. And Europe has been able to compensate. Trusted partners like the US and Norway have stepped up their deliveries. We increased savings and filled our storages. We can all be proud of this. But resisting the Russian energy coercion comes at a price. European families have seen their gas bills skyrocketing. And our companies are struggling to keep up competitiveness.

In March, we proposed to the Council the option to cap gas prices. Today, we are coming back to this. The current benchmark determining gas prices is TTF. TTF is focused on pipeline gas, whereas LNG has become more and more important in Europe. We need a new, specific price benchmark for LNG. The Commission will now develop this complementary benchmark together with the European regulator. But this will take some time. So as a stop-gap measure, we limit prices via TTF. We call this the market correction mechanism. Yesterday, we proposed guiding principles as a first step. On this basis, we will prepare the operational mechanism in a second step. This is gas at the wholesale level.

But gas also drives up the electricity prices. And here, the Iberian model comes into play. It merits to be considered at EU level. There are still questions to be answered, but I want to leave no stone unturned.

Honourable Members,

We live in times of high economic uncertainty. And I am concerned about the competitiveness of our economy. All our actions have to take this into account – including standard competitiveness-checks in our regulation. In addition, we have to speed up investments all over Europe. This brings me to REPowerEU. When we proposed REPowerEU in March, the situation was as such: There was a huge dependency of Russian gas. At that time, we anticipated that it would take several years to replace the Russian gas.

Fact is today, it took us eight months to replace two-thirds. In other words: we see a massive acceleration of diversification to other suppliers of gas abroad. This comes at a high price. But the actual solution to maintain our competitiveness is to invest into home-grown sources of energy, especially renewables. In all of Europe. However, only Member States with sufficient fiscal space can undertake these critical investments. This will inevitably unlevel the playing field of our Single Market.

Therefore, we not only need REPowerEU now, accelerate it but we have to boost – to give every Member State the same opportunity to prepare for the future. This is not only about energy, this is about our global competitiveness and our sovereignty.

Long live Europe.