(AI generated translation)
The European Commission has urged countries to allocate more public funds to help businesses cover the costs of fuel and fertilizers, as national governments race to offset the economic shock caused by the surge in prices triggered by the war in Iran, Reuters reported.
As part of a broader package of measures Brussels is preparing in response to the surge in energy prices, European Commission President Ursula von der Leyen proposed on Monday a change to EU state aid rules to allow for more public spending in sectors heavily affected by rising fuel prices, including agriculture, road transport, and shipping in Europe.
The changes will allow governments to cover part of the price increase that companies have paid for fuel or fertilizers, compared to prices before the start of the war between the U.S., Israel, and Iran on February 28.
The draft EU plan will also increase the maximum share of aid that energy-intensive industries can receive to cover their electricity costs to over 50%.
European governments, including Bulgaria, have already introduced funding measures—some modest, others more generous—including fuel price caps and tax breaks, to try to limit the economic fallout from the war with Iran. Feedback from national leaders on the EU’s proposals is expected before the Commission adopts a final version by the end of the month.
The proposed changes will be temporary and will be introduced specifically to address the energy consequences of the war with Iran. However, judging by the experience with COVID-19 aid, the frequent election cycles in Europe create significant hesitation among governments to discontinue public support once it has been granted.
The Commission will, however, review state aid provided by national governments to ensure it does not distort competition in the EU’s single market.
Statement by Ursula von der Leyen
On April 13, 2026, following an orientation debate in the European Commission, President Ursula von der Leyen made a statement regarding the economic impact of the crisis in the Middle East on the European Union. The debate took place on the 44th day of the conflict’s escalation and aimed to lay the groundwork for the Commission’s communication, to be presented ahead of next week’s informal European Council in Cyprus. Von der Leyen emphasized that this would not be the last such debate, but its results provide an important framework for the upcoming decisions by EU leaders.
Economic Impact on the EU
Von der Leyen presented specific data illustrating the scale of the crisis. Since the conflict began 44 days ago, the EU’s bill for fossil fuel imports has risen by over €22 billion, without a single additional molecule of energy being received. This fact illustrates the “enormous impact” of the crisis on the European economy, as even if hostilities were to cease immediately, disruptions to energy supplies from the Persian Gulf would continue for some time. The key message is that this is the “second fossil fuel shock” in just a few years and that Europe is “paying a very high price for its over-reliance on fossil fuels.” In a world where everything is interconnected, the effects of the crisis are direct and immediate, and citizens feel them at gas stations, in supermarkets, and in their household bills.
Immediate measures at the EU level
Coordination among member states
Von der Leyen confirmed that the lessons from the 2022 energy crisis will be applied through robust coordination among member states. According to her, the EU Energy Platform has proven its effectiveness and helped aggregate gas purchases totaling 90 billion cubic meters, of which 77 billion cubic meters were successfully matched between buyers and suppliers. On this basis, the Commission envisages:
- Coordinated filling of Member States’ gas storage facilities to avoid simultaneous market entry and mutual competition.
- Coordinated release of oil reserves to achieve maximum impact.
- Ensuring that Member States’ emergency measures do not disrupt the functioning of the Single Market.
Support for vulnerable households and sectors
Building on lessons learned from the previous energy crisis, the President noted that support measures must be targeted at vulnerable groups, timely (immediately applicable, not a year from now), and temporary. Best practices for designing income support schemes will be presented. As early as this week, the Commission will consult Member States on more flexible state aid rules to expand the scope for temporary support in the most exposed sectors. The aim is for a new temporary state aid framework to be adopted as early as April.
Reducing demand
The third pillar of the immediate measures is reducing consumption—“the cheapest energy is the energy we don’t use.” The focus will be on energy efficiency levers: renovating buildings and upgrading equipment in industrial processes, while fully respecting consumers’ freedom of choice.
Structural measures to reduce energy prices
The Commission is continuing its work on the four components of energy bills discussed at the previous European Council: energy itself (the largest component), network tariffs, taxes and levies, and the ETS (the smallest component) .
- ETS Reform – Regarding the ETS, the Commission has proposed changes to the Market Stability Reserve (MSR), ending the cancellation of allowances and strengthening the reserve’s capacity. The aim is to increase the stability and predictability of ETS prices without losing price signals. Consultations with Member States on updated ETS benchmarks are forthcoming, utilizing all available options in the legislation. The full review of the ETS system will be presented in July.
- Electricity taxes and network charges – Work on legislative proposals for the other two components is progressing; electricity taxes and network charges will be presented in May.
Decarbonization as a strategic response
The most significant structural message of the statement is the reaffirmation of the decarbonization strategy as a response to dependence on fossil fuels. According to von der Leyen, “energy from fossil fuels will remain the most expensive option in the coming years,” but Europe already has assets—electricity generated from renewable sources and nuclear energy—which together already account for over 70% of electricity production in the EU. The goal is the accelerated deployment of local, affordable, and reliable energy that ensures independence, predictability, and energy security.
Grids, Electrification, and Investments
Grid Package
Significant volumes of clean electricity currently remain unused or even lost due to limitations in the integration of European grids. Storage, flexibility, and grid interconnections need to be accelerated. The Networks Package, presented in December 2025, was initially scheduled for adoption by the co-legislators by the end of 2026, but given the heightened sense of urgency, von der Leyen called for the package to be approved by the end of summer 2026.
Electrification Strategy
The EU is lagging behind China and the US in electrification. Before the summer, the Commission will present an electrification strategy that will include an ambitious new goal: “only what is measured gets done.” The strategy will cover industrial operations, home heating, and mobility, with a focus on removing remaining regulatory barriers and mobilizing investment.
Investments – Public and Private Capital
The President called on Member States to make more effective use of available EU funding, in particular the Cohesion Funds, for investments in grids, storage, and batteries. However, public funds are not sufficient, and the Commission will organize an Investment Conference to mobilize private capital in these areas.
What specifically is expected to be discussed by the European Council next week
Ursula von der Leyen’s statement of April 13, 2026, outlines a two-pronged approach in response to the crisis: short-term measures to protect consumers and businesses, and structural reforms to reduce the Union’s long-term vulnerability. The main strategic thesis is that the only sustainable way out of dependence on fossil fuels lies in modernization, manifested in a transition to electricity generation from renewable sources and nuclear energy, as well as the fastest possible electrification of the economy.
The leitmotif “security is indivisible”—derived from the context of Lebanon and the Strait of Hormuz—is also applied to the energy dimension: the EU’s energy security depends both on geographical and geopolitical stability and on its own structural choices regarding decarbonization, grid integration, and electrification. The communication, which will be presented on Wednesday ahead of the European Council meeting in Cyprus, will flesh out this framework and propose to EU leaders a package of measures for immediate and structural action.
The temporary state aid framework currently being prepared in response to the energy crisis will provide concrete tools for short-term response, while a separate long-term plan will outline a systematic approach to structural transformation.
In the area of agriculture and fisheries, the Commission is proposing targeted support covering up to 50% of the additional costs for fuel and fertilizers resulting from the crisis. Of particular significance is the fact that fertilizer prices have risen by 58% compared to the 2024 average, which directly affects food security. The measures will remain in effect until December 31, 2026, and will be based on current or pre-crisis consumption levels, avoiding the promotion of excessive consumption.
In the transport sector, the impact is particularly noticeable, with fuel prices for road transport having jumped by 21% in March 2026 compared to the same period the previous year. The framework provides for similar support of up to 50% of additional costs, but with a more nuanced approach for rail transport, where operators can receive up to 60% compensation for external costs under the transport block exemption regulation. For maritime transport, the focus is on maintaining connectivity, especially for short domestic routes, which are critical for island territories and peripheral regions.
Also significant is the amendment to the Clean Industry State Aid Framework (CISAF), which allows for a deviation from established rules by covering up to a 70% reduction in the annual average electricity price. This creates the possibility of cumulating aid under CISAF with that under the ETS guidelines up to a maximum of 50%, which provides flexibility in designing support schemes.
The plan to accelerate the Energy Union unfolds a coordinated set of immediate and long-term measures. In the short term, the Commission envisages enhanced coordination of gas storage filling with a flexibility of up to 10%, which can be increased by an additional 5% in the event of persisting adverse market conditions. The coordinated release of oil stocks will be accompanied by maximizing the use of refining capacity in the EU, which is particularly critical given that 40% of the Union’s kerosene consumption is imported.
Consumer protection is structured around several instruments. The temporary state aid framework, which will enter into force in April 2026, will be complemented by the creation of a digital repository for sharing information on national measures among Member States. The practical guidelines for consumer protection will cover social tariffs, energy vouchers for vulnerable households, and VAT rebates for technologies such as heat pumps that accelerate the transition to clean energy.
Energy savings are supported by a catalog of measures to replace fossil fuels with local clean sources, which will be presented in May 2026 at the informal meeting of energy ministers in Cyprus. The catalog will include measures successfully implemented since 2022 with high replication potential. Social leasing schemes for clean technologies will facilitate access for vulnerable households to electric vehicles, heat pumps, and storage systems. At the EU level, the creation of a geothermal database and risk-reduction schemes is planned in cooperation with the European Investment Bank.
In the long term, the grid package takes on critical importance, with the Commission calling for its adoption by the summer of 2026 instead of the originally planned end-of-year target. This acceleration reflects the growing sense of urgency. The electrification plan, which will be presented in the second quarter of 2026, will include an ambitious electrification target and address barriers in the industrial, transport, and construction sectors. Storage capacity must be expanded from the current 55 GW to significantly higher levels by 2030.
Legislative proposals on grid fees and taxation in May 2026 aim to structurally reduce system costs. Mandatory incentives for grid operators to improve cost efficiency through smart technologies, as well as stronger incentives for consumers to adapt their behavior to system needs, are planned. The review of criteria for renewable hydrogen in June 2026 aims to accelerate the development of electro-sustainable aviation fuels.
The investment dimension will take shape through a clean energy conference in the second and third quarters of 2026, which will bring together the financial sector, industry leaders, and public financing institutions. The focus will be on sectors with immediate impact such as storage, electric vehicle infrastructure, industrial electrification, and large-scale solar thermal energy. Maximizing the use of funds from the Recovery and Resilience Facility and the Cohesion Funds will be accompanied by the development of standardized financial products for clean heating and renovation.
Quantitative indicators from the REPowerEU experience demonstrate the effectiveness of coordinated action at the EU level. The 18% reduction in gas demand between August 2022 and March 2023, as well as the successful joint purchases of 77 billion cubic meters of gas between buyers and suppliers, demonstrate the potential of a collective approach. According to the Commission, the need for €660 billion annually through 2030 for the energy transition underscores the scale of the challenge, but also the opportunities for mobilizing private capital through the right policy frameworks.
These detailed measures will be transformed into concrete operational tools with clear deadlines for implementation and measurable targets, with the aim of creating a comprehensive framework to respond to the crisis and accelerate Europe’s energy transition.
