UK markets closed

Greek PM proposes EU payment to industries for cutting gas use

·1-min read
FILE PHOTO: South East European Cooperation Process (SEECP) summit in Thessaloniki

ATHENS (Reuters) - Greek Prime Minister Kyriakos Mitsotakis has proposed an EU-wide mechanism that would compensate industries for cutting their gas use this winter as part of European efforts to cope with tight gas supplies, his office said on Tuesday.

EU countries approved a weakened emergency plan to curb their gas demand on Tuesday, after striking compromise deals to reduce the cuts for some countries, as they brace for further Russian reductions in supply.

European countries have been struggling to cut their dependence on Russian gas and to build reserves following Russia's invasion of Ukraine in February.

In a letter sent to the President of the European Commission, Ursula von der Leyen, on Monday, Mitsotakis proposed a Europe-wide mechanism that will compensate industrial users for cutting their gas and electricity consumption this winter.

Mitsotakis said the mechanism would cover reductions in demand for several months rather than hours or days and would combine elements from energy market design and a way to compensate industry fairly.

"By offering financial incentives, rather than relying on the penalty of interruptions during an emergency, the proposal is more likely to unlock a firm and sizable response from industry," he added.

The tool would be financed by national and European resources, demonstrating solidarity and allowing funds to flow to those most capable of cutting their gas use, Mitsotakis said in the letter.

Greece relies on Russian gas for 40% of its needs and uses two thirds of the fuel for power generation. It has asked to be exempted from EU gas demand cut.

(Reporting by Angeliki Koutantou; Editing by Nick Macfie)

Our goal is to create a safe and engaging place for users to connect over interests and passions. In order to improve our community experience, we are temporarily suspending article commenting