New EU Energy Commissioner will seek to swap petro-dollars for petro-euros

The incoming new European Union (EU) Energy Commissioner has pledged to increase the role of the euro in energy markets, instead of the US dollar, writes Keith Nuthall. Former Estonian Minister for Economic Affairs and Infrastructure Kadri Simson, then responsible for her country’s energy policy, is expected to assume her new EU role on 1 November 2019, when a new European Commission takes office.

In a written response to questions from the European Parliament, which is vetting her appointment, Simson said she would ‘work to increase the use of the euro in energy markets, given that, despite the EU being the world’s largest energy importer, roughly 85% of EU imports are currently paid in dollars’.

Unsurprisingly, a mission letter sent to Simson from incoming European Commission President Ursula von der Leyen stressed how she wanted Simson to make the EU energy sector more sustainable. And she will have to respond to an early policy move that will be undertaken by Frans Timmermans, the proposed Commission Executive Vice-President for the ‘European Green Deal’ – an overarching policy of the von der Leyen Commission, which will serve until 2024. Timmermans has been charged with proposing a green deal plan within 100 days, which will increase EU carbon reduction targets to at least 50% by 2030, up from the current 40% reduction target.

In her note to MEPs, Simson said she would ‘assess the role of gas, including decarbonised gases like hydrogen, in the transition towards a climate-neutral economy’. At the same time, she would ‘assess how sources of natural gas supply can be diversified at competitive prices’. In her mission letter to Simson, von der Leyen said this should ‘in particular [make] full use of the potential of affordable LNG’. Simson added that she would help review the EU energy taxation directive to drive climate neutrality and end fossil-fuel subsidies. She would also help design an EU ‘carbon border tax’, imposing duties on imports made with high carbon emissions.

Incoming EU Energy Commissioner Kadri Simson
Photo: European Commission