The European Commission will this month propose easing state aid rules as it rushes to help EU governments cope with a fresh energy shock tied to the Iran war. Ursula von der Leyen said Monday that the Commission will consult member countries on the changes this week.
The move comes after the conflict pushed Europe’s energy costs sharply higher, adding €22 billion to the EU’s bill since it began. On Sunday, U.S. President Donald Trump said the United States would blockade the Strait of Hormuz after peace talks with Iran collapsed over the weekend, sharpening fears over a waterway that carries a fifth of global energy trade.
Brussels is trying to do more than just loosen the rules on how governments can support struggling industries and households. The Commission plans to release a toolkit on April 22 with plans for gas storage filling and guidelines for temporary measures to reduce taxes on energy bills and curb demand. Those demand-reduction schemes could center on building renovation and the renewal of industrial equipment, two changes the Commission sees as part of a longer push to cut fuel use.
Von der Leyen also urged lawmakers and member countries to finish work on the EU grids package by the beginning of the summer, a sign that the Commission wants the bloc’s energy infrastructure to keep pace with the crisis. In May, it plans to present a legislative proposal on changes to electricity taxes and grids charges, and before the summer it intends to adopt an EU-wide electrification target. An updated set of benchmarks for the emissions trading system will also be released imminently, with the ETS review still set for July.
The wider problem is that EU governments have been pressing for quicker relief as prices spike and supply fears spread after the closure of the Strait of Hormuz. The Commission says electrification is the long-term answer to soaring oil and gas costs, but it is pairing that message with short-term tools because the market shock is hitting now.
That is also why the plans matter for countries such as Croatia, which will be watching closely as Brussels weighs how much room national capitals should have to cushion consumers and industry. A pipeline across the Balkans could end Budapest's dependence on Russian oil, but Prime Minister Viktor Orbán's government is resisting the project, underscoring how energy security remains tangled with national politics even as the Commission looks for a bloc-wide response.
The latest two-week truce has done little to calm fears about shortages and higher prices, and that leaves the Commission scrambling to show it can move faster than the crisis. The next test is whether member states, including Croatia, back the coming package quickly enough for Brussels to turn its plans into real relief before the summer heat and higher demand arrive.