Soaring energy and food prices bring instability to European hospitality
Gas and electricity prices have reached record levels in 2022 and are expected to remain high.
The current situation – caused by the increase in food prices, labour costs, labour shortages, and high inflation – is producing a climate of unpredictability and fear of recession in the hospitality sector, which is still in the phase of recovery.
With the aim of tackling the high energy prices, on 14 September, the Commission proposed a Council Regulation (COM (2022) 473 final). Overall, the initiative includes the following points:
- Obligation to reduce electricity consumption by at least 5% during selected peak price hours, in order to reduce consumption.
- A temporary revenue cap on ‘inframarginal’ electricity producers, targeting technologies with lower costs, set at €180/MWh.
- A temporary solidarity contribution on excess profits generated from activities in the oil, gas, coal and refinery sectors.
- Demand reduction targets:
- Member States to reduce their gross electricity consumption by at least 5% during certain peak hours (binding target).
- Member States to put in place measures (information and communication campaigns, calls for tender, financial incentives, etc.). to reduce their overall electricity consumption by at least 10% by 31 March 2023 (indicative target).
- Setting up a European hydrogen bank.
- Revision of the EU’s internal electricity market rules with a view to presenting a legislative proposal in early 2023.
As the idea of a gas price cap is currently diving the Member States, a working group counting with the participation of the Commission, Member States and Norway will be established. It is currently unpredictable if legislation will be issued on the topic.
It is now up to the Council to analyse and decide on the Council Regulation (the next meeting is scheduled for 30 September 2022).
HOTREC calls on the EU institutions to act in a coordinated way, in order to save businesses, especially SMEs. There is a need to decrease energy prices and allow companies to access energy supplies. Only in this way the hospitality sector can continue its activities and aim at being more energy efficient.