By Kate Abnett

BRUSSELS (Reuters), EU leaders failed to come to an agreement on Thursday on how they would respond to the escalating energy prices. The price rise has exposed old divisions regarding the EU’s climate goals, and also divided nations over whether the EU should overhaul its energy market rules.

Last week the European Commission released a “toolbox”, which outlines what national measures can be taken by governments. The toolbox also indicated that Brussels would consider longer-term strategies to deal with price shocks.

These options were discussed by EU leaders on Thursday. However, they halted talks after just a few hours. They plan to resume the discussion after an exchange on the growing row between Poland and the EU over the rule-of-law.

As winter approaches, countries are divided over the best way to address rising energy prices.

Many EU nations have prepared emergency actions plans for consumers to safeguard them, which include tax and financial cuts as well as subsidies for households with lower incomes.

Reuters saw a draft from their summit conclusions and it invited countries to immediately use the toolbox to “provide short-term relief to most vulnerable consumers” as well as to support European firms.

However, longer-term measures are less contentious. A diplomat from the EU said that a sticking point during Thursday’s negotiations was certain countries’ demand for an overhaul of Europe’s carbon market.

FAMILIAR TENSONS

The Czech Republic and Poland have requested that the EU limit the participation of financial speculators in the carbon marketplace. They claim this has contributed to the record-breaking rise in CO2 prices.

Brussels previously rejected such requests, warning that intervention in the scheme could undermine trust in the markets. Germany and the Netherlands, among others, have warned against intervention. Other states fear that they will need to change regulations as a result of a temporary crisis.

European gas prices hit new highs due to tight supply. This has happened amid rising CO2 prices, and lower than expected gas supplies from Russia. According to the Commission, gas prices are expected to stabilize at a lower level in April.

Spain, Italy, Greece and Greece want the EU to respond to the price surge by buying gas together from EU countries in order to establish strategic reserves.

The summit’s draft conclusions did not recommend any actions. This suggests leaders may pass this issue to an urgent meeting of EU energy Ministers on October 26.

Reuters saw a preparatory note that ministers had received ahead of the meeting. It stated that they would discuss “what additional measures could be taken at EU level and member state levels, including using EU financial instruments,”

A price increase has also created tensions around EU climate policies, with Poland calling on Brussels for changes or delays to its green plans.

Viktor Orban, the Hungarian Prime Minster, dismissed Thursday’s EU climate policy proposals as “utopian fantasies”. This view contrasts with others who believe that high gas prices are necessary to accelerate Europe’s transition to renewable energy in order to decrease countries’ vulnerability to volatile fossil fuel prices.