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EU Plans to Cut Electricity Taxes to Shield Households from Iran War Energy Crisis

The European Commission has announced a new package of measures aimed at protecting EU households and businesses from rising energy prices triggered by the war in Iran. The plan focuses on lowering electricity taxes and accelerating the shift away from oil and gas, helping consumers reduce bills while strengthening Europe's energy independence.

A central element of the proposal is the revision of EU tax rules so that electricity is taxed less than fossil fuels. Member states will also be allowed to reduce industrial electricity taxes down to zero, encouraging both businesses and households to adopt cleaner energy sources. On average, network charges and taxes currently account for more than 50% of a household's electricity bill across the EU.

To support the transition, the Commission plans to promote social leasing schemes for clean technologies — including electric vehicles, heat pumps, and small-scale batteries — and help member states design financial incentives that comply with fiscal rules. A new electrification target will be set before the summer to drive faster adoption of electric solutions in transport, buildings, and industry.

The plan also addresses energy security through coordinated gas storage refilling ahead of winter, the monitoring of transport fuels, and temporary state aid rules that allow governments to shield consumers and businesses with targeted, timely, and temporary support. According to the Commission, the Iran war has already cost the EU an additional €24 billion in energy imports.

Overall, the initiative is expected to ease pressure on European households, accelerate the deployment of EV charging and clean technologies, and reinforce the EU's long-term move toward an electrified, fossil-free economy.

Source: The Guardian

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