With skyrocketing energy prices threatening the EU economy’s stability last year, the European Parliament discusses this week the REPowerEU Plan as the “green” response to the hardships and global energy market disruption caused by Russia’s invasion of Ukraine.
However, it is critical to consider the unique needs of SMEs, such as the high demand for investment and planning stability. Currently, with the EU-safeguard measures on Steel and Aluminium still in place, we are sceptical that wind and solar power can be extended rapidly, given the extremely high prices and lack of raw materials.
In this context, the European Parliament should revise the Commission’s proposal for REpowerEU, adding temporary financial assistance to SMEs to support them if the situation worsens. Guarantees, loans, grants, allowing member states to reduce VAT for electricity and fuel, or eliminating other fuel taxes may all be helpful. However, because of the potential negative impact of VAT reductions, these measures should be considered primarily in times of crisis and only for limited time periods. It is also crucial to provide SMEs with specific hubs for advisory and networking services to “green” their operations and business models, integrate better into regional circular economy cycles, and support their green innovation. This would help much more to reduce energy consumption and raw materials, thus reducing costs, with positive climate effects and increased business figures.
