Spain as a European model for addressing the energy crisis: the Sánchez plan and the EU's challenges

Translated by Gaia Baraldi

A new emergency has emerged on the European agenda, adding to the critical issues of recent years, due to the pandemic and the Russian-Ukrainian conflict: the energy crisis. While in previous months the EU's attention was dominated by trade tensions with the United States, in March the focus of the debate shifted to the conflict in West Asia between the United States, Israel, and Iran.

The cost of the EU’s missed energy choices, or of those taken too late, is now coming due. Europe imports 58% of its total energy needs, with dependence reaching 95% for oil and 90% for gas. In this context, instability in the Strait of Hormuz is significantly affecting the European Union. Despite the momentum given to the Green Deal during von der Leyen’s first term, the Russian invasion of Ukraine has shifted priorities, pushing Europe toward a heavy dependence on liquefied natural gas imported from the United States.

According to an analysis by the think tank Ember, reported by Il Fatto Quotidiano, in the first ten days of the current conflict alone, the European Union has paid an extra 2.5 billion euros for fossil fuel imports, with gas-generated energy prices rising by more than 50%.

In this critical landscape, Spain's strategy stands out from all others. The government led by Pedro Sánchez has launched a €5 billion plan consisting of 80 specific interventions. Defined by the Prime Minister as "the largest social and economic shield in the EU," the project aims to protect 20 million families and 3 million businesses.

Unlike the Italian approach, which focused primarily on tax credits, excise duty reductions, and subsidies for agricultural diesel, Madrid has implemented a response that combines immediate support with a long-term vision.

To mitigate the immediate impact of price hikes, the plan includes a series of temporary measures aimed at easing the tax burden on consumers, including:

• VAT on electricity, gas, and heating fuels has been reduced from 21% to 10%.
  
• A ban has been introduced on cutting off water and energy supplies for households in energy poverty. At the same time, social bonuses have been strengthened.
• Companies receiving public aid are banned from carrying out layoffs.
• Direct funds have been allocated to the agricultural, livestock, and fishing sectors, which have been the hardest hit by rising production costs.

The key feature of the Spanish plan, however, lies in the structural measures, designed to reduce the country's dependence on fossil fuels:

• To encourage sustainable mobility, a 15% personal income tax deduction is available for the purchase of electric or plug-in hybrid cars.
• Companies that choose to replace obsolete systems with systems powered by renewable energy sources can benefit from preferential depreciation schemes.
• Municipalities can reduce property taxes by up to 50% for those who install photovoltaic panels or renewable thermal systems, with discounts of up to 95% for the construction of the systems themselves.
• To ensure that the tax benefits actually reach citizens, the Spanish Antitrust Authority has been granted special monitoring and sanctioning powers.

This is therefore not simply an emergency response, but a plan based on renewable energy and accelerating the transition path already undertaken, aimed at strengthening the country's energy sovereignty.

Based on the Spanish model, the current crisis poses a fundamental question for Europe: should we continue to manage emergencies with stopgap measures or should we transform energy sovereignty based on renewables into an absolute priority that can no longer be postponed?

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