Soaring gas prices are reaching a crisis point in Europe, threatening to derail the proposed expansion of the carbon cap and trade program at the center of the EU’s Green Deal package of policies aimed at hitting net zero emissions by 2050. A combination of increasing demand as the COVID-19 pandemic worries ease globally, alongside already low production and supply as the weather turns colder, and low winds reducing the renewable power generated, have driven gas prices up across the continent.

In the UK, seven retail energy suppliers have collapsed since August. Efforts are being made to shield low-income residents from the high bills, as governments across Europe scramble to provide cash assistance, cap prices, and ban utility shutoffs.

Some have pointed a finger at wind power’s intermittency exacerbating the gas crisis, and some EU representatives are calling for a reconsideration of a plan to extend the Emissions Trading Scheme to cover heating oil, petrol, diesel, and gas – which would raise prices on consumers if not offset by subsidies. The extension of the cap-and-trade program is a crucial lever to reach the EU’s goal of reducing greenhouse gas emissions by 55% from 1990 levels by 2030 and net zero by 2050. Officials in Brussels have said the crisis demonstrates the need for more investments in battery storage, transmission, modernizing the grid, and improving building efficiency that together can make it so renewables are able to supply the vast majority of power needs.

Further, the crisis has illustrated the EU’s significant vulnerability in relying on Russia as its largest supplier of gas; on Wednesday, U.S. Secretary of Energy Jennifer Granholm implied Moscow was manipulating gas markets to pressure Europe to approve the controversial Nord Stream 2 pipeline to Germany. EU energy commissioner Kadri Simson said it’s urgent the bloc “end our dependence on foreign volatile fossil fuels as soon as possible.” (ReutersNew York TimesCNBCBloombergWall Street Journal, europe $, FTThomson Reuters Foundation)