EU energy ministers clash in discussions over proposed gas price cap

  • November 24, 2022
EU energy ministers clash in discussions over proposed gas price cap

EU energy ministers clashed during discussions over a proposed gas price cap of 275 euros per MWh, Reuters reported.

Long-standing disagreements have delayed other measures to alleviate the acute energy crisis, such as launching joint EU gas purchases and speeding up the renewable energy permitting process.

Diplomats said the 27 EU countries agreed in principle to the two proposals but delayed formal approval until the next meeting, scheduled for Dec. 13.

Polish Climate Minister Anna Moskwa called the €275 plan proposed by the European Commission "a joke."

Belgian Energy Minister Tinne Van der Straeten said that "The text that is on the table is unsatisfactory (...) it doesn’t clearly say if it will have an effect on prices."

Their Greek counterpart Konstantinos Skrekas said a cap of 150-200 euros/MWh would be realistic. "It could help us reduce gas prices and therefore reduce electricity prices, which is a major challenge in Europe this winter," he said.

Malta was also unhappy with the proposed ceiling. Energy Minister Miriam Dalli said the strict conditions needed to trigger the mechanism make it "almost impossible."

The 15 EU countries want a ceiling on gas prices to contain energy costs.

But stiff opposition comes from a smaller but powerful camp led by Germany, the EU's largest economy. Along with the Netherlands, Sweden, Austria and Finland, they say the cap could move to undermine supplies and reduce incentives to reduce consumption.

The Commission has proposed a first month price cap on TTF if it exceeds €275/MWh for two weeks and if the price of liquefied natural gas (LNG) is more than €58 higher.

Dutch Minister Rob Jetten sharply criticized the plan. The proposal is "flawed" and carries a "lot of risks" for the security of supply and financial stability, said Dutch Energy Minister.

German Secretary of State for Climate Sven Giegold added: "We still have a lot of work to do."

The Estonian minister was the only one to say that the plan is "largely" a temporary measure and is only meant to address price spikes, not a permanent solution.

In recent months, the EU has approved a number of measures to mitigate the effects of the crisis, ranging from consumption savings to contingency taxes to profit from energy producers. But the question of whether and how gas prices should be capped has split the EU.

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