European Union energy ministers gathered in Brussels on Thursday to discuss a new proposal to limit the wholesale price of gas under strict conditions, with several ministers showing their discontent upon arrival.
A documented proposal initiated by the European Commission two days earlier would set a cap on gas prices at 275 euros ($283.9) per megawatt hour got slammed by many and was called a “joke.”
European ministers were grappling over the proposal’s effectiveness and its impact on supplies and incentives to cut consumption.
The long-standing disagreements were holding up other policies to alleviate the acute energy crisis, such as the launch of joint EU gas purchases and a quicker permit process for renewables.
Diplomats said the 27 EU countries agreed on these two in principle but delayed formal approval until another meeting called for Dec.13, with proponents of a cap demanding a green light for all three proposals or none at all.
“The gas price cap, which is in the document, currently it doesn’t satisfy any single country,” Polish Climate Minister Anna Moskwa said as she arrived at the meeting.
“It’s a kind of joke for us after so many amounts of discussions and proposals” to arrive at the price cap put forward, she said.
France, Spain and Greece have also come out criticizing the commission’s proposal.
Belgium’s Energy Minister Tinne Van der Straeten also chimed in, telling reporters: “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 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.
After repeated calls for a legislative proposal for a gas price cap from some member states, the European Commission presented earlier this week a proposal for capping the price of gas traded at the Dutch reference hub Title Transfer Facility (TTF).
The cap would take effect automatically on the month-ahead price of gas if the price exceeds 275 euros per megawatt hour for two weeks and the spread to global liquefied natural gas (LNG) prices is 58 euros or higher – conditions that make it uncertain if the measure would ever be applied.
“That definitely is not what we have asked for as part of the block of 15 countries that wanted a cap on the price of gas,” said Malta’s Energy Minister Miriam Dalli.
But stiff opposition comes from a smaller but powerful camp led by Germany, the EU’s biggest economy. Together with the Netherlands, Sweden, Austria and Finland, they say a cap could shift supply elsewhere and cut incentives to lower consumption.
The Estonian minister was the only one to say the plan was “OK, pretty much” as a temporary measure and only to address extreme price increases rather than a permanent solution.
The European Union has approved a series of measures to mitigate the crisis in recent months, ranging from consumption savings to windfall taxes to claw back profits from energy producers. But the issue of whether and how to cap gas prices has split the bloc.
The price cap plan, if adopted, would start in January. It would run alongside a voluntary initiative for EU member states to cut natural gas use by 15% over the Northern Hemisphere winter.