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EU to meet on gas price ceiling

Brussels (EFE) – European Union energy ministers will discuss on Thursday the European Commission’s proposal to cap gas prices on the TTF futures market.

The appointment, which has been declared intense, as both the countries that demand intervention and those that did not want any proposals on the table criticize the initiative.

Most Member States have been pushing for months for Brussels to develop a system to limit bulk gas purchases from the EU, with Italy, Spain, Poland or France pushing in that direction.

But the Commission, in alliance with Germany and the Netherlands, was unwilling and dragged its feet until the pressure became unbearable, so strong that some capitals threatened to block other energy texts that expected smooth processing, such as a future joint procurement system or an acceleration issuing permits for large renewable energy sources.

EU to face tense meeting on gas price capsEU to face tense meeting on gas price caps
European Energy Commissioner Kadri Simson. EFE/EPA/Oliver Hoslet

Finally, ahead of the fourth extraordinary meeting of the Energy Council, starting in July, European Energy Commissioner Kadri Simson introduced a legislative proposal to curb skyrocketing prices on the TTF market in Amsterdam, which serves as a reference to much of Europe’s gas contracts.

In particular, the mechanism proposed by Brussels as a “last resort” would cap the price of monthly TTF gas futures to €275 per megawatt hour (MWh), but it would only be activated if the threshold was exceeded within two years. weeks and provided that the difference in the price of liquefied natural gas (LNG) on international markets exceeds 58 euros.

In addition to these two conditions, the bill includes an arsenal of guarantees to suspend the restriction if it threatens the security of supply or the stability of financial markets, making the mechanism practically unusable.

In fact, its current design means that it would not have been activated even last August, when the price of gas per month from TTF touched 350 euros and set a record in European history. But it did not stay above the 275 level for more than 14 days, so if it worked, the mechanism would not work.

For this reason, Simson’s proposal, put forward on Tuesday, has angered the most ambitious countries, with even Spain’s Vice President for Ecological Transition Teresa Ribera calling the measure “teasing.”

EU to face tense meeting on gas price capsEU to face tense meeting on gas price caps
Third Vice President and Minister for Ecological Transition and Demographic Challenges Teresa Ribera. EFE/Kiko Huesca

“The most dramatic thing is that we asked him to present us with a proposal, and it’s not a serious proposal, it’s a joke,” said Ribera, who predicts Brussels “will hear very harsh things” at tomorrow’s meeting of energy ministers. from most of the capitals.

In the same vein, Greek government sources note that the €275 limit is “too much” and that is why Athens will seek alliances with other countries that have advocated lowering the limit below €200.

An ally in this endeavor will be Poland, whose Prime Minister Mateusz Morawiecki openly stressed that the figure proposed by the Commission is “very high.”

Against them – and despite the fact that the mechanism is designed in such a way that it is almost never used – are countries such as Germany, the Netherlands or even Hungary, which prefer not to approve the mechanism with such conditions.

The Hague even deplores the fact that the legislative proposal made it to the table of ministers, an extreme that the Commission tried to avoid until the last moment, and points to energy conservation as the only solution in the current exorbitant price situation.

By Peter Kavinsky

Peter Kavinsky is the Executive Editor at cablefreetv.org