EU energy ministers agree on gas price cap

The 27 EU member states agreed on Friday on four urgent solutions to soaring energy prices. “Four main areas in which the 27 are expecting legislative proposals from the Commission in the coming days, with the hope of concluding before the end of the month”, summed up Czech Minister Jozef Sikela in the afternoon. One element is brandished as a victory by Belgian Minister Tinne Van der Straeten: the Commission is eagerly awaited by the 27 on a cap on gas prices. According to the environmental minister, “a majority of countries have joined our plea” for a general cap on the price of gas imported into Europe, whether Russian or not. The technical details of such a cap, which the Belgian wishes to be “dynamic” (for example coupled with the price level on the Asian market), have not been discussed, it will be necessary to wait for the official texts of the Commission, responsible with its armies of technicians to define an “implementable” system before a new Energy Council at the end of the month.

The Member States will be closely involved in the technical preparation of the formal texts, Belgium already being in line with Italy and Germany. Before this extraordinary Council devoted to Energy, the position of Berlin, a decisive actor on the European scene, was uncertain. “Germany has not explicitly come out against a cap,” said a source close to the discussions.

The Commission had mentioned a price cap targeting only gas imported from Russia, by pipeline (therefore not liquefied natural gas, or LNG). A solution seen as simpler to implement than a complete cap, and with a direct effect on the income of the Moscow regime. “Insufficient” or even insignificant, for Belgium, when one thinks of the need to lower the final household bill. Other countries, led by Hungary, remain on the contrary quite dependent on Russian gas and had expressed their opposition to such a measure.

In an unofficial 5-page document published on Wednesday, the Commission outlined various avenues for urgent action to reduce the pressure on households and businesses and ensure supply as winter arrives. The 27 had to sort of make their selection from this catalogue, and reach a sufficient consensus to give a precise and robust mandate to the executive.

“We now know exactly which direction we must take,” said Czech Minister Jozef Sikela, whose country holds the rotating presidency of the EU Council, at a press conference. The 27 first gave the Commission a mandate to make a formal proposal to cap the income of electricity producers currently making record profits. These are those who produce, for example, using nuclear or renewable energy, but who take full advantage of electricity prices driven up by the price of gas. This cap would be accompanied by solidarity crisis contributions requested from companies active in fossil fuels. These new revenues should be used to lighten the burden on households and businesses or invest in renewables.

The second point is a “temporary and emergency” intervention on the gas market, with the famous “price cap” put forward by Belgium and Italy, among others.

Ministers finally asked the Commission to present measures “to coordinate reductions in electricity demand” across the EU and to “help solve liquidity problems” in energy markets, according to the ministers. explanations from the Czech minister.

The summary of the meeting published by the Czech Presidency does not specify whether we are talking about voluntary or compulsory reductions in electricity consumption, although this point is debated among the 27. But the European Commissioner for Energy Kadri Simson specified at a press conference that the Commission’s intention was to “propose to the Member States a binding target for reducing consumption at peak times”. You have to focus on those hours of high demand, says the commissioner, because that’s where gas-fired power plants come in to match supply, the same gas-fired power plants that also inflate prices.

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