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 expect 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 gas price cap. According to the green minister,a majority of countries have joined our advocacy“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 wants”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, charged with its armies of technicians to define a system”implementable“.”There will be a new Council before the end of the month, the idea is to have something implementable by then“.

We now know exactly which direction we should take“, indicated at a press conference the Czech Minister Jozef Sikela, whose country holds the rotating presidency of the Council of the EU. The 27 firstly gave the mandate to the Commission to make a formal proposal to cap the income of electricity producers currently reaping record profits. These are those who do not produce using gas but profit precisely from electricity prices calculated on the basis of the “merit order” and the marginal cost of the last unit needed (most of the time a gas-fired power plant) This cap would be accompanied by solidarity crisis contributions requested from companies active in fossil fuels.

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

Ministers finally asked the Commission to present measures “to coordinate reductions in electricity demand” across the EU and for “help solve cash flow problems” on the energy markets, according to the explanations of the Czech minister.

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