The EU remains deeply divided over gas price cap

The measures are expected to be approved at the next extraordinary Energy Council on November 24

There is still a deep division among the countries of the European Union (EU) on the need to intervene in the gas market, although the Twenty-seven do expect to approve the least controversial measures, such as joint purchases of hydrocarbons, in an extraordinary Energy Council convened on November 24.

It is the main reading of a Council of Energy Ministers of the EU countries held in Luxembourg, where positions have barely moved despite several ordinary and extraordinary ministerial and leaders’ meetings, formal and informal, held since September.

The controversy with the price of gas

A majority of countries are calling for interventionist measures, such as emulating throughout the EU a system similar to the “Iberian mechanism” that decouples gas and electricity or a price cap on gas purchases, compared to another immobile bloc led by Germany and the Netherlands aligned with the European Commission that fears disrupting markets or endangering the supply of that hydrocarbon.

The Commission arrived at the meeting in Luxembourg with a guidance document with pros and cons on a possible extension to the rest of the EU of the Iberian mechanism enjoyed by Spain and Portugal, where disadvantages seem to prevail.

There could be leakage of EU-subsidized electricity to third countries, member states with a lot of gas in electricity generation – such as Germany, the Netherlands or Italy – would hardly gain anything and could increase gas consumption, the document warns.

“It is clear that some Member States and the Commission do not believe that the ‘Iberian mechanism’ is the way forward and offers an alternative approach. But to properly assess it, we need more details, concrete legal proposals or an impact study,” Czech Industry Minister Jozsef Sikela told a news conference.

“There are those who say that very low gas prices could discourage consuming less gas. I would love to have to deal with this situation. I think the game is not over,” he added.

Next to the Czech headline, always direct in his answers and located the group of States that ask for more audacity, such as France, Spain or Portugal, appeared the European Commissioner for Energy, the Estonian Kadri Simson, who avoided controversial issues with ambiguous and open answers.

“We have shown before that we can propose legislative packages in days,” said the Estonian politician asked if the Commission would present a legal proposal, for example, to put a maximum price on gas purchases, another initiative that displeases Berlin and The Hague.

Community sources specified, already without microphones, that the idea of the Executive is not to make any new legal proposal before the 24th, that they will wait to see if in that meeting there is more consensus among the capitals and, in any case, then present those draft legislation that want a majority of capitals.

A leaders’ summit is scheduled for Dec. 15-16 before the end of the year and another Energy Ministers’ Council is scheduled for Dec. 19.

“I hope I don’t have to spoil Christmas,” the Czech minister, who has already convened four extraordinary energy councils since he began his six-month presidency of the Council of the EU, told reporters.

“Little concrete progress, yes much more precision than what we expect from the Commission,” said Spanish Vice President Teresa de Ribera as she left the council.

Meeting in November

On November 24, the capitals do expect to approve the legal measures already proposed by the Commission, the easiest for everyone, or at least part of them, to digest.

For example, the system of joint purchases of 15% of the gas reserves of the States, which should enter into force after this winter, the creation of an alternative index to the Amsterdam FTT that better reflects the growing strength of liquefied natural gas (LNG) in the EU, which is expected in April, a system to curb intraday volatility in that benchmark or a solidarity mechanism between countries if there is a shortage of gas.

Will it be the only thing that is approved and will it not be possible to validate some kind of cap on the gas prices that sow so much discord?

“Anything is possible. When we began to convene the extraordinary councils, such as the gas saving, it was said that it was an impossible mission, and it was achieved, “settled the Czech minister, who recalled that many capitals have been demanding from Brussels a legal proposal in that sense “since September 9”.

Source: The Energy Newspaper