Brussels faces revolt against energy crisis plan unless it revises gas cap

Brussels faces revolt against energy crisis plan unless it revises gas cap

EU energy ministers are due to gather for another emergency meeting next month after several member states threatened to block broader measures against the energy crisis unless Brussels revises a capping plan gas prices which ministers have described as inefficient.

The Czech Republic, which holds the rotating EU presidency, called a Council meeting on December 13 to push through plans for joint gas purchases and emergency gas supply sharing before Christmas, two people say briefed on discussions at an emergency meeting of energy ministers. Thursday in Brussels.

The decision was taken after a group of EU countries, including Belgium and Spain, said they would veto all proposals unless a gas price cap could be achieved. be agreed. The group is large enough to create a blocking minority under EU voting rules.

An EU diplomat briefed on Thursday’s talks said ministers had reached agreement on the broader package of energy proposals, but added that it could not be formally approved “until everything is not agreed”. The aim of the additional meeting is to try to reach an agreement on the gas price cap mechanism before the summit of European leaders on December 15, although how to achieve this is not yet clear.

Discussions over how and whether to introduce a limit on gas prices have become increasingly heated in recent weeks, with divisions emerging between countries that want to impose a strict limit on all gas transactions in wholesale and others, such as Germany and the Netherlands, who have said this threatens the security of gas supplies arriving in the bloc.

The European Commission on Tuesday proposed a cap on gas prices of €275 per megawatt-hour, but the plan has been criticized by ministers and analysts who said it would not have applied even when prices hit historic highs in August. Wholesale gas prices hit record highs above €300/MWh – the equivalent of more than $500 a barrel in oil terms – over the summer after Russia cut supplies via its largest route to Western Europe, the Nord Stream 1 line to Germany.

As winter turns cold, EU capitals fear using gas that has been stockpiled partly with the intention of having a buffer next year when supplies from Russia could be completely cut off .

Agnès Pannier-Runacher, France’s energy minister, said upon arriving at Thursday’s meeting that Europe’s energy market needed “structural” reform if European industry was to survive the current crisis. , arguing that Brussels’ attempt to cap gas prices was “not good enough”.

Ministers fear massive deindustrialisation in Europe as companies struggle to cope with high energy bills compared to more favorable prices in the United States, which recently announced a huge subsidy package.

Ms Pannier-Runacher said the committee’s proposal was “certainly not a structural reform or a response to the high gas prices that European industry is facing and which is putting our economies at risk. It is not a sufficient text”.

Anna Moskwa, Poland’s climate and environment minister, described it as “a kind of joke” and said talks on further measures to ease energy prices should be postponed until that a ceiling be agreed. “It’s winter. We have to discuss the gas price cap,” she said on Thursday.

The cap would only be triggered if one-month contract prices on the Dutch benchmark TTF futures market exceeded this level for two consecutive weeks and the price was €58 above liquefied natural gas for 10 consecutive days.

Additional reporting by Leila Abboud

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