European Union energy ministers locked horns on Thursday over a proposal to cap gas prices at 275 euros per megawatt hour (MWh), with Greece, Poland, Belgium, Germany and the Netherlands equally unhappy – but for opposite reasons.
The long-standing disagreement risked holding hostage other proposals to alleviate the acute energy crisis awaiting the ministers’ approval: launching joint EU gas purchases and speeding up permitting for renewables.
Poland’s Climate Minister Anna Moskwa called the plan “a joke” after the bloc’s executive European Commission put forward its cap proposal for the bloc’s 27 member countries to approve.
Belgium’s Energy Minister Tinne Van der Straeten chimed in.
“The text that is on the table is unsatisfactory (…) it doesn’t clearly say if it will have an effect on prices,” he told reporters.
Their Greek colleague said a cap of 150-200 euros/MWh would be “realistic”.
“It could help us reduce gas prices and therefore reduce electricity prices, which is a major challenge in Europe this winter,” said Konstantinos Skrekas.
Malta was also unhappy with such a ceiling, with its energy minister, Miriam Dalli saying the strict conditions needed for the mechanism to kick in made it “next to impossible”.
As many as 15 EU states want a set limit to contain energy costs after gas prices soared to record highs last August with Russia cutting supplies to Europe following Western sanctions over Moscow’s war against Ukraine.
But fierce opposition comes from a smaller but powerful camp led by the EU’s biggest economy Germany. Together with the Netherlands, Sweden, Austria and Finland, they say a cap could shift supply elsewhere and cut incentives to lower consumption.
The Commission proposed to limit the front-month price on the Dutch gas exchange Title Transfer Facility (TTF) if it exceeds 275 euros/MWh for two weeks and if the price is more than 58 euros higher from a liquefied natural gas (LNG) global reference for 10 consecutive trading days.
Dutch minister Rob Jetten said he was “very critical” of the plan: “The proposal is flawed, there is a lot of risk for damaging the energy security of supply, and also for stability of the financial markets.”
German state secretary for climate, Sven Giegold, added: “We still have a lot of work to do.”
The Estonian minister was the only to say the plan was “OK, pretty much” as a temporary measure and only to address extreme price hikes rather than a permanent solution.
But two EU diplomats and an EU official said the ministers were likely to need to meet again mid-December to get a deal.
The EU has approved a raft of measures to mitigate the crisis in recent months from consumption savings to new taxes to claw back windfall profits from energy producers. But the issue of how and whether to cap gas prices has long divided the bloc.
Ukraine’s energy minister was also due to dial in, another EU diplomat said, to discuss support for his country where the Russian war destroyed civilian infrastructure and incapacitated power and heating systems as winter cold sets in.