‘It’s a bad joke’: Energy ministers blast proposed EU cap on gas prices

Energy ministers slammed the European Commission’s latest proposal to impose a cap on gas prices at the EU level, calling it inappropriate, unrealistic and a “bad joke” during a meeting in Brussels.

Their strong differences over the price cap delayed approval of two separate emergency regulations to address the energy crisis, where consensus had already been reached.

“It is totally unenforceable, ineffective and off scale,” Teresa Ribera, Spain’s Minister of Environmental Transformation, said Thursday morning. “It’s a bad joke.”

Her Maltese counterpart, Miriam Daly, said the cover, which was designed by the European Commission, was “not fit for purpose” and “certainly not inherently dynamic”.

“The simultaneous conditions being imposed make it unlikely or almost impossible for this corrective mechanism to be triggered,” Daly told reporters. “This is not what we asked.”

Meanwhile, the Netherlands, a country staunchly opposed to any price intervention, said the tool was “flawed” and potentially “harmful” to the EU’s supply security and financial stability.

“There is more homework to be done,” Dutch Energy Minister Rob Gettin said.

The Czech Republic, which holds the rotating presidency of the EU Council, intends to hold a discussion on a price cap and to move forward with two separate regulations: one around Joint gas purchases And a second day Allow rules faster for renewable technologies.

But a group of 15 pro-capital countries, not entirely satisfied with the European Commission’s draft, pushed for the price cap to be linked to the other two packages in order to secure adjustments in their favour.

Diplomats told Euronews that Luxembourg, Austria, Finland, Denmark, Ireland, Estonia and the Netherlands opposed the idea, but the Czech Republic accepted the compromise and will hold a new extraordinary meeting in mid-December to give the green light to the three energy regulations.

“We haven’t opened the champagne yet but we’re putting the bottle in the fridge,” said Czech Industry Minister Josef Sekela, describing Thursday’s meeting as “extremely hot”.

“We are ready to go further,” Sekela added. “There is simply too much at stake.”

The core of the dispute is the draft It was unveiled just two days ago by the European Commission.

The executive has designed the “last resort” cap that will apply to the Royal Dutch Transfer Facility (TTF), Europe’s main hub for gas trading. The platform has seen its ups and downs since Russia launched its invasion of Ukraine and disrupted global energy markets.

The suggested cover will be activated automatically but only if two main conditions are met:

  1. If TTF rates have reached or exceeded €275 per MWh for at least two weeks.
  2. If TTF prices are €58 above the market reference for LNG during at least 10 consecutive trading days.

Moreover, the Commission has introduced a series of “guarantees” that can stop the mechanism completely in the event of unforeseen and unwanted consequences, such as reduced supplies or loss of liquidity.

“We stand ready to facilitate an agreement and help address concerns,” said Kadri Simson, European Commissioner for Energy. “This is an extraordinary tool for extraordinary times.”

Simpson noted that it was up to ministers to adjust and revise the draft text but stressed that the price ceiling was not “about a single number”. It said the guarantees are needed to ensure the EU can continue to receive LNG shipments, which can be easily redirected to other regions in search of greater profits.

“It’s better to think twice and calibrate,” Simpson said.

The price range is in question

But fifteen member states Those who have spent the past months advocating for a powerful and far-reaching intervention see things differently.

For them, the conditions are so strict and specific that the cover becomes useless.

“The terms appear to be designed such that a price cap is never imposed,” Ribera said. “This proposal may raise prices rather than contain them.”

For the Ribera, the €275 mark requested by the Commission is very high and well established.

The block only passed that barrier for a few days over the summer when the fund experienced record highs. The latest fund prices ranged between €115 and €125 per MWh.

“If gas prices are €275 (per MWh) in 15 days, Europe will never recover from that economic shock,” Ribera said, pointing instead to a dynamic price range with a premium attached.

Her Greek counterpart Kostas Skrekas echoed her comments, saying that Europe pays “the most expensive natural gas in the world”.

“Setting a ceiling at 275 euros is not really a ceiling,” Skrekas told reporters. He suggested that a range between €150 and €200 should be a “realistic ceiling”.

France, Italy, Belgium and Malta also expressed criticism of the European Commission’s draft text and the strict operationalization criteria that were introduced.

Among the group of countries deemed skeptical about price intervention, sentiment was also mixed.

Dutch Energy Minister Rob Gettin said the proposal was “flawed” and carried “many risks” to supply security and financial stability. “I am very critical, but from a different point of view,” he said.

For Germany, a country whose main priority is securing as much gas as possible to compensate for the loss of Russian supplies, the proposal is heading in the “right direction” and only some “minor changes” will be needed.

“For us, it is important that safeguards are in place and that we avoid gas rationing in Europe,” said Sven Gigold, Germany’s State Minister for Economics and Climate Action.

“Gas rationing would be the wrong response for citizens and companies in such a crisis.”

Estonia, which shares similar concerns with Germany, also expressed a generally positive opinion.

“The proposal on the table is very much acceptable. But the measure should be temporary and only work for large price increases,” said Rena Sikot, Estonia’s Minister of Economic Affairs and Infrastructure.

“Security of supply is paramount. Europe still has to be an attractive market for gas. We can’t put that into question.”

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