The energy ministers did not reach an agreement on the gas price ceiling – New meeting in a couple of weeks

Brussels

The extraordinary meeting of the European Union’s energy ministers ended on Thursday in Brussels with meager results.

The ministers did not give their official approval to the three proposals on the table.

They concerned the acceleration of renewable energy licensing processes, the joint distribution of gas in emergency situations, and the gas price ceiling.

The ministers will meet again in an extraordinary meeting in about two weeks.

“It was seen that they [asetuksilla] is a common link, and they must be accepted in the same context”, the state secretary Ann-Mari Kemell stated after the meeting. He represented Finland at the meeting because the Minister of Economic Affairs Mika Lintilä (mid) couldn’t get there.

Before the meeting, it was estimated that the approval and solidarity regulations would be officially approved today. According to Kemelli, a political agreement was reached on the contents of the regulations, which means that they are no longer being negotiated. However, they were not yet given the final, official seal.

Director General of the Energy Department of the Ministry of Labor and the Economy Riku Huttunen implying that it was a knock to make sure all the settings were progressing.

“Everyone knows that the Germans specifically want a licensing regulation, and they don’t really like price ceiling regulations. That’s why this is being made into a package,” explained Huttunen.

We still need to negotiate more about the price ceiling

On Tuesday of this week, the European Commission gave its presentation on the gas market correction mechanism.

It is about a dynamic price ceiling, which is supposed to cut off the highest price spikes. Its activation requires the fulfillment of certain boundary conditions.

The mechanism comes into effect if the futures price of natural gas for the coming month exceeds EUR 275 per megawatt hour on the TTF exchange for two weeks. In addition to this, the difference between TTF futures and the reference price of liquefied natural gas must be at least 58 euros for more than ten consecutive days.

“This presentation was given two days ago. Of course, it still needs more negotiations. This was the first political discussion that took place about it,” State Secretary Kemell stated.

According to him, there was a consensus in the meeting hall that the commission’s proposal has the right elements and materials on the basis of which an agreement can be reached.

“We were very united about the big picture. It was concluded that in two weeks we will already have a unanimous view on the table about this presentation given just two days ago.”

According to CEO Huttunen, in its proposal, the commission had taken into account the marginal conditions set by the European Council for the price ceiling.

The EU leaders stated at their previous meeting that a price ceiling could be set for the gas used in electricity production, if it did not change the running order of the electricity exchange, increase gas consumption or affect gas flows from outside the EU.

“That’s why the price ceiling may seem a bit harsh to some,” Huttunen said.

EU Energy Commissioner Kadri Samson stated after the meeting in a press conference that it is important that the EU continues to attract LNG transports to replace the lost pipeline gas deliveries.

“Designing this show was a balancing act.”

The debate has been going on for a long time

The European Union has been struggling for months with setting a price ceiling for natural gas.

Despite numerous attempts, the member states have not been able to make a decision on the matter.

The issue divides countries into two camps. In September, fifteen EU countries signed a letter demanding the Commission to draw up a broad price ceiling for gas. The idea is that this would finally bring the high consumer prices of gas under control.

Opponents of the price ceiling, i.e. Germany, the Netherlands, Austria and Hungary are very worried about the consequences of setting a ceiling price.

The countries fear that natural gas would be diverted outside of Europe. It would be logical for gas exporting countries to sell their products to those markets where they are ready to pay a fair price for the product.

By Editor