The possibility of multiple ceilings on gas prices remains on the Summit’s table

by

What the draft conclusions of the Synod foresee – The proposals of the Commission announced yesterday will be supported

The leaders of the European Union, meeting this week, are poised to adopt the coalition’s latest proposals to lower energy prices, but are pushing Brussels to go further and put a cap on the price of gas used to generate power, according to a draft of the conclusions of their meeting.

During the EU summit, which will take place tomorrow and the day after tomorrow, October 20 and 21leaders will discuss the package of proposals put forward yesterday, Tuesday, by the European Commission to try to bring down high energy prices that are fueling inflation and the lurking threat of a recession.

A revised draft of their summit conclusions says EU leaders will broadly support the proposals – including plans for a new pricing index for liquefied natural gas (LNG) and for common gas markets from EU countries .

Each of the proposals needs support from an enhanced majority of EU countries – at least 15 members representing at least 65% of the union’s population.

In the Commission’s proposals it does not include directly imposing a cap on gas priceswhich they say most EU countries want, but it is reported that Brussels they could design another proposal to put a temporary price cap on the TTF (Title Transfer Facility) natural gas exchange.

EU leaders appear poised to back the idea, asking Brussels to consider a “temporary dynamic price corridor” in gas transactions, according to their draft conclusions.

But as many countries seek stronger action to curb prices, according to the plan, the Commission will also be asked to “propose an interim EU framework for a cap on the price of gas used to generate electricity at a level that to help reduce electricity prices”.

This idea, known as the “Iberian Mechanism” because Spain and Portugal have already introduced it, is not included in the EU proposals. Commission President Ursula von der Leyen said yesterday, Tuesday, that Brussels is still considering the idea, including how it could be financed.

EU countries are divided on the Iberian mechanism. France and others support it as a way to lower energy prices, while Germany and the Netherlands fear it will cause a surge in gas demand.

The draft conclusions state that a ceiling on the prices of gas used for energy production must not lead to an increase in gas consumption.

What is included in the draft conclusions

The European Council condemns in the strongest possible terms the recent indiscriminate Russian missile and drone strikes targeting civilians and civilian infrastructure in Kyiv and across Ukraine, the draft summit conclusions state.

At the same time, the draft conclusions condemn Russia’s actions at the Zaporizhia nuclear power plant and underline the EU’s support for the efforts of the International Atomic Energy Agency to maintain the safety and security of the facilities. Also, according to the draft, the European Council emphasizes that war crimes against Ukrainians – of which evidence is mounting – and the ongoing destruction of civilian infrastructure constitute a flagrant violation of international law, while calling on the Belarusian authorities to stop allowing the Russia’s war of aggression by allowing Russian armed forces to use Belarusian territory and provide support to the Russian military.

On Iran, the European Council condemns the unjustified and unacceptable use of force by the Iranian authorities against peaceful protesters, especially against women, and welcomes the restrictive measures adopted on 17 October 2022 against those responsible for serious human rights violations .

Regarding energy, it is stressed that the EU will remain united to protect its citizens and businesses and will take the necessary measures as a matter of urgency.

It is pointed out that the European Council calls on the Council and the Commission as a matter of urgency to proceed with the following measures taking into account different energy mixes and national circumstances, as well as to assess their impact.

According to the draft, the European Council agrees on a common gas market starting with the refilling of natural gas storage areas, but also speeding up negotiations. It also agrees to develop a supplementary index that more accurately reflects conditions in the natural gas market, while agreeing to consider a temporary dynamic corridor in natural gas trading to limit prices. In addition, a temporary European framework is proposed for a ceiling on the prices of natural gas used for the production of electricity, as well as measures to speed up the procedures related to renewable energy sources. Finally, the European Council focuses on taking measures for energy solidarity in case of disruption of natural gas flows at national, regional and EU level.

RES-EMP

You May Also Like

Recommended for you