The Commission presented this Tuesday, in Strasbourg, the proposal for a new emergency regulation to “deal with high gas prices in the EU and guarantee security of supply this winter”.
The Commission’s plan provides for “joint purchase of gas” and “price capping mechanisms” in the gas transfer markets. In addition to these measures, Brussels is moving forward with measures aimed at “solidarity between member states”. The plan also includes the need for “continued efforts to reduce gas demand.”
“We will introduce a temporary mechanism to limit excessive prices this winter, while we develop a new benchmark for LNG to be traded at a fairer price,” European Commission President Ursula von der Leyen said.
According to the head of the EU Executive, the proposed regulation “provides the legal instruments for the joint purchase of gas by the EU, guarantees solidarity in the security of supply for all Member States.
At a time when the European Union is facing an unprecedented energy crisis, von der Leyen says there are negotiations “with our reliable gas suppliers to guarantee affordable prices.”
“But we must also accelerate investment in renewable energy and infrastructure,” he defended, stressing that “investing more and faster in the transition to clean energy is the structural response [da UE] for this energy crisis”.
Joint purchase
With the “aggregation of demand and the joint purchase of gas”, the European Commission hopes that it will be possible to “negotiate better prices and reduce the risk that Member States obtain better results in the global market, while guaranteeing security of supply throughout the EU”.
Under the proposal, “the Commission would engage a service provider to organize demand aggregation across the EU, pooling gas import needs and searching for market offers that match demand.”
“We propose a compulsory participation of the companies of the Member States in the aggregation of the EU demand to meet at least 15% of its storage fill targets,” says the Commission, in a note distributed in Brussels.
“Companies would be allowed to form a European gas purchasing consortium, in accordance with EU competition rules,” advances the Commission in the same note, in which it also promises “to help smaller Member States and companies in particular, which are in a less favorable position as buyers, to access volumes of gas in better conditions”.
The ceiling
The Commission expects that “by March 2023” it will have advanced with “the work to create a new reference price for Liquefied Natural Gas (LNG)”. And in the “short term, propose a price correction mechanism to establish a dynamic limit price for transactions” in the gas markets. Other measures aim to “avoid extreme price spikes in the derivatives markets.”
In the event of a shortage, Brussels wants states to adopt “standard rules of solidarity”. The obligation of solidarity will be extended “to Member States without direct connection to gas pipelines”, which will also include “those that have LNG facilities”.
Experts from the European Commission believe that “in combination with the measures already agreed to reduce gas and electricity demand, store gas and redistribute excess profits from the energy sector, these new measures will improve stability in the European gas markets this winter. and the next.”
Brussels also hopes that these measures “will contribute to further alleviate the pressure on prices”, which affect citizens and companies, and “at the same time guarantee the security of supply and the functioning of the internal market”.
The Commission also promises to “continue work in other areas, including reviewing the Temporary State Aid Crisis Framework later this month and developing ways to limit the impact of high gas prices on electricity prices.”
Brussels promises to go ahead with an assessment of REPowerEU’s needs “to accelerate the transition to clean energy and avoid fragmentation in the single market”, in the hope of increasing the availability of funds for this purpose.
Another proposal is the “oriented flexible use of Cohesion Policy funding to deal with the impact of the current energy crisis on citizens and companies”. The Commission proposes to use “up to 10% of the total national allocation for 2014-2020, amounting to around €40 billion”.
Source: TSF
