The EU energy ministers will meet again this Monday in Brussels to try to reach a compromise on the gas market correction mechanism, having to agree on a ‘ceiling’ for the price of imports.
After several meetings in recent weeks in which they failed to reach an understanding, the 27 are back at the table today, and this time with a clear mandate from the Heads of State and Government of the European Union to reach an a compromise, in what is the last opportunity of the year.
At the summit held in Brussels on Thursday, the leaders of the 27 urged their energy ministers to reach an agreement at today’s meeting on the gas market correction mechanism and, in particular, a ceiling on prices on the stock market to “protect citizens and the economy”.
“The European Council welcomes the progress made and invites the Council to complete its work on […] a regulation that establishes a market correction mechanism to protect citizens and the economy against excessively high prices”, stress the EU leaders, in the conclusions of the summit.
The appeal to the energy ministers came after they again failed to reach an agreement last Tuesday, due to divergent positions between the countries on maximum prices and requirements.
On the occasion, the Secretary of State for Energy, João Galamba, who will once again represent Portugal in the discussions, pointed out that “there was some progress, there was consensus on a large part of the proposal, that is, on some safeguards that were sought by some of the countries, but there was no agreement on the central issue, which is the question of the price level from which this market correction mechanism would be activated”.
The Secretary of State expressed his hope that a compromise could be reached at today’s Energy Council.
This is the temporary emergency measure proposed at the end of November by the European Commission to create a price correction mechanism in certain operations of the Securities Transfer Market in relation to natural gas, the TTF, which could be activated by high prices during several consecutive operations. days to limit excessive increases.
While countries such as Portugal, Bulgaria, Poland, Latvia, Malta, Spain, Greece, Belgium, Italy and Slovenia admitted a ceiling of between 200 and 220 euros per Megawatt-hour (MWh) for three consecutive days, proposed by the Czech presidency of the EU to make it easier to activate this correction mechanism, other countries such as Germany and the Netherlands claimed security of supply by preferring the option proposed by the European Commission, of 275 euros per MWh in 10 consecutive days, which may make its application difficult.
This “last resort measure” aims to deal with excessive price situations by establishing a maximum dynamic price at which natural gas transactions can be carried out one month in advance on the markets of the TTF, the main European natural gas exchange.
The community executive wants to move forward with this temporary price cap mechanism in the TTF while working on a new complementary benchmark, which it will present in early 2023.
At today’s meeting, European ministers will also try to give the ‘green light’ to joint gas purchases, similar to the scheme implemented for anti-Covid-19 vaccines, but which should only take place in the spring of 2023.
EU solidarity rules will also be discussed to make gas available to all member states in the event of an emergency, such as a disruption in Russian supply, ensuring that countries can access each other’s reserves, not least as only 18 of the 27 countries of the community block having storage infrastructures.
Geopolitical tensions over the war in Ukraine have affected the European energy market.
Source: TSF
