Leaders to call for ‘workable’ price cap on gas at EU summit

Leaders to call for ‘workable’ price cap on gas at EU summit

EURACTIV — 2022-10-04

News from Brussels

EU leaders are set to ask the bloc’s executive at a summit this week to come up with a proposal for capping the price of gas imports in a bid to curb prices, according to a draft statement seen Monday 3 October 2022.

The push for a price cap has divided the EU, with 15 countries demanding the move and economic powerhouse Germany heading a smaller group of member states opposed to the initiative, which comprises Austria, the Netherlands, Hungary and Denmark.

A declaration still being negotiated for the meeting in Prague on Friday 30 September, invites the European Commission to work on “proposing workable solutions to reduce prices through gas prices cap”.

The Commission has not yet proposed a cap on gas prices and raised concerns over the idea – suggesting countries instead consider narrower price caps, such as one targeting gas used for power generation only.

The proposal is one of a number of potential measures envisioned as part of “a roadmap for the months ahead,” according to the draft statement, seen by EURACTIV.

“Our efforts to ensure the security of supply and to reduce energy prices need to be continued,” says the draft statement, which also hails recent decisions to lower gas and electricity consumption in Europe.

The EU is desperately scrambling to lower runaway energy costs for consumers ahead of winter after Russia’s war on Ukraine sent prices soaring.

High gas and electricity costs fuelled by Moscow turning off the taps have helped send inflation rocketing up to 10% in the eurozone last month.

Germany has argued against capping the price of gas imports for fear of deterring much needed shipments of liquefied natural gas (LNG) from coming to the continent from the United States and elsewhere.

But Berlin has sparked ire in other EU capitals by simultaneously unleashing a €200bn plan to help German households and businesses weather the high prices.

Berlin’s using its largesse and at the same time as opposing a bloc-wide initiative on a gas cap has been criticised by other governments without the same financial muscle as Germany as a failure to show solidarity with other member states.

Comparing the external shock of the energy price crisis to the COVID-19 pandemic, EU officials are calling for a joint EU response that would help all countries deal with the problem without compromising fair competition rules.

An EU-wide agreement on a cap on gas prices, if it gets enough backing, could be one such joint response.

But while the EU searches for more bloc-wide measures, some, like Germany, are pushing ahead with national measures.

“Without a common European solution, we seriously risk fragmentation,” Commission President Ursula von der Leyen said on Saturday.

Other priorities listed in the draft EU summit statement include “speeding up negotiations” with foreign countries for additional gas supplies, “developing a more representative benchmark for LNG” that better reflects current market conditions and speeding up work to “limit price volatility” on financial markets.

In addition, the statement calls on EU countries to start preparing now for the next gas storage filling season after the coming winter. “Pooling our demand through the EU Energy Platform will allow making full use of the Union’s collective political and market weight,” the statement says.