Energy ministers fail to agree on EU gas price cap, aim for deal on 19 December

EU energy ministers failed to reach agreement on Tuesday (13 December) on a new cap to limit excessive gas prices, further delaying other emergency measures to tackle the energy crisis, like speeding up the rollout of renewables and strengthening solidarity between EU countries.

EU member states are divided on the price cap proposal, with Germany concerned it will jeopardise its energy security and others pushing for a low, broad cap to protect against high prices.

The failure to agree on the gas price cap also means that other emergency measures on renewables and solidarity around gas supplies remain in limbo, as some countries consider those to be part of the same package.

While ministers agreed on some elements of the cap at their meeting on Tuesday, the core question of when to trigger the mechanism proved a stumbling block.

“Where we need more time to get things right is on the triggering thresholds and the numbers. Despite the skillful efforts of the presidency, there are still different views on this aspect of the proposal,” said Kadri Simson, the EU’s energy commissioner.

The lack of agreement comes as a blow to Czechia, which currently holds the EU’s six-month rotating presidency and had hoped to reach a compromise among the 27 EU member states.

Ahead of the meeting, Czech industry and trade minister Josef Síkela told journalists that failure to reach an agreement would carry a reputational risk for the EU. “So far we were able to show unity and solidarity and I believe we are strongly asked to continue with this approach,” he commented.

It is hoped the final details will be agreed at the next meeting of EU energy ministers on Monday (19 December), unlocking the other emergency measures and allowing the implementation of the cap.

Emergency measures for energy crisis in limbo after pressure for price cap

New measures to tackle the energy crisis, including speeding up permits for renewables and boosting solidarity between EU countries, have been left in limbo following a push to link them to a controversial price cap for gas.

Some aspects agreed

Talks seemed to be going well on Tuesday morning, but began to worsen as the day wore on with some ministers expressing the need to consult their governments before they signed up to a deal.

“Some ministers needed this additional time to return to the capitals and also discuss the changes with their colleagues, especially finance ministers because this market correction mechanism will have implications on the financial markets and, in a legal way, it is wise to discuss also all those implications,” explained Simson.

Despite this delay, some aspects have been agreed. According to French minister Agnès Pannier-Runacher, “more than 90% of the text is stabilised”, with only a limited number of points to be closed at the next Energy Council meeting on 19 December.

According to Síkela, ministers agreed not to include over-the-counter contracts in the scope of the cap, in order to allow other regional gas trading hubs to opt in. They also agreed to review the positive and negative impacts of the measure by the end of February and to strengthen the deactivation mechanism in case of negative consequences.

All of these points will appear in the next draft. But while Síkela assured journalists he did not plan to reopen already-agreed issues, he added: “I cannot ensure that anyone will not try to reopen.”

Level of cap undecided

Ministers are yet to agree on the triggering mechanism, with some countries pushing for capping prices at €160/MWh and others at €220/MWh, according to an EU diplomat.

Belgium, Italy, Poland and Greece have been leading the call for a lower and broader cap. Ahead of the meeting, Greek minister energy minister Konstantinos Skrekas expressed his frustration at the slow progress, telling journalists that “the time for consultation has run out”.

“European citizens are in agony and European businesses are closing and Europe has been needlessly debating,” he said.

Other EU countries, like the Netherlands and Germany, are still reluctant about the cap, pointing to the need of protecting energy security and the good functioning of financial markets.

Ahead of the meeting, Vienna was pushing for the EU to at least adopt the measures on renewables and solidarity around gas supplies, which are being “held hostage” according to Austrian minister Leonore Gewessler.

“There are regulations on the table where we know we can have an impact on prices in Europe” she said, adding: “We cannot leave today with empty hands.”

Meanwhile, France’s Pannier-Runacher said her country “will be in this position of mediator” trying to find a compromise with the overarching aim of securing affordable energy for European households and businesses.

EU countries consider lowering gas price cap to €220/MWh

EU countries want to ease conditions for a proposed gas price cap to be triggered following criticism that the European Commission’s model was too strict, according to a leaked draft, seen by EURACTIV.

Renewables and gas solidarity held “hostage”

At the press conference, Síkela explained that all three pieces of legislation – the gas price cap, the measures on solidarity around gas and measures to speed up the permitting of renewable energies – would be adopted as a package on Monday.

But this approach has faced criticism. The price cap “is supposed to be a correction mechanism during excessive times” but other parts of the package “are kept hostage,” one diplomat said, adding: “I can understand why people are frustrated”.

The renewable energy industry is also calling for the EU to push on with the adoption of the emergency measures.

“Europe is in crisis. To keep the lights on, the IEA tells us we need 60 GW of solar by next winter. We must move from discussion to action as soon as possible,” said Walburga Hemetsberger, CEO of trade association SolarPower Europe.

Meanwhile, a spokesperson for WindEurope told EURACTIV: “If the EU Energy Ministers are really serious about energy security, they cannot afford any more delays in implementing these crucial measures.”

Friends of the Earth, an environmental NGO, is also calling for more protections for EU citizens, including support for energy efficiency renovation and a ban on disconnections to ensure no one has to live without heating this year.

Despite political rhetoric on energy security, EU member states keep trying to water down key legislation that could bring energy prices down for households, like the energy performance of buildings directive, said Colin Roche from Friends of the Earth.

Brussels tables emergency EU permitting rules for renewables

The European Commission on Wednesday (10 November) tabled temporary emergency rules to accelerate the deployment of renewable energies like wind and solar, saying the ongoing energy crisis fuelled by Russia’s war in Ukraine calls for exceptional measures.

[Edited by Frédéric Simon]

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