Summit in Brussels – gas price cap dispute: Gewessler expects a solution

The EU Council presidency, the Czech Republic, proposes a ceiling if the gas price is above 188 euros per megawatt hour for three days. Energy Minister Leonore Gewessler (Greens) was ready to talk: “The compromise will not fail thanks to us,” she said Monday morning. At the same time, she referred to the Austrian point of view: “We have always emphasized that the most important thing is security of supply.”

“Awaiting solutions”
Joint gas procurement and expedited renewable energy procedures are already on the table, Gewessler continued. If the EU ministers can agree on the gas price cap, the other projects must also be approved. “All these things are finished and are currently being held hostage by a lack of agreement on the market correction mechanism,” the minister stressed. She doesn’t understand this approach. “People in Europe expect solutions from us and so do I.”

“I see no reason why we should not reach an agreement today,” Czech Energy Minister Jozef Sikela said at the start of the meeting with his colleagues in Brussels. “There will be nothing stopping us from doing that.” Sikela pointed out that the heads of state and government had also demanded an agreement on Thursday. With regard to Germany, he made it clear that states can also be overruled if necessary.

Germany is concerned
Germany is still skeptical about the gas price cap: “I believe our concerns are justified,” said German Economics Minister Robert Habeck (Greens) and slowed down. “We know from previous market interventions that we have to be very careful not to want the good and bring about the bad.”

This is exactly what the Czech compromise proposal looks like: the cap should apply if the gas price is above 188 euros per megawatt hour for three days and also 35 euros above the world market price for liquefied natural gas (LNG). After the mechanism comes into effect, the price must always be 35 euros above the LNG world market price, but may not drop below 188 euros. However, if there is a gas shortage in the EU or a member state, the cap will be lifted again.

Distribution battles feared
Germany, the Netherlands and Austria fear that liquefied gas could no longer come to Europe if a cap were introduced. In the event of a shortage, distribution battles would break out between states, posing a crucial test for the EU. Chancellor Karl Nehammer (ÖVP) said last week that it is necessary “that there is enough gas available, that the supply does not become scarce and the other part is that it remains affordable”. German Chancellor Olaf Scholz had called for a price cap so high that it will never be effective. Other states, on the other hand, want the lowest possible price.

EUR 188 would be significantly less than the European Commission had proposed in the past and what Germany had rejected. The gas price is currently well below 188 euros, but the ceiling would have come into effect in the summer, when the market price had temporarily risen to 350 euros. Experts think it is possible that after a harsh winter, gas prices will rise again to above 200 euros if the states have to fill their storage facilities in the spring.

If there is a majority, new quarrels threaten
A decision by a so-called qualified majority would be possible on Monday. 15 of the 27 states would have to vote for it, representing at least 65 percent of the population. But even if the ministers reach an agreement today, that will not solve all the problems – also because, among other things, the operator of the affected trading platform TTF is threatening to move the trading platform, which is now located in the Netherlands. to other EU countries. If the mechanism is decided upon, all options should be explored, including whether an effective market in the Netherlands is still viable, operator Intercontinental Exchange (ICE) said.