Brussels, Nov 24 – The energy ministers of the European Union will debate today the European Commission’s proposal to limit the price of gas in the TTF futures market, in a meeting that is announced to be intense as they criticize the initiative both the countries that claim to intervene as those that did not want any proposal on the table.
The Twenty-seven debate the proposal for a price cap on gas purchases
A majority of member states have been pressing for months for Brussels to design a system to limit wholesale gas purchases in the EU, with Italy, Spain, Poland or France pushing in that direction.
But the Commission, aligned with Germany and the Netherlands, did not want to and has dragged its feet to the point that some capitals threatened to block other energy texts in which a smooth process was expected, if Brussels did not present a legislative proposal.
Finally, and facing the fourth extraordinary Energy Council since July, the European Commissioner for Energy, Kadri Simpson, has put on the table a legislative proposal to limit the exorbitant prices in the Amsterdam TTF market, which serves as a reference for most of the gas contracts in Europe.
Specifically, the mechanism proposed by Brussels as a “last resort” would limit the price of one-month gas futures in the TTF to 275 euros per megawatt-hour (MWh), but it would only be activated if that threshold is exceeded for two weeks. and provided that the difference with respect to the price of liquefied natural gas (LNG) in international markets exceeds 58 euros.
These requirements imply that, if it had been in force, it would not have been applied even during the historical record prices of last August.
In addition to these two conditions, the legislative project includes an arsenal of safeguards to suspend the cap if it endangers the security of supply or the stability of the financial markets, which makes the mechanism almost inapplicable.
The proposal has been criticized by countries that asked for a cap, such as Spain, Poland or Greece, who criticize that in practice it is inapplicable, as well as by capitals such as The Hague, which did not want the Commission to make any formal proposal.