Politics, Trade | The EU countries enter into an energy agreement without a price ceiling on gas
The EU countries are not the only ones in favor of a price cap on gas, but in return they are the only ones in favor of the European Commission putting forward a proposal for an emergency brake that can be used if there is a large price development on the TTF gas exchange.
– This is to limit price fluctuations, as the head of the European Commission, Ursula von der Leyen, said at a press conference on Friday night.
She said at the same time that the EU countries are the only ones to jointly purchase gas and share gas if there is a gas shortage in the EU.
Shortly before, EU President Charles Michel announced that an agreement had been reached, without saying what the agreement was about.
– Agreement to work with measures to keep energy prices for households and businesses under control, signed Michel Twitter night to Friday.
– Unity and solidarity have won, he wrote.
– Solid roadmap
TTF is a gas exchange in the Netherlands that sets the reference price for gas trade in the EU. According to von der Leyen, the agreement that has now been concluded must both ensure cheaper purchases and ensure security of supply in crisis situations.
At the same time, the agreement involves developing a new index to supplement the price on the TTF exchange. The EU countries realize that such an index is necessary to get more correct prices that take into account the increased use of liquefied natural gas (LNG).
– We have reached a solid roadmap for the work on the energy price, said von der Leyen.
Price dispute
EU leaders had been meeting since Thursday before settling down to Friday. A demand from a number of EU countries to introduce a price cap on gas has been at the center of the discussions.
Italia has pushed for a price ceiling, in common with several Central and Eastern European countries. But as expected, no agreement was reached on the introduction of any price ceiling.
– We had an honest discussion which on the one hand highlighted the opportunity, but also the challenges, said von der Leyen afterwards.
She thereby suggested that bitterness, aimed especially at Germany, characterized the discussions.
Central and Eastern European EU countries in particular believe that price caps on energy are the best way to lower energy bills.
Germany, the Netherlands and Denmark are among the countries that do not share this view. These three countries fear that the immediate solution in such a case will ultimately trigger an extra bill that falls on taxpayers across the EU, by having to pay for differences between the price ceiling and the market price, or by suppliers of gas simply . will sell to countries outside the EU to obtain market price.
Press to obtain result
Models also risk a situation arising where some EU country spends money to pay for the price ceiling, while the energy is sent out of the country to other EU countries or countries outside the EU, which then benefit from cheaper energy without paying .
The agreement means that the EU countries give the European Commission the right to proceed with a proposal that can intervene in the price setting on this gas exchange. Among others, professor of energy planning Brian Vad Mathiesen from Denmark has warned against this.
Danish authorities have also not wanted to follow up on such a proposal, but it has nevertheless been shared by a package that EU countries are backing in an attempt to push energy prices down.
The agreement comes at a time when many households and businesses across the EU are struggling to pay high energy bills.
Before the EU summit, there was therefore a lot of pressure on many of the EU leaders to go home with a result that can win the prize.
The next step in the process will be for the energy ministers of the EU countries to meet on Tuesday next week. The discussion must then continue on the basis of agreements from the EU summit, said der Leyen on the night of Friday.