Specifications not implementable?
EU does not seem to get the gas cap right
11/08/2022, 7:50 p.m
The EU countries want a gas price brake that does not endanger the existing supply contracts or security of supply. According to insiders, the Commission has now made it clear to the member states that nothing may come of the plan.
The EU Commission apparently sees insurmountable difficulties with a gas price cap, as the EU states have in mind. According to diplomats, the Brussels authority made this clear to the member states at a seminar. It is therefore impossible to create a gas price cap that would not at the same time affect long-term contracts or security of supply.
After much back and forth, the EU heads of state and government agreed at a summit meeting in October to instruct the EU Commission to draw up “a temporary EU framework for capping gas prices in electricity generation” and “a temporary dynamic price corridor for to propose natural gas transactions”. In view of the acute energy crisis, both should serve to lower prices.
France, Spain and Belgium had campaigned for an upper limit at the summit. A group of states around Germany, on the other hand, slowed down. As a compromise line for a possible implementation, it was finally agreed that an upper limit should not affect long-term contracts and should not lead to an increase in gas consumption. Moreover, it should not induce producers to divert supplies to other locations. According to the insiders, the commission sees it as impossible to find a cap that meets these criteria.
Chancellor Olaf Scholz was optimistic that a gas price cap would be found in the EU to counteract speculative price swings. In his view, if one could prevent the often very short price swings, this would bring a lot of calm to the market. In the EU, however, it is disputed how comprehensive a gas price cap should be.