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Europe fails to give details on gas price cap

EU energy ministers fail to agree on a cap for natural gas prices. New emergency meeting scheduled for mid-December.

Kenzo Tribouillard | AFP | Getty Images

BRUSSELS – EU energy ministers have failed to reach a compromise on natural gas price caps after “stormy”, “ugly” and “difficult” talks.

The 27 EU leaders agreed in late October to give their political backing to limiting natural gas prices after months and months of talks about how best to tackle the current energy crisis.

The European Commission, the executive arm of the EU, and the bloc’s energy ministers were then tasked with resolving their more specific and practical differences over the measure.

However, the differences are so sharp in Brussels this week that the energy ministers failed to find a compromise and instead called a new emergency meeting for mid-December.

“The tension was palpable,” an EU official, who followed the talks but preferred to remain anonymous due to the sensitive nature of the talks, told CNBC by phone. The same official said conversations were “very difficult” due to a “false price cap”.

In an attempt to get everyone on board, the European Commission has proposed a ceiling of 275 euros per megawatt hour. The cap would also only come into effect when prices are 58 euros ($60.46) above the global LNG (liquefied natural gas) benchmark price for 10 consecutive trading days over a two-week period.

Countries keen to implement the cap, including Poland, Spain and Greece, say the proposal is unrealistic because it is so high it is unlikely to ever be triggered.

“The gas price cap that appears in the document does not currently satisfy any country. It is a kind of joke for us,” said Anna Moskwa, Polish climate minister, in Brussels on Thursday.

Other EU officials, speaking to CNBC on condition of anonymity, mentioned how “heated” the conversations were. One went so far as to say that “at some point it got really ugly”.

This reflects the sentiment of the poorest and most indebted European countries about the energy crisis that has plagued the region since Russia invaded Ukraine in February. With less fiscal space to support domestic consumers, these countries need EU-wide measures to contain energy costs at home.

“I hope we get there next week,” another official told CNBC after the meeting on condition of anonymity.

Speaking at a press conference on Thursday, Jozef Sikela, the Czech Minister of Industry and Trade, also said: “We are not opening the champagne yet, but putting the bottle in the fridge.”

We don't have many months, says Malta's energy minister on gas price cap

Energy ministers are due to meet again on December 13, just before heads of state gather in Brussels for their last EU summit of the year. In the meantime, the commission’s proposal is likely to undergo modifications in the hope of rallying everyone.

Prices for Europe’s benchmark Title Transfer Facility (TTF) index for the first month closed Thursday at around 129 euros per megawatt-hour. They had reached a historic peak in August at nearly 250 euros per megawatt hour.


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