EU countries work on gas price cap disagreement as the cold sets in

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BRUSSELS – On the threshold of winter, European Union countries have been unable to overcome bitter differences as they struggle to effectively protect 450 million citizens from massive increases in their natural gas bills as the cold weather sets in.

An emergency meeting of energy ministers Thursday just shows how the energy crisis linked to Russia’s war in Ukraine has divided the bloc of 27 countries into nearly irreconcilable blocs.

A huge spike in natural gas prices in August stunned all but the wealthiest in the EU and forced the bloc to look for a limit to contain the volatile prices fueling inflation. After several delays, energy ministers are trying to break another deadlock between countries demanding cheaper gas to lower household bills – including Greece, Spain, Belgium, France and Poland – and countries such as Germany and the Netherlands pushing for a price cap. cutting stocks.

A solution was still nowhere in sight – to the frustration of many.

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“It is already minus 10 (Celsius) in Poland,” said National Energy Minister Anna Moskwa. “It’s winter now.”

Natural gas and electricity prices have soared as Moscow cut off gas supplies to Europe for heating, electricity and industrial processes. European officials have accused Russia of energy warfare to punish EU countries for supporting Ukraine.

So striking a deal is not only about giving warmth to citizens, but also about showing a united front to Russian President Vladimir Putin.

Talks have been dragging on for months and even if a summit of EU leaders proclaimed some sort of breakthrough last month, nothing is visible on the ground. Nations had been waiting for a proposal from the European Commission, the EU’s executive arm, to set a threshold for a price cap, and when it came Tuesday there was dismay and accusations that it would never work.

The commission set a threshold for a “safety price cap” that comes into effect if prices exceed €275 per megawatt-hour for two weeks and if they are €58 higher than the price for liquefied natural gas on the world market.

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In political language, it means that such a system might not even have prevented increases as high as in August.

“Setting a ceiling at €275 is not really a ceiling,” said Greek Energy Minister Konstantinos Skrekas, who called for a ceiling that could be as low as €150.

“We lose precious time without results,” he added.

For comparison: on Thursday the price on the European TTF benchmark was 125 euros per megawatt hour. Since the price has fallen since the summer peaks, diplomats have said the urgency has eased somewhat, even though it could pick up again soon if the weather is colder than usual and supplies become tight.

About 15 countries agree on these views, but Germany and the Netherlands lead another group that wants to make sure gas supply ships don’t bypass Europe because they can get better prices elsewhere.

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“Security of supply is paramount. Europe still needs to be an attractive gas market,” said Estonian Economy Minister Riina Sikkut.

No decisive breakthrough was expected at Thursday’s meeting.

Czech Industry Minister Jozef Síkela, who chaired the emergency meeting, said he was well aware of the “emotional reactions” the committee proposal had provoked and predicted that the talks would be “rather spirited”.

Due to trade disruptions related to Russia’s war in Ukraine, EU countries have reduced the total share of Russian natural gas imports into the EU from 40% before the invasion to around 7%. And gas storage has already far exceeded its targets and is almost at its capacity.

The EU is relying on increased imports of liquefied natural gas or LNG, including from the United States, to help deal with the fall in Russian supplies.

The post EU countries work on gas price cap disagreement as cold sets came in appeared first on UK Time News.

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