EU is 'close to the solution' on gas price cap

"We are close to the solution," said Spanish prime minister Pedro Sánchez on Friday (21 October) after the summit meeting in Brussels.

Spain, together with France, Italy, and Belgium, are among the 15 EU countries calling for an EU-wide price cap on gas — but Germany and the Netherlands fear such a market intervention could put their security of supply at risk.

"There are some risks which will have to be mapped out," Rutte said. "Companies that have already bought gas for a higher price could be disadvantaged. And it could scare away suppliers who want the full price — while we would only be prepared to pay 80 percent".

Rutte also said imported liquified natural gas could go to other countries with no price caps, such as China. Suppliers in Norway could also decide not to sell for a lower price than the market price, he warned.

In their summit conclusions, leaders called on energy ministers and the EU commission to "submit concrete decisions" on a "temporary dynamic price corridor on natural gas transactions" that would limit price spikes, and a price cap on gas used to generate electricity, including an impact assessment on the so-called Iberian model.

In Europe, the "Iberian model" is a reference to intervening in the markets, said Sánchez, adding that Spanish households have saved over €2.9bn thanks to this cap on gas used for electricity generation.

While Germany has been slammed for blocking a potential deal over price caps, Sanchez said that chancellor Olaf Scholz has had a "leadership role" and a "constructive" attitude during the negotiations.

And others echoed the same message of common understanding.

"Nobody was blocking just for blocking, some countries just have concerns about the security of supply and we share those concerns. If some countries don't get the gas they need that's a problem for all of us," said Belgian prime minister Alexander de Croo, referring to the long talks over energy on Thursday.

"A solution is possible," he added.

EU energy minister will meet on Tuesday (25 October) to discuss details in a bid to reach an agreement over emergency measures to tackle the energy crisis. However, they might only reach an agreement later in November during an extraordinary meeting being prepared by the Czech Republic, which currently holds the EU Council presidency,

Joint purchasing

EU leaders also agreed on Thursday to advance work to voluntarily buy gas together through a joint platform before next winter.

The European Commission together with market players will now set up a purchasing platform to "locate supply and match it to demand instead of everybody buying gas individually," Rutte said. "This will mute gas prices and I hope it will enthuse others to join and use the platform."

The goal of this mechanism is to fill EU gas storages by at least 15 percent, which is around 10 billion cubic meters of gas.

"I think the market has responded positively," Rutte said, referring to gas prices which dropped to a multi-month low. "I think there is less scepsis about the prospect of EU countries working together."

"Prices are still too high but it shows this is the right way to address them," EU Commission president Ursula von der Leyen also said.