Wednesday

7th Dec 2022

The EU gas cap: will the bottle ever be 'uncorked'?

  • No agreement was reached on a gas cap (Photo: State Emergency Service of Ukraine)
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EU energy ministers entered a council meeting disgruntled on Thursday (24 November), where they were scheduled to discuss a widely derided EU Commission proposal to cap the gas price at €275 per megawatt-hour.

The plan had been criticised by experts and politicians alike, who pointed out the ceiling was put at such a high level it was unlikely ever to apply. Both the Spanish and the Polish energy ministers already described the cap as a "joke" in media ahead of the meeting.

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"I expect the discussion will be rather spicy," Czech industry minister Jozef Síkela whose country currently holds the rotating EU presidency, said at arrival. "First, we had a problem because the commission could not put a proposal on the table. Now we have a problem because it did."

But disgruntlement turned into farce when Síkela told journalists that, although the "bottle of champagne" was not yet open, it had been "put in the fridge" suggesting a deal was forthcoming. But with little evidence of compromise between member states, some questioned if the bottle would ever be "uncorked."

"We will see," Síkela said. Also responding to criticism, EU energy commissioner Kadri Simson said the gas cap proposal had been a "balancing act," referring to the deep divide between countries supporting a price limit and those against it.

A large group of 15 member states had tasked the commission to devise a plan to limit the price of gas. But the Netherlands, Germany, Sweden and Denmark have all strongly resisted agreeing to a price ceiling, warning it would disrupt the gas market and may even turn away overseas suppliers.

"The plan is flawed," Dutch energy minister Rob Jette said at arrival. "I have a lot of doubts about the proposal, and much has to be ironed out."

Much of the criticism was directed at the commission. But some analysts suggested the EU should forget about a price ceiling altogether.

"The problem is not the commission, but member states that keep pushing for something that can simply not be delivered," Simone Tagliapietra, energy analyst at Bruegel, a Brussels-based think tank, tweeted.

Instead, countries should try to alleviate the "distributional effects", he added.

Lion Hirth, professor of energy policy at the Berlin-based Hertie School, likewise told EUobserver previously that governments should focus their attention and resources on directly protecting households and businesses.

Energy ministers will meet again on 13 December.

Norway rejects EU price cap proposal

Norway opposes the EU proposal to set a dynamic price ceiling for natural gas transactions, instead strongly advocating for commercial agreements to tackle the energy crisis, the country's minister of oil and energy Terje Aasland said.

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

The outcome of the two-day meeting of EU leaders did not deliver any clear agreement on whether and how to limit gas prices — but some believe EU ministers will agree on emergency measures in the coming weeks.

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