The European Fee has unveiled a recent package deal of emergency measures to curb power costs, warning of extra “distinctive” assist to return because the bloc prepares for a “precarious” provide scenario subsequent 12 months.
The measures comprise a controversial cap on the value of gasoline traded on the EU’s principal trade for the gas, alongside measures aimed toward limiting volatility in power derivatives markets. The fee additionally desires to create a clearer construction to co-ordinate EU-wide gasoline shopping for and a template for so-called “solidarity agreements”, which permit EU international locations to supply gasoline from neighbours ought to their very own provide be minimize off.
Fee president Ursula von der Leyen informed journalists in Strasbourg that “distinctive and non permanent measures” have been nonetheless wanted to make sure safety of gasoline provides subsequent 12 months.
The bloc may now take “additional steps in the direction of an power union”, she added.
Gasoline costs surged earlier this 12 months after Russia limited flows to Europe in retaliation for sanctions imposed by the EU following its invasion of Ukraine. Costs have fallen in current months and at the moment are at ranges just like these seen within the early days of the battle in late February.
EU international locations have managed to fill gasoline storage amenities to 92 per cent of capability. However the fee is worried that, ought to Russian flows be absolutely minimize off and if storage ranges are low by spring subsequent 12 months, member states would face “a precarious scenario” the next winter.
Paolo Gentiloni, EU economic system commissioner, warned on Tuesday that the bloc was nonetheless going through “a number of crises” and that the most recent power measures “wouldn’t be the final”.
Russia was beforehand the EU’s greatest provider, piping 155bn cubic metres, — 40 per cent of the gas utilized by the bloc — in 2021.
The newest measures are up for dialogue at a summit of leaders from all 27 EU member states on Thursday and Friday, earlier than being debated in additional element by power ministers subsequent Tuesday. They’re unlikely to be formally signed off till November, nonetheless.
The institution of an emergency worth cap mechanism to limit surges in prices on the Dutch Title Switch Facility (TTF), the EU’s principal gasoline worth benchmark, follows weeks of strain on the bloc’s govt arm from member states that worry widespread social unrest this winter if power payments don’t come down.
A number of international locations consider the proposal doesn’t go far sufficient to cushion the influence of excessive power payments on households. Teresa Ribera, Spain’s power minister, mentioned the plans “nonetheless depart a sense that we aren’t appearing with the velocity and depth that’s required”.
Spain and France are amongst nations pushing for an EU-wide cap on the value of gasoline utilized in electrical energy manufacturing, a mannequin already employed in Spain and Portugal.
The TTF is historically dominated by pipeline gasoline transactions, the overwhelming majority of which beforehand got here from Russia and have since been changed by liquefied pure gasoline.
Germany has ceaselessly opposed any worth ceiling, fearing it may enhance consumption when the EU wanted to protect provides.
Pascal Canfin, a French liberal who chairs the European parliament’s atmosphere committee, mentioned a scarcity of settlement between France and Germany about how to address the crisis meant “the influence of the measures might be restricted”.
The fee mentioned use of the TTF as a foundation for the gasoline worth cap was meant as a stop-gap measure whereas it labored on a brand new benchmark based mostly on the value of LNG imports. It was nonetheless contemplating whether or not to roll out the so-called “Iberian mechanism” to the remainder of the EU if “some open questions might be satisfactorily addressed”.
A senior EU official mentioned the cap could be activated in occasions of “extreme” costs, however added that the set off level had not but been determined.
Following attacks on the Nord Stream pipelines earlier this month, Brussels additionally set out plans to beef up safety of vital infrastructure, together with extra stress testing and the institution of an EU-Nato job pressure.
The measures are the fourth emergency power package deal since Might, when the fee outlined methods to wean the EU off Russian fossil fuels. In June, targets to cut gas demand have been unveiled. In September, member states agreed windfall taxes on power producers to ease the influence of upper costs on households and companies.
Extra reporting by Barney Jopson in Madrid
