There was agreement on many points, but the 27 EU energy ministers could not agree on the most important detail on Tuesday: the level of the planned gas price cap for Europe. The politicians had been conferring in Brussels until late in the evening. Economics Minister Robert Habeck of the Greens had traveled from Berlin; Afterwards he spoke of a “tiring day with great progress, but not yet the final breakthrough”. At their next meeting next Monday, the ministers want to make another attempt to pass the controversial EU law.
Before that, their superiors, the heads of state and government, could discuss the controversial issue – at the EU summit this Thursday in Brussels. However, Czech Minister Jozef Síkela said on Tuesday evening that none of his 26 counterparts had asked for the summit to deal with it. Síkela chaired the meeting of energy ministers. The Czech Republic will hold the rotating Council Presidency until New Year’s Eve, meaning it will conduct business in the Council of Ministers, the body of EU governments.
Síkela thus does not have the thankless task of trying to find compromises between lid fans and skeptics in the EU. The skeptics include the German and Dutch governments as well as the EU Commission. These admonishers warn that tough market interventions could jeopardize the gas supply. An artificially reduced price could fuel demand; at the same time, producing countries might prefer to send their LNG tankers to other continents that pay more.
After much hesitation, the Commission only presented the draft law for a price limit three weeks ago. This should not start with the consumers, but with the gas suppliers and traders. You may not purchase gas at a price above the government cap. However, the Brussels authorities designed this so-called market correction mechanism so carefully that it would only be activated in extremely exceptional cases. Even a situation like the one in August, when prices briefly jumped to 350 euros per megawatt hour, would not be enough. Since then, the price has fallen again and has been below 150 euros for almost two months.
Lid fans think the Commission’s proposal is a bad joke
However, the majority of countries, including Italy and Poland, require a really effective cap to keep energy costs in check. These governments saw the Commission’s proposal as a bad joke – and they therefore want to tighten up the bill before it is passed: to the dismay of skeptics like the German Minister Habeck.
The dispute also blocks the adoption of actually undisputed plans to lower gas prices. In the coming year, the member states are to jointly order part of the gas for their storage facilities. This is to prevent countries from outbidding each other and driving up prices, as happened last summer. In addition, approval procedures for solar roofs, heat pumps and the modernization of wind farms are to be drastically shortened. That would reduce gas consumption. The cap fans among the governments only want to approve these initiatives if the price cap gets more bite.
In a compromise proposal on the price limit that was distributed before the ministerial meeting and the Süddeutsche Zeitung is available, session leader Síkela clearly accommodates the cover fans. The upper limit would be set at 200 to 220 euros per megawatt hour and not at 275 euros, as suggested by the Commission. After the conference, the Czech said the ministers had “in principle” agreed on the design of the limit. And to reassure the skeptics, the rules leading to an automatic shutdown of the lid should it cause problems have been strengthened. For the meeting on Monday there is “only one open point: the price level,” he announced.
Normally, a so-called qualified majority would be enough to pass the cap law. That corresponds to about a two-thirds threshold. However, at the EU summit in October, the heads of state and government informally agreed to seek unanimity. However, if that is not in sight, the supporters of the lid could push for a majority decision at the ministerial meeting on Monday. The skeptics surrounding Germany could then be overruled. Habeck said he would prefer a consensus solution. But it could “probably happen” that the law will be approved on Monday “if necessary via a majority decision”.