The EU is proposing to cap “excessive and volatile” gas prices this winter.energy industry

The EU has proposed capping “excessive and volatile” gas prices this winter as part of a package to protect consumers.

Brussels put forward a new mechanism to control prices by blocking trades above a certain level that can be triggered “when needed”.

European policymakers are trying to shield households from the worst effects of Russia’s invasion of Ukraine, which has sent wholesale gas prices skyrocketing.

The package of measures agreed by the EU Commission on Sunday and announced on Tuesday includes emergency regulations to allow joint gas purchases across the EU, allowing better prices to be negotiated and increasing gas supplies. It includes provisions to enable greater cooperation between countries in emergency situations.

EU leaders will discuss the proposal at a summit this week, and if approved, the cap could come into force this winter.

of European Commission We have devised a plan to create a new benchmark for gas prices to better reflect liquefied natural gas prices and decouple prices from the Dutch gas hub of the Title Transfer Facility (TTF), Europe’s leading gas exchange. .

However, the implementation of this scheme is expected to take time, and an option to cap the price will be introduced in the meantime. At a price higher than the “dynamic price limit” he blocks trades from being made on the TTF.

Gas is trading more than 200% higher on the TTF exchange than at this time last year after Russia cut gas supplies to Europe in response to sanctions against the Kremlin.

Commission also proposes to support energy traders who may be exposed to price volatility Assistance devised by the UK Treasury and the Bank of England.

Commission Chairman Ursula von der Leyen said: We have acted collectively, filled our gas storage, conserved energy, found new suppliers and are well prepared for the coming winter. can work on

“This winter we will introduce a temporary mechanism to limit excessive prices and develop new benchmarks to ensure that LNG is traded at a fairer price. provide legal tools to ensure solidarity in the security of supply to all Member States and negotiate with trusted gas suppliers to ensure affordable gas.”

She added that investment in renewable energy and infrastructure must be accelerated.

Margrethe Vestager, Executive Vice President, Competition Policy, said: rule. Our goal is to help you get the most out of the benefits of group buying and get even more out of it. ”

Countries such as Germany and the Netherlands have warned that price caps could backfire if EU countries become unable to attract supply in competition with other global markets. Member States are concerned that high prices could lead to social unrest.

The move comes amid heightened concerns over gas shortages and prices this winter. european countries They are racing to prevent power shortages this winter and limit power consumption by businesses and consumers. The Commission hopes countries will follow suit on efforts to reduce gas consumption by 15% each month through March, achieved in August and September.

German states are Pay your monthly gas bill for December this year For all homes and small businesses.

Saad al-Kaabi, chief executive of state-owned QatarEnergy, said on Tuesday that Qatar will not divert gas contracted to Asian buyers to Europe this winter.