Gas – Photo Naftogaz of Ukraine
(BRUSSELS) – The European Commission made additional proposals to fight high energy prices Tuesday and ensure security of supply, with a new emergency regulation to enable joint gas purchasing.
The proposed measures also introduce price limiting mechanisms on the TTF gas exchange and new measures on transparent infrastructure use as well as solidarity between Member States coupled with continuous efforts to reduce gas demand.
The EU executive says the new measures will improve stability on European gas markets this winter and beyond and also help to further mitigate the price pressure felt by European citizens and industry, while ensuring a functioning internal market.
“In crisis situations with supply shortages, joining forces to negotiate can be an effective way to achieve better prices and better conditions,” said EC vice-president Margrethe Vestager: “In the context of the current gas crisis, we stand ready to accompany firms willing to enter into a joint purchasing consortium, subject to safeguards and in line with our competition rules. Our goal is to ensure the full benefits of joint purchasing can be reaped and further passed through.”
The regulation hinges on aggregation of EU demand and joint gas purchasing to negotiate better prices and reduce the risk of Member States outbidding each other.
It also advances work to create a new LNG pricing benchmark, a framework to propose a price correction mechanism to establish a dynamic price limit for transactions on the TTF gas exchange, and a temporary collar or bandwith to prevent extreme price spikes in derivatives markets.
Default solidarity rules between Member States in case of supply shortages and a proposal to create a mechanism for gas allocation for Member States affected by a regional or Union gas supply emergency also form part of the new proposals.
In addition, the Commission says it will carry out a needs assessment on REPowerEU to speed up the clean energy transition and avoid fragmentation in the single market. It is also proposing a targeted flexible use of Cohesion Policy funding to tackle the impact of the current energy crisis on citizens and businesses.
Energy Emergency Communication – preparing, purchasing and protecting the EU together
