London Daily

Focus on the big picture.
Monday, Jun 02, 2025

EU countries still split by ‘different views’ on gas cap

EU countries still split by ‘different views’ on gas cap

The first-ever EU cap on gas prices still has a long way to go.
The 27 countries are split by “different views” around the unprecedented proposal, which aims to set a maximum price on the daily transactions taking place in the gas market.

The cap will apply to the Dutch Title Transfer Facility (TTF), Europe’s leading trading hub, and other similar venues, and will act as an emergency ceiling to prevent cases of extreme speculation and volatility.

The actual price range is yet to be defined.

“Here, as you can imagine, we have rather different views on the [TTF] mechanism,” said Czech Energy Minister Jozef Síkela said on Tuesday at the end of a meeting of energy ministers in Luxembourg.

Síkela did not mention countries by name but it is understood that some states, like Germany, Austria, Hungary and the Netherlands, are reluctant to cap gas prices at EU level while others, like Belgium, Greece, Poland and Italy, support an even broader cap that would also encompass gas imports.

“The main question is how to make sure that capping will still allow us to buy the gas we need on the market,” Síkela said, whose country currently holds the rotating presidency of the EU Council.

Kadri Simson, European Commissioner for energy, said the TTF limit could be used “immediately” once countries endorse the proposal, which is still in the works.

“As we develop this short-term tool, we must ensure security of supply and avoid an increase in gas consumption,” Simson told reporters.

The price cap is part of a new package of extraordinary measures to address the energy crisis, which also features joint purchases of gas supplies and automatic solidarity rules to cope with shortages.

The package was discussed by EU leaders during a summit in Brussels last week and then sent back to energy ministers to debate the technical details.

Síkela said ministers “widely supported” the idea of joint procurement and “welcomed” the solidarity rules but they raised questions and expressed concerns regarding the price cap.

“We have to introduce measures that will please, if possible, all member states,” he said.

As officials gathered in Luxembourg, Europe’s gas prices continued to decrease. Trading fell below €100 per megawatt-hour for the first time since mid-June.

Asked if this downward trend could dampen the momentum around the gas cap, Síkela said “the game is not over” as there is still uncertainty over the upcoming winter season.

“Because the game is not over we need to have an emergency measure, regardless of where we are in the [price] curve,” the Czech minister said, referring to the TTF mechanism.

An extraordinary meeting will be convened on Nov. 24 with the aim of approving the new package.

Another point of contention during the ministerial meeting was the possibility of extending the so-called Iberian model to the entire European Union.

The model, introduced this year by Spain and Portugal, is a state aid program that partially covers the high price of gas used to produce electricity.

The subsidy is given to gas-fired power plants and compensates for the difference between the real market price and the capped price. This results in lower bills for consumers and companies.

The European Commission believes applying this system to the whole EU would bring about €13 billion in net benefits but warns of significant hurdles and “political challenges” to make it happen.

Under the subsidy, gas demand could increase between 5 and 9 billion cubic meters (bcm), the Commission said in its latest non-paper.

Cheap electricity could leak outside the EU and enter the UK and Switzerland, two countries deeply interconnected with their neighbors.

As a state aid program, the Iberian exception is poised to entail high costs for countries that rely very heavily on gas-fired power plants, such as Germany, the Netherlands and Italy.

Eastern, Nordic and Baltic countries might also enjoy fewer benefits from the measure, given their disparate energy mixes. Meanwhile, France would be the “biggest net beneficiary,” the executive estimated.

Additionally, an EU-wide subsidy program would require the creation of a new system to redistribute costs among the countries according to the benefits it offers.

“It’s up to member states if they will find a solution, especially on how to address flows to third countries or how to agree on the cost-sharing principles,” Commissioner Simson said, in response to a question from Euronews.

However, given the myriad of obstacles presented in the non-paper, it’s still unclear when the executive will be able to table a legislative proposal.

The text, if ever unveiled, is expected to be subject to intense and prolonged negotiations among the 27 states.

In the non-paper, the Commission offers an alternative avenue: a new type of long-term contract that would apply only to renewables and nuclear plants in order to prevent the contagion effect from gas prices.

These so-called “contracts for difference” are already being used in the UK to address the energy crisis.
Newsletter

Related Articles

0:00
0:00
Close
Ukraine Executes Long-Range Drone Strikes on Russian Airbases
Conservative Karol Nawrocki wins Poland’s presidential election
Study Identifies Potential Radicalization Risk Among Over One Million Muslims in Germany
Good news: Annalena Baerbock Elected President of the UN General Assembly
Apple Appeals EU Law Over User Data Sharing Requirements
South Africa: "First Black Bank" Collapses after Being Looted by Owners
Poland will now withdraw from the EU migration pact after pro-Trump nationalist wins Election
"That's Disgusting, Don’t Say It Again": The Trump Joke That Made the President Boil
Trump Cancels NASA Nominee Over Democratic Donations
Paris Saint-Germain's Greatest Triumph Is Football’s Lowest Point
OnlyFans for Sale: From Lockdown Lifeline to Eight-Billion-Dollar Empire
Mayor’s Security Officer Implicated | Shocking New Details Emerge in NYC Kidnapping Case
Hegseth Warns of Potential Chinese Military Action Against Taiwan
OPEC+ Agrees to Increase Oil Output for Third Consecutive Month
Jamie Dimon Warns U.S. Bond Market Faces Pressure from Rising Debt
Turkey Detains Istanbul Officials Amid Anti-Corruption Crackdown
Taylor Swift Gains Ownership of Her First Six Albums
Bangkok Ranked World's Top City for Remote Work in 2025
Satirical Sketch Sparks Political Spouse Feud in South Korea
Indonesia Quarry Collapse Leaves Multiple Dead and Missing
South Korean Election Video Pulled Amid Misogyny Outcry
Asian Economies Shift Away from US Dollar Amid Trade Tensions
Netflix Investigates Allegations of On-Set Mistreatment in K-Drama Production
US Defence Chief Reaffirms Strong Ties with Singapore Amid Regional Tensions
Vietnam Faces Strategic Dilemma Over China's Mekong River Projects
Malaysia's First AI Preacher Sparks Debate on Islamic Principles
White House Press Secretary Criticizes Harvard Funding, Advocates for Vocational Training
France to Implement Nationwide Smoking Ban in Outdoor Spaces Frequented by Children
Meta and Anduril Collaborate on AI-Driven Military Augmented Reality Systems
Russia's Fossil Fuel Revenues Approach €900 Billion Since Ukraine Invasion
U.S. Justice Department Reduces American Bar Association's Role in Judicial Nominations
U.S. Department of Energy Unveils 'Doudna' Supercomputer to Advance AI Research
U.S. SEC Dismisses Lawsuit Against Binance Amid Regulatory Shift
Alcohol Industry Faces Increased Scrutiny Amid Health Concerns
Italy Faces Population Decline Amid Youth Emigration
U.S. Goods Imports Plunge Nearly 20% Amid Tariff Disruptions
OpenAI Faces Competition from Cheaper AI Rivals
Foreign Tax Provision in U.S. Budget Bill Alarms Investors
Trump Accuses China of Violating Trade Agreement
Gerry Adams Wins Libel Case Against BBC
Russia Accuses Serbia of Supplying Arms to Ukraine
EU Central Bank Pushes to Replace US Dollar with Euro as World’s Main Currency
Chinese Woman Dies After Being Forced to Visit Bank Despite Critical Illness
President Trump Grants Full Pardons to Reality TV Stars Todd and Julie Chrisley
Texas Enacts App Store Accountability Act Mandating Age Verification
U.S. Health Secretary Ends Select COVID-19 Vaccine Recommendations
Vatican Calls for Sustainable Tourism in 2025 Message
Trump Warns Putin Is 'Playing with Fire' Amid Escalating Ukraine Conflict
India and Pakistan Engage Trump-Linked Lobbyists to Influence U.S. Policy
U.S. Halts New Student Visa Interviews Amid Enhanced Security Measures
×