By Kate Abnett and Jan Lopatka
BRUSSELS (Reuters) – European Union nations’ energy ministers on Monday agreed a gas price cap, after weeks of talks on the emergency measure that has split opinion across the bloc as it seeks to tame the energy crisis.
The cap is the 27-country EU’s latest attempt to lower high gas prices that have inflated citizens’ energy bills and driven record-high inflation this year after Russia cut off most of its gas deliveries to Europe.
Ministers agreed to trigger a cap if prices exceed 180 euros per megawatt hour for three days on the Dutch Title Transfer Facility (TTF) gas hub’s front-month contract, which serves as the European benchmark, EU officials and a document seen by Reuters showed.
The cap can be triggered starting from Feb. 15 2023, the document detailling the final deal showed.
Once implemented, the price cap would prevent trades being done on the front-month to front-year TTF contracts at a price more than 35 eur/MWh above a reference level based on existing liquefied natural gas (LNG) price assessments, two EU officials told Reuters.
Germany voted to support the deal, despite having raised concerns about the policy’s impact on Europe’s ability to attract gas supplies in price-competitive global markets, three EU officials said.
“Nobody in Germany is against low gas prices, but we know we have to be very careful not to wish for the good but to do bad,” German economy minister Robert Habeck said on Monday, ahead of the meeting.
Three officials said the Netherlands and Austria abstained. Both had resisted the cap during negotiations, fearing it could disrupt Europe’s energy markets and compromise Europe’s energy security.
The deal follows months of debate on the idea and two previous emergency meetings that failed to clinch an agreement among countries that disagreed on whether a price cap would help or hinder Europe’s attempts to contain the energy crisis.
Roughly 15 countries, including Belgium, Greece and Poland, had demanded a cap below 200 eur/MWh – far lower than the 275 eur/MWh limit originally proposed by the European Commission last month.
“This is about our energy future. It’s about energy security. It’s about how we have affordable prices, that we avoid de-industrialisation,” Belgian energy minister Tinne Van der Straeten said on Monday.
Initially, the cap will not apply to private gas trades outside energy exchanges, although this may be reviewed once it is in force.
(Reporting by Kate Abnett; Additional reporting by Gabriela Baczynska, Bart Meijer, Tassilo Hummel and Jan Lopatka; Editing by John Stonestreet, David Goodman, Bernadette Baum and Barbara Lewis)