Malta is one of four nations, together with Greece, Poland and Belgium who are reported to have dismissed a proposal to cap gas prices at 275 euros per megawatt hour (MWh) as the bloc’s 27 energy ministers met on Thursday to discuss more ways to bring down energy costs.
The ministers are set to lock horns over the long-awaited proposal by the bloc’s executive European Commission, which upset both the proponents of a decisive market intervention and those fiercely against it.
Poland’s Climate Minister Anna Moskwa said the plan was “a joke” and was not acceptable as the proposed price was way above the market at the moment.
“The text that is on the table is unsatisfactory (…) it doesn’t clearly say if it will have an effect on prices,” Belgium’s Energy Minister Tinne Van der Straeten said arriving at the talks.
Their Greek colleague said a cap of 150-200 euros/MWh was “realistic”.
“It could help us reduce gas prices and therefore reduce electricity prices, which is a major challenge in Europe this winter,” said Konstantinos Skrekas.
Malta was also unhappy with the proposed price ceiling, with its energy and environment minister Miriam Dalli saying the strict conditions needed for the mechanism to kick in made it “next to impossible”.
There are as many as 15 EU countries demanding a set limit to contain energy costs after gas prices soared to record highs last August with Russia cutting supplies to Europe following Western sanctions over Moscow’s war against Ukraine.
The opposition comes from a smaller but powerful camp led by the EU’s biggest economy Germany. Together with the Netherlands, Sweden, Austria and Finland, they say a cap could shift supply elsewhere and cut incentives to bring down gas consumption.
The Commission proposed to limit the front-month price on the Dutch gas exchange Title Transfer Facility (TTF) if it exceeds 275 euros/MWh for two weeks and if, at the same time, the prices are 58 euros higher than a liquefied natural gas (LNG) global reference for 10 consecutive trading days.
The Estonian minister was the only to say the plan was “OK, pretty much” as a temporary measure and only to address extreme price hikes rather than a permanent solution.
“Europe still has to be an attractive gas market,” said Riina Sikkut, “Any measures on fossils and gas – they don’t solve the problem. We need local, affordable energy that has small environment footprint – and this is renewable energy.”
The EU has approved a raft of measures to mitigate the acute energy crunch since prices ran away last summer from electricity and gas savings to new taxes to claw back windfall profits from energy producers.
But the issue of how and whether to cap gas prices has divided the EU for months.
Launching joint gas purchases in the bloc and speeding up permitting procedures for renewable energy sources risked being held hostage after Poland, Belgium, Greece and Italy threatened to block these measures also awaiting the ministers’ approval if there is no deal on an actionable cap.