EU seals deal on gas price cap after months of wrangling

(EurActiv, 20 Dec 2022) EU energy ministers reached a deal on Monday (19 December) to limit excessive gas prices, following months of debate over whether or not to implement a price cap on imports into Europe.

Under the agreement, gas prices on the EU’s main trading hub will be capped should they exceed €180 per megawatt-hour (MWh) for three consecutive working days and if they are higher than global gas prices by more than €35/MWh for the same three days.

“From the start, there was a common goal: keeping prices under control while at the same time preserving securing security of supply. Today, we achieved this goal,” said Belgian energy minister Tinne Van de Straeten whose country was one of the biggest proponents of the cap.

The measure – formally known as the market correction mechanism – would see prices of month-ahead, three-month ahead and year-ahead derivatives capped at a certain level depending on the global price of liquified natural gas (LNG).

Implemented initially for a year, it could also be extended to other trading hubs via a second legislative proposal from the European Commission, due by the end of March, according to a room document seen by EURACTIV.

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EurActiv, 20 Dec 2022: EU seals deal on gas price cap after months of wrangling