[Asia Economy Reporter Jeong Hyunjin] The 27 member countries of the European Union (EU) clashed once again on the 24th (local time) over the introduction of a price cap to stabilize natural gas prices, failing to reach a decision and ending the meeting without determining whether to implement it. The final decision on the introduction of the price cap will be discussed again at next month's meeting.
According to Bloomberg and other sources, ministers from the 27 EU countries attended a special meeting of the EU Energy Council held in Brussels, Belgium, but ended the meeting without deciding on the introduction of the gas price cap.
Kadri Simson, EU Commissioner for Energy Policy, stated that while ministers agreed on some emergency measures during the meeting, formal approval for the introduction of the price cap has been postponed until mid-next month. She said, "The ministers have reached a political agreement," but added, "There is still one thing missing: a tool to address the sharp rise in prices."
Jozef S?kela, Minister of Industry of the Czech Republic, which holds the rotating presidency of the EU, explained the situation at a press conference after the meeting, saying, "The discussion was quite heated, and as you know, there are very diverse opinions," and "There are different views on how the price cap should work and basically how deep the intervention should be."
The EU has been discussing the introduction of a gas price cap for several months but has yet to make a decision. The key issue in the discussion on this day was the price benchmark included in the price cap proposal presented by the European Commission on the 22nd. The Commission proposed to member countries that the activation threshold for the price cap on the Dutch TTF futures price, the European natural gas price benchmark, be set at 275 euros (about 380,000 KRW) per megawatt-hour (MWh) for one year starting January next year.
Currently, gas futures prices are around 110 to 120 euros. The only time gas prices exceeded 275 euros was in August, when the price surge peaked. Member countries strongly advocating for the introduction of the price cap have suggested lowering the threshold to around 150 euros.
Before the meeting, Spain criticized the proposal as "nonsense," saying it would be nothing more than a mimicry. During the meeting, Spain, along with Poland, Belgium, Romania, and Greece, opposed the 275-euro benchmark as being too high. On the other hand, countries opposing the introduction, such as Germany and the Netherlands, expressed concerns that the price cap could reduce gas supplies to Europe.
With no final conclusion reached at the meeting, the issue of the gas price cap will be discussed again at the Energy Ministers' meeting on the 13th of next month, two days before the European Council summit on the 15th. For the gas price cap to be implemented from January next year as proposed by the Commission, all 27 member countries must agree.
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