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Europe fails to thrash out details on gas price cap

EU energy ministers have failed to agree on a cap on natural gas prices. New emergency meeting in mid-December.

Kenzo Tribouillard | Afp | Getty Images

BRUSSELS – The European energy ministers have failed to reach a compromise on a cap on natural gas prices after “heated”, “ugly” and “difficult” discussions.

The 27 EU leaders agreed at the end of October to give their political support to a cap on natural gas prices after months of discussions on how best to tackle the current energy crisis.

The European Commission, the EU’s executive branch, and the bloc’s energy ministers were then tasked with resolving the more specific and practical differences over the measure.

However, the differences of opinion in Brussels are so acute that energy ministers have failed to find a compromise and have instead called another emergency meeting for mid-December.

“The tension was palpable,” an EU official, who followed the talks but preferred to remain anonymous due to the sensitive nature of the talks, told CNBC by telephone. The same official said the talks were “really tough” because of a “fake price cap”.

In an attempt to get everyone on board, the European Commission proposed a ceiling of €275 per megawatt hour. The limit would also only come into effect if prices are 58 euros ($60.46) higher than a global LNG (liquefied natural gas) reference price for 10 consecutive trading days within a two-week period.

Countries eager to introduce the cap, notably Poland, Spain and Greece, say this proposal is unrealistic as it is so high it is unlikely to ever be triggered.

“The gas price cap set out in the document does not satisfy any country at the moment. It is kind of a joke for us,” Anna Moskwa, Poland’s climate minister, said in Brussels on Thursday.

Other EU officials, who spoke to CNBC on condition of anonymity, mentioned how the talks were “heated”. One even said that “it got really ugly at some point.”

This reflects how poorer, more indebted EU countries feel about the energy crisis that has hit the region since Russia’s invasion of Ukraine in February. With less fiscal space to support domestic consumers, these countries need EU-wide measures to control energy costs at home.

“I hope we get there next week,” another official who followed the meeting told CNBC on condition of anonymity.

During a press conference on Thursday, Jozef Sikela, the Czech Minister of Industry and Trade, also said: “We are not opening the champagne yet, but putting the bottle in the fridge.”

We don't have more than a few months, says Malta's energy minister of the gas price cap

Energy ministers are expected to meet again on December 13, just before heads of state meet in Brussels for their last EU summit of the year. Until then, the committee’s proposal will likely be amended in hopes of getting everyone on board.

The prices on the European benchmark Title Transfer Facility (TTF) of the first month closed on Thursday at around 129 euros per megawatt hour. They had reached a historic high in August with almost 350 euros per megawatt hour.

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