(Bloomberg) – EU ministers pulled off what one diplomat called a miracle in July when they took just six days to agree to cut gas demand. Since then, block deadlines have slipped and it now seems unlikely that any new key measures will be in place for the winter.
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Ministers set another new deadline when they met on Tuesday and are now aiming to strike a deal on the latest batch of proposals to get energy prices under control on November 24 – well ahead of the heating season. But even if they succeed, key measures like a new market benchmark won’t come into effect until the spring. Price cap plans remain mired in technicalities and political wrangling.
The market is giving policymakers pause: There is a gas glut in Europe right now, as efforts to bring in LNG shipments have coincided with unusually warm weather. But as the risk of a widespread energy crisis recedes, the will to act also diminishes.
Read: Too much gas. The energy crisis in Europe takes a surprising turn
“The commission should deliver the remaining pieces of the puzzle,” said Jozef Sikela, Minister of Industry of the Czech Republic, which holds the rotating EU presidency. “The game is not over and because the game is not over we need to have an emergency measure no matter where we are right now.”
In July, as Moscow cut gas supplies and pushed for a rethink of European energy policy, the bloc agreed to a voluntary 15% target to reduce demand, with the option to make it mandatory if necessary. The EU has since moved to allow governments to cap the profits and revenues of energy companies and channel profits to consumers.
Those were the easy steps. The trickiest ones – with the greatest potential impact – are still stalled in diplomatic talks, with member states accusing the commission of dragging its feet.
Read: EU warns of gas caps for UK electricity needs and Switzerland’s role
The key question now is whether the bloc can offer a cap on gas prices. One idea that is gaining traction is a dynamic price corridor on the main Dutch securities transfer facility and other hubs. Energy Commissioner Kadri Simson has signaled that it might be possible to come up with a proposal on this measure before the November 24 meeting. This would only be the start of weeks of process.
“The Commission will quickly work out the details,” she told a news conference on Tuesday.
The other ceiling in the mix is that of limiting the price of gas used in electricity generation, which is backed by a vocal group of member states. But the Commission released a document on the eve of Tuesday’s meeting outlining a number of challenges the plan would pose – such as how to stop boosting demand for gas and electricity flowing to countries outside the EU. EU.
Another challenge is that some diplomats believe it is not possible to apply both types of price caps at the same time. At several EU meetings, even the definition of a price cap has been left deliberately vague, and some countries still can’t agree on what it should mean.
“Some time ago, around 15 member states argued about interfering more strongly in the market, although the 15 had different ideas when discussing how exactly to do this,” said Dutch Energy Minister Rob Jetten. “We must avoid hasty decisions.
–With help from Katharina Rosskopf and Ania Nussbaum.
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