EU to suggest further power measures, keep away from rapid gas-price cap By Reuters

© Reuters. FILE PHOTO: European Union flags flutter outdoors the EU Fee headquarters in Brussels, Belgium, September 28, 2022. REUTERS/Yves Herman/File Photograph

By Kate Abnett and Gabriela Baczynska

BRUSSELS (Reuters) -The European Fee is ready to suggest one other set of emergency measures on Tuesday to deal with excessive power costs, however draft proposals recommend they won’t embody an instantaneous cap on fuel costs as EU international locations stay break up over the concept.

The bundle, a draft of which was seen by Reuters, is the European Union’s newest effort to handle a spike in power costs and gasoline provide crunch which have gripped Europe after Russia minimize fuel flows since invading Ukraine.

The Fee will on Tuesday suggest that the EU may, as a “final resort”, set a brief “most dynamic worth” on fuel trades on the Title Switch Facility (TTF) Dutch fuel hub, which serves as a benchmark worth for European fuel buying and selling.

Different EU fuel buying and selling hubs could be linked to this worth via a “dynamic worth hall”, in keeping with the draft doc, which may change earlier than it’s revealed.

The measure should not have an effect on EU safety of fuel provide, trigger a rise in fuel use, or disrupt the functioning of fuel markets, it stated.

The transfer to curb TTF fuel costs would require a separate proposal from Brussels and require approval from EU international locations.

The EU bundle consists of different measures geared toward lessening the affect of excessive costs on shoppers and companies. By Jan. 31, buying and selling venues should impose higher and cheaper price limits every day that front-month power derivatives should commerce inside, as a approach of limiting giant worth swings.

EU power regulators would even be charged with creating a brand new liquefied worth benchmark by the tip of March, and Brussels will launch a “device” for EU international locations to start out collectively shopping for fuel, in keeping with the draft.

The EU bundle is unlikely to placate all 27 EU international locations – whose leaders will talk about the proposals at a summit on Oct. 20-21. Most EU international locations have urged the Fee to urgently suggest a fuel worth cap, however disagree on its design.

European Council President Charles Michel, who chairs EU summits, insisted that different choices would nonetheless be a part of the talk – together with a scheme to cap the worth of fuel utilized in energy technology, which France and different international locations help however was not included within the Fee’s draft proposals.

“I additionally anticipate us to handle different quick and long-term market interventions, corresponding to an EU framework to cap the worth of fuel for electrical energy technology,” Michel stated in a summit invitation letter to EU leaders on Tuesday.

The Fee and international locations together with Germany and the Netherlands have warned that capping fuel costs may backfire, if it left EU international locations struggling to draw provide from international markets, or prompted fuel consumption to rise throughout a winter with scarce Russian gasoline.

France, Croatia and Finland all backed fuel worth caps on Tuesday, whereas Austria firmly opposed a cap on Russian fuel, in case Moscow retaliated by reducing off all provide. Austria nonetheless depends on Russia for roughly half of its fuel.

“If there’s a whole stoppage as a result of no fuel is being bought as a consequence of a most worth then for us it’s a clear ‘No’,” stated Karoline Edtstadler, Austria’s EU affairs minister.

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