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EU energy ministers fail to reach decision on gas price cap

December 14, 2022

EU member states are divided on the cap, with Germany, Austria and the Netherlands skeptical of the policy. Talks will resume on Monday, with France a key player in the final negotiations.

https://p.dw.com/p/4Kt8u
Czech Republic's Minister for Industry and Trade Jozef Sikela, left, speaks with Germany's Climate Action Minister Robert Habeck
Some countries, including Germany, worried that the price cap could disrupt marketsImage: Virginia Mayo/AP Photo/picture alliance

EU ministers meeting in Brussels on Tuesday delayed the final decision on a proposed cap on natural gas prices to next week, despite the urgency of the issue. 

The European Commission proposed the price cap last month following the economic upheaval caused by Russia reducing gas supplies to Europe, hiking up energy prices.

What happened during Tuesday's EU meeting?

The ministers agreed on two other measures to mitigate the bloc's energy shortage: joint gas purchases as well as accelerated authorizations for renewable energy installations would be adopted as soon as the price cap was finalized. 

"I was hoping to open a Champagne today to celebrate the agreement. But apparently, we still need to keep the bottles in the fridge for a while," said Czech Industry Minister Jozef Sikela. The Czech Republic currently holds the EU presidency and chaired the discussions. 

He told journalists, "Our aim is to approve all three items in a package on Monday," when the talks on the price cap resume. 

The commission had suggested a price cap of €275 ($292) per megawatt hour, but only if the price remained above that level for at least two weeks, and then only if the price for liquified natural gas (LNG) went above €58 for 10 days within that same two-week period. 

To reach a deal, the EU ministers need to agree on how high the price limit should be, to which gas contracts it should apply and what safeguards to enact, such as the EU's authority to suspend the cap immediately in case of unwanted consequences. 

Cap exposes 'fragile balance' in EU 

Some countries, including Germany, Austria and the Netherlands, fear that the gas price cap might risk supplies going to higher-paying markets. 

"We have made progress, but we are not done yet. Not all questions could be answered today," German Economy Minister Robert Habeck said after the meeting, which overran by hours as country delegates hunted for a compromise.

Denmark's Climate and Energy Minister Dan Jorgensen speaks with European Commissioner for International Partnerships Jutta Urpilainen and Czech Republic's Minister for Industry and Trade Jozef Sikela
Others urged for the cap because high energy prices were already hurting their economiesImage: Virginia Mayo/AP Photo/picture alliance

Other states, including Greece, Belgium, Italy and Poland are urging for a cap, claiming it would protect their economies from high energy prices. 

"European citizens are in agony, European businesses are closing and Europe has been needlessly debating," Greek Energy Minister Konstantinos Skrekas said on Tuesday ahead of the meeting. 

"The time for consultation has run out," the Italian minister for European affairs, Raffaele Fitto, said as he went into the meeting.

Both sides could each have enough votes to block a deal, with France potentially proving to be decisive in the final negotiations on Monday. 

Sikela said the price cap was "extremely sensitive" and had exposed a "fragile balance" in the European Union.

EU agrees on Russian oil price cap

"Some of the countries believe that if we are wrong with the mechanism, it can basically cause like a much bigger problem that we want to prevent," he said.

los/wd (dpa, AFP, AP, Reuters)

Correction, December 14, 2022: A previous version of this article incorrectly stated that Poland was holding the EU's rotating presidency. It is in fact the Czech Republic which is holding this position in the second half of 2022. This has now been corrected. We apologize for the error.