The European Commission has unveiled a formal proposal to establish what could soon be the first-ever EU-wide cap on gas prices, but with such stringent conditions that it might never be actually triggered.
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The extraordinary measure will act as a safety ceiling against cases of extreme volatility and rampant speculation in the gas markets.
It will apply to the Title Transfer Facility (TTF), the Dutch virtual hub where shippers and clients trade gas supplies.
The TTF is the leading reference for Europe's entire energy sector, with its prices having a strong influence on the bills that companies and consumers receive every month.
Since Russia launched its war in Ukraine, the TTF has seen record-breaking ups and down. After hitting an all-time high over the summer, prices stabilised but still remain very high.
"This is not a regulatory intervention to set the price at the market at an artificially low level," said Kadri Simson, the European commissioner for energy, while presenting the new legislation on Tuesday afternoon.
"It is a mechanism of last resort to prevent, and if necessary, address episodes of excessive high prices which are not in line with global price trends."
The draft text will now go to EU countries for discussion and approval. Energy ministers are scheduled to meet on Thursday to hold a first exchange of views.
"What we have proposed today can find common ground between diverging views," Simson said, acknowledging the "long process " that preceded the long-awaited proposal.
"This is not a silver bullet that will bring gas prices down. But it provides a powerful tool that we can use when we need it."
The cap, as designed by the European Commission, will be automatically activated but only if two key conditions are met:
If TTF prices reach or surpass €275 per megawatt-hour for at least two weeks.
If TTF prices are €58 higher than the market reference of liquefied natural gas (LNG) during at least 10 consecutive trading days. ■