Brussels is set last resort

Brussels is set to table «last resort» measures to curb gas prices as the EU seeks to ease the bloc’s energy crisis and prepare for even more significant supply challenges next year. According to a draft European Commission proposal seen by the Financial Times, the EU should be able to intervene in markets and set a «maximum dynamic price» at which gas transactions can take place on the Dutch Title Transfer Facility, a benchmark for gas traded in the bloc. The plans follow an extraordinary meeting of EU commissioners on Sunday and are due to be formally presented after a second meeting of the bloc’s executive arm today.

Next year could prove even more challenging if Russian supplies are entirely cut off and energy demand from China, whose industries have been curtailed owing to its zero-Covid policy, rebounds. The draft proposal emerged as member states prepared for a summit in Brussels on Thursday and Friday to find ways to curb the crisis. EU states have been at loggerheads over how best to tackle the energy price surge together, with the question of capping gas prices proving contentious. In addition, member states wanted to ensure the commission stuck to a tight timeline for enforcing the new rules.

The EU has already been negotiating with Norway, the bloc’s biggest gas supplier, to collaborate to cut costs. Other proposals intend to limit volatility in energy derivatives markets, enforce reductions in gas consumption and create a new benchmark for liquefied natural gas in the longer term.

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