EU countries push through gas price ceiling despite Dutch objections

The entire European Union will soon get a price cap on natural gas. The objections to the plan’s limits to counter gas price peaks, submitted by the Netherlands and others, have not yet been resolved. The European Union countries ultimately pushed the plan through on Monday.

The Netherlands feared that the ceiling was going to be set too low and that gas suppliers would drop Europe for better paying customers. Minister for Energy and Climate Rob Jetten therefore did not support the plan during the final negotiations in Brussels on Monday, but, like Austria, abstained from voting. Hungary was the only member state to vote against the proposal. Germany, which has long led the resistance to the price cap, did ultimately support the plan.

The market correction mechanism, which kicks in when the gas price peaks for a number of days, will come into effect much sooner than the cautious European Commission had proposed. The Commission wanted to set the bar for the leading Amsterdam gas market, TTF, at 275 euros per megawatt hour. But that was unpalatable for many countries. At that price point, the ceiling would not have been reached even with last summer's record prices.

The ceiling is now set at 180 euros per megawatt hour, the energy ministers of the European Union countries have agreed. It should come into effect from 15 February if gas prices hold above the limit for three days or more, EU sources said.

Since the outbreak of the energy crisis, some EU countries have been unsuccessfully pleading for a maximum price for natural gas. Such a limit should protect citizens and companies against sky high peaks that soar to a point where they can no longer pay the bill. They eventually found enough support to continue with negotiations, but it took time to win over the skeptical European Commission. Subsequently, the champions in support of the measure hesitated for a long time before imposing their will on opponents, in particular Germany.

Now that the price cap is in place, the road is also clear for other measures against the energy crisis. The supporters of a maximum price held back on this issue as long as they could not get their way. Measures regarding the joint purchase of gas and the faster issuance of permits for renewable energy then stalled, even though the EU countries had actually already agreed on the concepts. The Netherlands was disappointed the issues were moved to the back burner.