The Twenty-Seven had already agreed on December 13 on certain terms of the mechanism. But they still had to agree on the price from which the cap would start. It is now done.
EU member states on Monday approved a mechanism to cap wholesale gas prices once they exceed 180 euros per megawatt hour (MWh) for three consecutive days, according to a statement from the European Council. A level well below the threshold of 275 euros initially proposed by the European Commission.
This capping mechanism, put in place after several weeks of tough discussions, will only be activated at a price level at least 35 euros higher than the average international price of liquefied natural gas (LNG), in order not to put Europe’s gas supplies at risk, a diplomatic source said. An automatic deactivation of the mechanism is also provided in the event of unexpected disturbances.
The European energy ministers, meeting in Brussels, “have reached an important agreement that will protect citizens from soaring energy prices, with a realistic and effective mechanism, which includes the necessary guarantees for the security of supply and the stability of financial markets”said Czech Minister Jozef Sikela, whose country holds the rotating EU presidency.
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