By Euronews Brussels bureau A pivotal debate is about to reach its climax: Should the European Union...
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To cap or not to cap: that is the question

By Euronews Brussels bureau

A pivotal debate is about to reach its climax: Should the European Union impose a price cap on all gas imports in a bid to curb spiralling energy prices?

For countries like Italy, France, Sweden, Poland, Greece and Belgium, the answer is a resounding yes.

A growing majority of EU countries believe a price cap is the only way to bring prices really under control and shrink the dominant role that gas plays in the electricity market. Belgian Prime Minister Alexander De Croo has even suggested his country will introduce the measure on its own if an EU-wide solution fails to materialise.

But for others, like Germany, the EU’s leading economy and largest gas consumer, the answer is “nein.”

“The issue with the price cap is that: if you introduce a price cap, as the EU unilaterally, and all the other consumers around the world don’t, then the gas will go to other consumers and thus we might have a shortage in gas supplies,” Anna Lührmann, Germany's minister of state for Europe, told us earlier this week.

“So, I think we should be very careful with these kinds of price caps and do everything we can to diversify our supply structure. That will also help to address the price issues.”

The German government remains wary that a price cap will encourage consumer demand at a time when savings are crucial. Spain, a key importer of liquefied natural gas (LNG), believes the debate is not mature enough.

All eyes are now on the European Commission. Will the EU's executive enter uncharted territory or err on the side of caution

“My strong belief is that we should treat Russia as an unreliable partner who is manipulating the supplies differently than the partners who have supported us, who have kept their contracts and who have made it possible for us to find alternative gas supplies to replace lost Russian volumes. The approach towards Russia and other partners has to be different,” Kadri Simson, European Commissioner for energy, told our reporter Aïda Sánchez.

“At the same time, we do have very good cooperation with countries who are connected with us via gas pipelines: Norway, Azerbaijan, Algeria, all of them. We will reach out to them and try to find a way so that the price will be more affordable.”

But Simson’s proposal for a price cap exclusively on Russian gas has been already shot down by member states, who argue the current flows from Moscow are so distorted and so low that the potential benefits for consumers will be barely noticeable.

In an internal document seen by Euronews, the Commission floats a new set of measures to address the energy crisis, but all of them relate to the financial sector. The proposals include a separate benchmark for LNG tankers, detached from the traditional trading of pipeline gas.

“Of course, we have the LNG market,” Simson said. “We have to make sure that this is not manipulated, that there are good benchmarks that allow us to attract additional LNG volumes that we need but that, at the same time, don’t hit new records every time a hostile press release is published.”

So where is the gas cap?

When asked point-blank if the Commission was willing to move ahead with the untested solution, Simson neither confirmed nor denied.

“The work is ongoing,” she said. “Our biggest concern is how to design something like this so that our [gas] volumes and the volumes that we can attract will not be hurt.”

 
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