For winter, the EU seeks to reform the gas market

The European Commission, under strong pressure due to the approaching winter and divisions in the bloc, formulated proposals to face energy price increases with reform.

The original idea of ​​the Commission, executive arm of the European Union (EU), to impose a cap on the price of energy, caused deep disagreements that led it to advance in proposals that allow a consensus.

The proposals will be examined this Thursday and Friday during a summit of the bloc’s heads of government in Brussels, before their eventual adoption.

The Commission proposed a reform of the gas market called the Title Transfer Service (TTF) that serves as a reference for the transactions of European operators.

According to the announcements, the Commission will create (at the latest in March 2023) an alternative index more representative of the current situation.

Until the new index is defined and adopted, the Commission will promote the implementation of a “dynamic price” range to prevent what it calls “extreme prices”.

Joint purchases

The Commission proposed measures to make joint gas purchases a reality, so that they obtain better prices for the replenishment of reserves before the winter of 2023.

This initiative seeks to prevent the EU states from fueling the rise in prices by competing with each other, as they did last summer by filling their reserves at the same time.

We know that the demand for energy in Europe is very large, so it is logical that, instead of competing with each other, states and energy companies take advantage of their joint purchasing power”, said Ursula Von der Leyen, head of the European Commission .

In March, the states gave the green light to a common purchasing platform; no transaction was concluded and the countries negotiated on their own.

In addition, the Commission proposed to establish a standard agreement that guarantees that any country in an emergency situation receives gas from other members in exchange for fair compensation.

It also seeks to authorize the countries of the bloc to take exceptional measures to reduce the consumption of those protected clients, a legal term that encompasses homes, hospitals and SMEs.

Depending on its hydrocarbon imports, the European economy suffers from cutbacks in deliveries by Russia.

The idea of ​​a cap on the price of gas imports, mentioned by the Commission in early November and demanded by 15 member states, seems to have been forgotten.

In early October, European leaders expressed their concern about the economic and social consequences of this scenario in a scenario of high inflation.