EU agrees to collectively purchase fuel — however divided on worth caps

Though no breakthrough was made in talks over worth caps, EU nations reached a common settlement to buy fuel by a joint platform earlier than subsequent summer season, Sikela mentioned.

Power ministers mentioned totally different choices to curb excessive costs in a bid to information the European Fee within the design of emergency measures because of be introduced subsequent week (18 October).

The fee’s proposal will likely be prepared in time for the summit assembly of EU leaders in Brussels on 20 and 21 October — the place vitality points and their impression on Europe’s financial system will likely be excessive on the agenda.

Among the many priorities of the proposal will likely be: joint purchases of fuel, to keep away from EU nations outbidding one another in world markets forward of subsequent winter, guaranteeing solidarity agreements amongst member states, additional energy-savings targets, and creating a complementary benchmark for fuel costs.

“We should sort out the costs now,” EU commissioner vitality Kadri Simson mentioned throughout a press convention alongside Síkela.

“The fee’s choice [to lower prices] has been to do it by way of negotiations with our worldwide companions. However now we have to be prepared if these negotiations aren’t fast sufficient,” Simson mentioned.

The EU must be prepared to use a brief mechanism to restrict the costs if negotiations don’t ship in time, she added. The upcoming proposal is anticipated to clarify how this is able to work in apply.

Non-EU Norway, which stepped in as a significant EU fuel provider because it minimize provides from Russia, opposes worth caps for fuel.

“We expect the answer is to construct on the business framework,” mentioned the nation’s vitality minister, Terje Aasland, who joined EU ministers in Prague mentioned on Wednesday.

Negotiations with suppliers in Norway and the US to scale back the costs of imported fuel are seen by many EU nations as a measure which might decrease costs whereas preserving provide.

“That is a logical first step that must be executed,” Austrian vitality minister Leonore Gewessler mentioned, forward of the assembly together with her counterparts.

German-Dutch proposal

Till now, some nations have pushed for a broad worth cap on fuel — whereas others see this as a dangerous transfer that might undermine safety of provide, or inadvertently enhance consumption.

Nonetheless, it’s nonetheless unclear whether or not the proposal of the fee will embrace some kind of proposal for worth caps.

“Our proposal on 18 October will encompass the sorts of proposals the place now we have most consensual help,” mentioned Simson — falling brief to make clear whether or not there’s sufficient help to place ahead the sort of measure.

Based on the Polish surroundings minister Adam Guibourgé-Czetwertyński, a gaggle of 17 nations is at the moment in favour of a wholesale fuel worth cap for each imports and intra-EU fuel transactions. The listing consists of Belgium, France, Poland, Portugal, Slovenia, Greece, Italy and Spain.

However Germany, the Netherlands and Hungary are nonetheless cautious of any worth cap.

“We agree on the prognosis. The remedy remains to be below dialogue,” mentioned the Italian minister for ecological transition Roberto Cingolani forward of the assembly.

On Tuesday (11 October), Berlin and Amsterdam put ahead a 10-point proposal presenting emergency measures to sort out the vitality disaster. However each nations voiced scepticism in regards to the concept of capping fuel costs.

“Measures within the electrical energy sector which could enhance the fuel demand and concentrating on the identical infra-marginal rents ought to be thought of very fastidiously and likewise ought to embrace burden-sharing,” reads their doc.

‘Complicated’ debate

“The controversy on the cap is a confused one, as a result of there are totally different caps totally different folks discuss,” mentioned German minister for local weather motion Sven Giegold, referring to the variations in market dynamics relating to imports of liquified pure fuel (LNG) and fuel that comes by way of pipelines.

For LNG, a globally-traded commodity, Germany and others argue {that a} worth cap could be detrimental as suppliers might flip to areas with out worth caps to promote their fuel. For fuel by way of pipelines, they argue caps danger undermining market alerts to eat much less and will doubtlessly set off an uptick in consumption.

Hungary, for its half, is anxious that Russia will fully minimize fuel provides if a worth cap is launched.

“Russia has made it very clear that in case of an introduction of the worth cap on fuel, they might minimize the fuel deliveries … so it is apparent that we’ll not help [this measure],” Hungarian minister for overseas affairs Péter Szijjártó mentioned on Wednesday, forward of the casual vitality council in Prague.

Detailed and in-depth discussions over the fee proposal will happen later this month (25 October) amongst vitality ministers, who’re anticipated to undertake the fee proposal in early November throughout a rare council assembly.