EU Energy Emergency Measures

 The European Commission has proposed a new emergency Council Regulation to address high gas prices

The new emergency Council Regulation will address high gas prices, which includes the following measures:

  • joint purchasing platform to obtain additional supplies for gas storage filling. This will consist of a mandatory participation of Member States’ undertakings in the EU demand aggregation to meet at least 15% of their respective storage filling targets.
  • new LNG pricing mechanism by March 2023. This will be developed by the Commission together with ACER aiming at providing stable and predictable pricing for LNG transactions.
  • While the new LNG pricing mechanism is developed, a price correction mechanism to establish a dynamic price limit for transactions on the TTF gas exchange is created. In practice, transactions at a price higher than the dynamic limit would not be allowed to take place in the TTF.
  • temporary collar or bandwith to prevent extreme price spikes in gas and electricity derivative markets will also be introduced to protect energy operators from large intra-day price movements.
  • Default solidarity rules between Member States in case of supply shortages, extending the solidarity obligation to Member States without connection to involve those with LNG facilities.
  • Mechanism for gas allocation for Member States affected by regional or Union gas supply emergency.

Council Regulation Proposal

GEODE will continue following the developments on the EU emergency measures and provide updates.