Brussels will set the TTF maximum price in advance which activates the cap on gas
The European Commission Its first details have been sent to the 27 member states of the European Union A plan to cap the price of gas if it reaches a certain maximum level determined in advance. This mechanism, through which the EU intends to correct the volatility of the gas market, will limit prices from reaching a previously set maximum level, so that their effect is “immediate”.
According to a draft consulted by Europa Press before being officially presented, the Commission proposes that the mechanism Cap one month in advance on Dutch TTF futures market products, which is used as a benchmark for gas prices in the EU. This stop will be activated If the Dutch price base reaches a predetermined maximum level To determine in advance and if the price increase is not in line with the same increase in the world market.
Brussels aims to “Achieve immediate results“Even if it is in the market as a preventive measure, it increases the possibilities Suspend the mechanism in case of “serious disturbances” in the market. In addition, the price cap will be automatically deactivated if the monthly review shows that it does not meet the conditions for its application. The total duration of the measure is expected to be a maximum of one year, as it must be temporary in nature.
This proposal responds to the demands of countries such as Spain and France Take urgent action to tackle high energy prices But its scope will not be known unless the maximum prices that activate the mechanism are specified. In this context, the Commission recognizes that unless it is set at a sufficiently high level, A cap can prevent the futures curve from formingMarket functioning is affected.
The general lines of the reform mechanism in which the work of Brussels was transferred this Wednesday to the capital, which now has to study and take a position until the next EU energy conference on 24 November. The Community Executive has promised to submit a legislative proposal but is reluctant to do so until it hears from member states again.
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