"We have identified a set of no regret measures aimed at addressing high gas prices and a preventive way forward. Key measures include: 1. Leverage European market power through the a joint purchasing platform; 2. Coordinating and optimizing filling trajectories for gas storages (e.g., using the platform); 3. Coordinating and intensifying energy diplomacy on gas imports with all reliable partners; 4. Developing a new LNG benchmark to reduce the impact of the TTF index on gas contracts; 5. Need for enhanced efforts to reduce energy consumption, and 6. Boosting and accelerating the deployment of renewable energies, particularly by removing regulatory barriers immediately," the letter read.
In addition, the ministers said they are looking for a solution that allows an interconnected TTF (Title Transfer Facility) zone to rely on a well-functioning market to match supply and demand without rationing, and to eliminate the side effect for a TTF-free zone, since long-term contracts are often tied to TTFs.
"As a result, we would like the Commission to explore the following options and to propose possible solutions. Option 1 is to amend references to the TTF index in the relevant contracts through a legal and/or regulatory EU measure. Views diverged on the legal feasibility of such option and the potential side effects of bifurcated markets. Option 2 is to apply a price cap/corridor to the wholesale market and to create a separate mechanism to match supply and demand if the price cap is hit (e.g., through over the counter transactions, tenders, separate marketplace). Views diverged on this option and whether such measure is possible and economically efficient or whether it might lead to rationing, arbitrage or subsidies," the ministers added.
Since 2021, energy prices in EU countries have been surging as part of a global trend. After the beginning of Russia's military operation in Ukraine in February and the adoption of several packages of sanctions against Moscow by the EU, energy prices have accelerated this growth, placing energy security high on both the global and national agendas, and pushing many European governments to resort to contingency measures. The EU has been looking for alternatives to Russian natural gas since it has pledged to end its dependence on energy supplies from Russia.
At the end of September, the energy ministers of 15 EU countries sent a joint appeal to the European Commission in which they advocated the introduction of a price cap for all gas imports into the EU, regardless of its origin.