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EU considers more action to tame energy prices, fix liquidity squeeze

EU's green shift depends on mammoth investment in energy grid - draft
EU's green shift depends on mammoth investment in energy grid - draft Copyright Thomson Reuters 2022
Copyright Thomson Reuters 2022
By Reuters
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By Kate Abnett

BRUSSELS - The European Commission is working on more measures to tame sky-high gas prices and support energy firms facing a liquidity crunch, and may lay out its plans to EU countries next week.

The European Union's executive last week proposed emergency energy measures, including bloc-wide windfall profit levies on energy firms. EU countries are now negotiating the proposals and aim to approve them at a meeting of EU ministers on Sept.30.

While those negotiations are happening, the Commission intends to publish an update on Sept.28 on further measures it is exploring, EU officials said.

This plan will not include legal proposals, the officials said. Rather, it will cover options the EU could use to tackle high gas prices - which the Commission has said could include launching an alternative benchmark gas price to the Dutch Title Transfer Facility (TTF).

The EU also plans to aid companies facing soaring collateral needs, the officials said, as high power prices have left energy firms struggling to find the huge amounts of cash currently necessary to secure their power trades.

Brussels has said it is looking into amending collateral requirements in energy markets or limiting intra-day price volatility, as ways to ease this liquidity crunch.

The EU has backed away from a gas price cap in recent weeks, and the idea remains contentious among EU countries. Some, like Italy, want a price cap on pipeline gas imports, while Germany is among those warning that a price cap could making it harder for countries to attract much-needed fuel this winter.

EU officials said countries were hopeful of striking deals at next week's meeting of energy ministers, on the emergency measures Brussels has already put on the table.

A compromise proposal, discussed by diplomats on Wednesday, was welcomed by countries as a step towards agreement - although some states are seeking guarantees that they can keep their national windfall profit levies on energy firms, instead of switching to the EU's plan.

Others are also seeking to make voluntary the EU's proposal to require countries to cut electricity use during peak price hours, officials said.

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