The European Commission recently proposed an emergency regulation to address high gas prices in the European Union (EU) and ensure security of supply this winter, media reported.
In combination with already agreed measures on gas and electricity demand reduction, gas storage and redistribution of surplus energy sector profits, these new steps will improve stability in European gas markets this winter and beyond.
According to media report, This will be done through joint gas purchasing, price limiting mechanisms on the Title Transfer Facility (TTF) gas exchange, new measures on transparent infrastructure use and solidarity between Member States, and continuous efforts to reduce gas demand.
The regulation will aggregate EU demand and joint gas purchasing to negotiate better prices and reduce the risk of member states outbidding each other on the global market, while ensuring security of supply across the entire EU.
It will advance work to create a new LNG pricing benchmark by March 2023, and in the short term, propose a price correction mechanism to establish a dynamic price limit for transactions on the TTF gas exchange, and a temporary collar or bandwith to prevent extreme price spikes in derivatives markets.
It will implement default solidarity rules among member states in case of supply shortages, extending the solidarity obligation to member countries without direct pipeline connection to involve also those with LNG facilities.
It will also develop a proposal to create a mechanism for gas allocation for member states affected by a regional or union gas supply emergency.
In addition, the Commission will carry out a needs assessment on REPowerEU to speed up the clean energy transition and avoid fragmentation in the single market, to make proposals to enhance the EU financial firepower for REPowerEU.
The Commission is also proposing a targeted flexible use of Cohesion Policy funding to tackle the impact of the current energy crisis on citizens and businesses, using up to 10 per cent of the total national allocation for 2014-2020, worth close to €40 billion.