As long as a "workable proposal" for a European price cap is not on the table, Belgium will not sign any energy agreements, said Federal Energy Minister Tinne Van der Straeten at the start of the European Council of Ministers on Energy.
On Tuesday, the Commission came up with a plan to avoid exceptionally high gas prices in the future, but the proposed price ceiling is strikingly high: €275/Megawatt-hour (MWh). Van der Straeten called it "insufficient" and added that it had to be adjusted before Belgium will sign the agreement.
"That text can be put 'on hold' until there is an agreement on the whole thing," Van der Straeten told VRT. "I do think there will be an agreement at the end of the day to work on the balance between all elements."
Belgium has been calling for a European gas price cap for a long time, with Prime Minister Alexander De Croo already advocating for one back in March this year. However, Germany, the Netherlands and Denmark were not in favour as they have a strong negotiating position on the gas market. The European Commission was hesitant as well, citing fears over the security of supply.
Not sufficiently refined
On Tuesday, the European Commission proposed a so-called price correction mechanism: gas transactions could then not take place if the price exceeds the €275/MWh mark for two weeks, and if at the same time the "spread" with the reference price for LNG on the global market rises to €58 or more.
This price cap, however, is remarkably high: over the past year – during which gas prices broke record after record – the €275/MWh threshold was only exceeded once, and only for one week (instead of the two required for the mechanism to kick in).
"The text currently on the table does not reach the bar, and the modalities are not sufficiently refined at the moment," Van der Straeten said. She called for an "effective mechanism that can intervene when the gas price is too high" and said there is no guarantee that this will be the case with the current proposal.
Still, Van der Straeten is happy that a proposal is finally on the table. "On the basis of that text, further work can be done and the proposal can be refined until there is a price ceiling that will actually have an effect."
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Asked about where she wants the limit to be for Belgium, Van der Straeten did not want to elaborate before the meeting had started. "You do not conduct a negotiation on the threshold of the Council of Ministers."
Belgium is not the only country opposing the Commission's proposal: the other 14 countries that have been calling for the price cap also seem to agree that the current proposal is inadequate.
Spanish Energy Minister Teresa Ribera already called it a "joke" on Wednesday, and Greek Minister Kostas Skrekas stated that the Commission "should have come up with a more realistic correction mechanism." He wants to set the ceiling between €150 and €200 per MWh.
Given the initial reactions to the EU Commission proposal, Czech Council President Jozef Sikela expects a heavy discussion. If ministers do not find an agreement, he plans to convene "as many council of ministers meetings as necessary" to reach a deal.