Following intense negotiations at the Energy Council that continued today in Brussels, EU Energy Ministers reached a deal that can help introduce a market correction mechanism for natural gas, also known as a gas price cap.
This market correction mechanism is aimed at stabilising the natural gas markets when prices start increasing to excessive levels. This has been the situation for the past months across the European Union, when prices have increased to unprecedented levels, particularly during the month of August.
Speaking ahead of the meeting, Minister for the Environment, Energy and Enterprise Miriam Dalli highlighted the importance of reaching an agreement needed to calm the markets and stabilise gas prices. Minister Dalli underscored the necessity of this agreement for Malta, as Malta uses gas for energy production.
The agreement aims to trigger the correction mechanism when gas prices start increasing beyond €180 with inbuilt safeguards for suspension and deactivation so as not to endanger the gas market.
The price cap agreed and the whole mechanism is expected to result in manageable energy prices on the European continent from where Malta imports its electricity through the Interconnector.
Minister for Energy, the Environment and Enterprise Miriam Dalli stated that this is a good step forward. “What we have been experiencing across the European Union in the past few months has put much strain on our economies, households, and industries. We need different solutions to the current situation to attempt to lower the price of gas used for electricity. I believe that this regulation is one step in the right direction and, together with other decisions, has the potential to control energy prices to some extent,” she added.
The war on Ukraine has led to exorbitant energy prices, and whilst high energy prices will continue for the following months, the European Union is trying to implement regulations that can, to some extent, control such increases.
“In Malta, we have taken the bold decision to retain energy prices stable for families and entrepreneurs, considering that the vast majority of our industries are SMEs. This means that the government has to work harder at the European level to ensure that gas prices do not increase uncontrollably,” she added.
Energy Ministers also reached an agreement on two other emergency regulations, one relating to permitting for renewables and another one ensuring solidarity in cases of crisis.
