Key points of the gas price cap + EU Commission wants higher tobacco tax + Raw materials partnership with Ukraine • Europe.Table

Here’s how the gas price cap is supposed to work
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Dear reader,

The European gas price cap continues to take shape. The EU Commission has now drawn up a price cap in a key issues paper. This is to apply to transactions based on the Dutch price index TTF, which are concluded for the following month. Manuel Berkel has analyzed the as yet unpublished paper.

Smoking is to become significantly more expensive in the future, according to the EU Commission’s plan. The proposal, which is exclusively available to Europe.Table, envisages that the member states should link the minimum taxes to their purchasing power. What exactly this means for Germany, and what criticism is already emerging, Markus Grabitz has written down.

My colleague Leonie Düngefeld is in Brussels this week for EU Raw Materials Week. There, Maroš Šefčovič, Commissioner for Interinstitutional Relations and Foresight, yesterday signed a memorandum of understanding with Ukraine to advance the raw materials partnership. There, people are already thinking about the reconstruction and investments that could be possible after the end of the war, Šefčovič says in an interview.

Your
Lisa-Martina Klein

Feature

Here’s how the gas price cap is supposed to work

The European cap on gas trading is to apply to only part of the market, according to new key points from the Commission. In it, the executive claims the power to suspend the price limit at any time. To appease the Council, however, there are already building blocks for a legislative text.

By
Manuel Berkel

The Commission has drawn up key points for a price cap in gas trading. It is to apply to transactions concluded in the following month, based on the Dutch TTF price index. This price plays a key role as a reference on the European wholesale market for gas, writes the EU Commission in an as yet unpublished paper, which the ambassadors of the member states discussed on Wednesday and which has been made available to Europe.Table (link to the document).

However, the cap is only to take effect if there are no price jumps in the global LNG market. This is to ensure that the EU continues to import liquefied gas.

The paper does not yet specify a concrete price ceiling for the market correction mechanism. However, the “extraordinary price increase in Aug. 2022” could serve as a guide when setting it. Back then, the TTF price for gas supplies in December climbed up to €350 per megawatt hour, but on Wednesday the index was only about €125.

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