EU leaders agree on energy deal but capping gas prices remains a problem

EU leaders have reached an agreement on a ‘roadmap’ to combatting rising energy prices.

27 EU leaders convened for a two-day summit in Brussels, negotiating proposals to lower energy bills.

The proposals include the voluntary joint purchasing of gas, a temporary dunamic price corridor on natural gas transactions, and a temporary framework to cap the price of gas in electricity generation.

The proposed price gap was a point of contention during the summit. German Chancellor Olaf Scholz advised against such a measure as it could redivert energy supplies to Asian markets while disincentivising energy-saving measures.

But French President Emmanuel Macron said that German, and Europe, should not isolate itself. “It is important that, on proposals that are the subject of a broad consensus, we can find unanimity.”

After negotiations, the final text reads that a “cost and benefit analysis” be carried out on a price cap framework to address its impact on flows beyond the EU’s borders while limiting increased gas consumption.

Meanwhile, Hungary’s prime minister Viktor Orban said that there will be an exemption for the country, which has a 15-year deal with Russia’s Gazprom.

European Council President Charles Michel said there was a strong and unanimous commitment to lower prices, guarantee security of supply, while working to reduce demand.

European Commission chief Ursula von der Leyen added that the summit agreement laid out a solid roadmap to work on energy prices.

In a comment after negotiations were concluded, Malta’s Prime Minister Robert Abela said the EU sent the right signal with the proposals. “Government’s proactive approach to assist and protect the livelihoods of our citizens and provide stability for our businesses has been echoed by the European Council.”