Indeed, we had a very good European Council. We do now have a very good and solid roadmap to keep on working on the topic of energy prices. The Leaders have given the strategic guidance we wanted on the proposal that we have put on the table on Tuesday and that will be discussed by Energy Ministers on Tuesday next week. Let me focus on a few topics that we have discussed intensively.
The first one is the topic of the joint purchasing of gas. Here, Leaders supported very much the idea to allow companies, for the joint purchase, to build consortia and to work together and join forces so to increase our common European Market power for the demand of gas. There is one binding element in it. That is: When, at the beginning, we aggregate the demand, 15% are binding to be aggregated as demand on the market, together as a joint aggregated demand.
The second topic was the focus on how to limit episodes of excessive gas prices. This is the discussion around the benchmark for gas prices, the so-called TTF. We know that the TTF mainly reflects pipeline gas but as we see that the market is shifting and more LNG is coming to the market, the TTF no longer reflects the true market situation. Therefore, we will develop a complementary new index to better reflect the LNG price situation. In the meantime, we are going to establish a market correction mechanism, exactly to limit excessive episodes of gas prices and to make sure that there is a clear order in the build-up of the market. Here, we will work with Energy Ministers to submit a legal proposal to operationalise this market correction mechanism.
Of course, Leaders also discussed a second topic, which is a potential mechanism to limit the influence of high gas prices on the cost of electricity. We had a frank discussion which further clarified, on the one hand, the opportunities and, on the other hand, highlighted the challenges. We will analyse the financial impact on those countries with a lot of gas in their electricity production. What does it mean if we cap the price of gas to reduce the influence of gas on the electricity price? And the other topic which has to be analysed is the flows of subsidised electricity to non-EU neighbours. Here too, we will work together with Member States and with the Council formation to find a well-balanced and common approach on these issues.
The Commission will also come back to the issue of state aid. Next week, the College will adopt a proposal on the prolongation and adaptation of the Temporary Crisis Framework. This will give Member States an improved ability to support their companies in the face of the current crisis, while preserving a level playing field. So common rules for everybody. For example, thanks to the extension of time limits for state support, or new options to support companies reducing their electricity demand. This new revised state aid crisis framework will then be decided on next week in the College.
Moving on to the topic of funding. I just mentioned the state aid opportunities but there is also a strong look at the possibilities to support vulnerable households and vulnerable businesses. We are aiming to make available up to around EUR 40 billion of funds that are still available from the previous MFF. With that, Member States will be able to help those most affected by the energy crisis, be it the vulnerable households or SMEs. But indeed, more is needed to support small and medium companies but also larger industry to deal with the high energy prices.
Here, the topic of investment is very important. The investments can be financed through the European level. That is the REPowerEU vehicle that is right now in the process of being decided on in Parliament. It has already been decided on in Council. So we are moving forward to the trilogue, hoping that this instrument will then be finalised as soon as possible. Here is the possibility for all Member States to have common European funding to invest in their companies, in their SMEs, to help them to make the transition away from fossil fuels to, for example, renewables, cheaper sources of energy and thus prepare for the future.
We had a very good Council on all these topics. I think I will stop here and I will be happy to take questions.
Source – EU Commission