|Author (Corporate)||Council of the European Union|
|Series Title||Official Journal of the European Union|
|Series Details||L 335, Pages 45-60|
|Content Type||Blog & Commentary, Legislation, News, Policy-making|
Regulation (EU) 2022/2578 - adopted by the Council of the European Union on 22 December 2022 - establishing a Market Correction Mechanism seeking to protect businesses and households from episodes of excessively high gas prices in the European Union (EU).
Russia's invasion of Ukraine and subsequent weaponisation of energy supplies added further pressure on prices of natural gas across the EU, and it led to periods of unprecedented price spikes. This Regulation establishes a temporary Market Correction Mechanism (MCM) for orders placed for trading TTF derivatives and derivatives linked to other virtual trading points, to limit episodes of excessively high gas prices in the EU which do not reflect world market prices.
The instrument is automatically activated should the month-ahead price on the Title Transfer Facility (TTF) exceeds €180/MWh for three working days, and the month-ahead TTF price is €35 higher than a reference price for LNG on global markets for the same three working days.
The draft law proposing a cap on gas price was adopted by the European Commission on 22 November 2022. It sought to complement other measures to reduce gas demands and ensure energy security through supply diversification. In particular, it buildt on elements of a draft Council Regulation aimed at addressing high energy prices and security of supply. Considerable disagreement remained when the Council of the European Union discussed this file on 24 November. A political agreement eventually emerged on 19 December 2022, and full adoption took place on 22 December 2022. The Act was published in the Official Journal on 29 December 2022.
|Subject Tags||Energy Markets, Energy Security|
|Keywords||Natural Gas, Security of Energy Supply
|International Organisations||European Union [EU]|