EU agrees gas price cap mechanism

The bloc is moving ahead with revised plans to intervene in the market

EU energy ministers have finally come to an agreement on capping TTF gas prices, with the goal of protecting “citizens and the economy against excessively high prices”. The limit is lower than previously proposed, but with an additional linkage to LNG prices, while the Ice exchange has once again cautioned against the plans. Ministers have set the “market correction mechanism” to be activated automatically if the month-ahead price on the TTF exceeds €180/MWh ($191/MWh) for three working days and if that TTF contract is also "€35/MWh higher than a reference price for LNG on global markets for the same three working days”. Once activated, the mechanism will block gas futures transactions “abov