EU proposes new emergency measures totackle soaring gas prices

On October 18, the European Commissionproposed new emergency measures: purchase of natural gas, implementation of aprice limit mechanism for European gas benchmark prices, and coordination ofenergy supply among EU member states to address high gas prices in the EU andensure energy supply security this winter.

Under the new measures, the EU willconsolidate its gas import needs and jointly purchase gas to reduce the risk ofmember states bidding against each other on the global market; establish a newLNG price benchmark by March 2023 and propose a price correction mechanism inthe short term; impose dynamic price limits on gas transactions in the Dutchownership transfer center to prevent extreme price fluctuations in thederivatives market; and, in case of emergency to help member countries obtainnatural gas from other countries.

At a press conference held on the same day,European Commission President von der Leyen said that the EU needs to preparefor the coming winter by filling up gas storage, saving energy and finding newsuppliers. At the same time, investments in renewable energy and infrastructuremust be accelerated.

The measures are of great significance forenergy operators and energy derivatives markets and contribute to the stabilityof the financial system, said Mariade McGuinness, a member of the EuropeanCommission responsible for financial affairs.

These measures still need to be approved bythe EU countries. EU leaders will further discuss these measures at a summit tobe held on 20-21.