Taoiseach Micheál Martin hailed the agreement between EU leaders on a cap on imported gas, saying it would lead to market stabilization and reduce price spikes.
Martin said the impact to Irish consumers may not be felt immediately as Ireland received most of its gas through the UK.
“It’s good for Ireland. We export into the European market quite significantly. We see this as progresss,” he told reporters upon arrival for the second day of the EU leaders’ summit in Brussels, reports RTE.
“We import our gas from the UK. Our prices are lower than some across Europe. There may not be an immediate impact other than to say that any stabilisation of the gas market ultimately benefits us,” reported RTE.
EU leaders agreed to go ahead with a cap on the wholesale cost of gas as a way to reduce electricity prices during talks in Brussels, which concluded this morning.
The price cap will be subject to safeguards to ensure that it does not lead to a reduction in gas supply or an increase in gas consumption.
After 11 hours of talks, EU leaders finalized an agreement on a ceiling that European Council President Charles Michel said should soon start to lead to lower electricity prices.
Martin said it is good that Europe has continued to work together and said there has been a drop in gasoline prices since August.
He said the aim of last night’s agreement was the stability of the gas market to ensure that Europe was not subject to price spikes.
“[Gas] has been on a downward trajectory since the high point in August. Nonetheless it’s still much higher than it was before the commencement of the [Ukraine] war,” he said, reported RTE.
He said the benefits of the windfall tax on energy companies not dependent on gas for production would not be felt in Ireland until “early next year”.
EU leaders agreed to what is called a dynamic price corridor when gas is purchased from outside suppliers.
This would mean that wholesale prices could be capped in the event of spikes in the reference price, but in a way that would mean it would still be attractive for suppliers to sell gas in the European Union.
However, the cap would be strongly conditioned to guarantee that it does not reduce the security of supply and that it does not translate into an increase in gas consumption due to lower prices.
The leaders also agreed to pursue long-term joint gas procurement to help fill storage facilities and deepen measures to reduce gas consumption.
The price cap would take effect on the EU’s main gas futures market in Amsterdam. Since Ireland gets its gas mainly through the London market, it is not immediately clear what impact the measures will have.
Officials note that if the price cap encourages suppliers to sell through the London market, this could mean more supply and therefore lower prices.
The summit agreement defined “solid roadmap to keep on working on the topic of energy prices” European Commission chief Ursula von der Leyen told a news conference, reported RTE.
At least 15 EU countries, more than half of the bloc, are pushing for an ambitious price ceiling and are increasingly angered by strikes and cost-of-living protests spreading across France, Belgium and elsewhere. member states.
But the price-cap idea has met resistance from Germany, the EU’s biggest economy, over fears that gas supplies will end up shifting to more profitable markets in Asia.
Several smaller economies are also furious that the German government will not support a gas cap and that it alone has helped its citizens pay high prices with a €200bn windfall.
Finally, the agreed text establishes that a “cost-benefit analysis” of a price cap for electricity generation must be carried out and that the impact outside Europe must be evaluated.
French President Emmanuel Macron, who had gone to the summit saying Germany was isolating itself, expressed satisfaction with the outcome.
“The next two or three weeks will allow the commission to come up with these mechanisms” to implement them, reports RTE.
He said that he sent a “very clear signal to the markets of our determination and our unity”, reported RTE.
German Chancellor Olaf Scholz said “good progress” had been made.
There was, however, no hidden general Franco-German discord that is simmering. This became more apparent on Wednesday when the two countries delayed a regular meeting between cabinet ministers.
But French Economy Minister Bruno Le Maire tried to downplay fears of a breakup in the heart of Europe, telling the Frankfurter Allgemeine Zeitung newspaper that “no one can divide the Franco-German couple.”
As he said, a “strategic redefinition” of bilateral relations was needed to create “a new alliance.”
In another sign that the two disagreed, France did not consult Germany before agreeing with Spain and Portugal to demolish a planned gas pipeline that Berlin has been pushing for years.
The leaders of the three countries met just before the summit and “decided to abandon the MidCat project and instead create, as a matter of priority, a Green Energy Corridor linking Portugal, Spain and France with the EU energy grid. “.
The MidCat, a project that emerged ten years ago, required the construction of an internal gas pipeline to connect the gas terminals in Spain and Portugal, through France, with the European networks that supply Germany, among others.
In its place, they said, would be a submarine pipeline, called BarMar, from Barcelona in Spain to Marseille in France. Initially it will be used for natural gas but, over time, increasingly for hydrogen, which is more climate-friendly.
But the agreement published by Macron and his Spanish and Portuguese counterparts did not set a timetable for BarMar’s completion and did not say how it would be financed, leaving experts skeptical.
In another nod to Germany’s concerns, the energy summit agreement supported joint purchases by EU energy giants to impose cheaper prices to replenish stocks, as long as “national needs” were taken into account.
It also set limits to “preventing increased gas consumption”.
Another point gives the executive arm of the EU the power to establish a tariff “corridor” on the main European gas indices to intervene when prices get out of control.
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