The effectiveness of emergency measures to fight the energy crisis extended by 1 year

On 19 December 2023, the Council of the European Union approved the proposal of the European Commission dated 28 November 2023 to maintain the effectiveness of the emergency measures contained in the regulations adopted at the EU level at the end of last year for 12 months longer than originally expected.

Updated on 10 January 2024 

Concerned regulations          

The concerned measures were approved by the Council of the EU in 2022 in response to the war in Ukraine and the subsequent energy crisis. They include the following regulations:

• regulation 2022/2576 enhancing solidarity through the improved coordination of gas purchases, reliable price benchmarks and exchanges of gas across borders,
• regulation 2022/2578, introducing a market correction mechanism to protect Union citizens and the economy from excessively high prices, and
• regulation 2022/2577, laying down a framework to accelerate the deployment of renewable energy.

Reason for the extension

The Council of the EU adopted these acts on the basis of Article 122 of the Treaty on the Functioning of the European Union, according to which it is authorized "in the spirit of solidarity between Member States to decide upon the measures appropriate to the economic situation, in particular, if severe difficulties arise in the supply of certain products, notably in the area of energy."

Despite the fact that the current energy price situation is more stable compared to the situation in 2022, markets remain vulnerable. According to the Commission, the Union should therefore continue to have tools available to fight the crisis, primarily for the purpose of strengthening the security of gas supplies, the resilience of markets, but also more intensive support for the use of renewable energy sources (RES).

Regulation 2022/2576

Regulation 2022/2576 provides a temporary legal framework for measures that can be divided into three main areas. The first area introduces the possibility of the joint aggregation of demand and the joint purchase of gas through the "AggregateEU" platform in which companies established in the EU can participate. The goal of the AggregateEU mechanism is to ensure the improved coordination of gas purchases at the EU level. Congestion management rules in transport networks and transparency platforms for LNG facilities and gas storage facilities can also be included in this area.

The second area of emergency measures under regulation 2022/2576 includes measures to prevent excessively high gas prices through a volatility management mechanism on intraday energy derivatives markets, including the setting of an ad hoc LNG reference price by ACER.

The last area is represented by measures aimed at strengthening solidarity between member states by ensuring fair cross-border distribution of gas in the event of an emergency.

The regulation will now be effective until 31 December 2024.

Regulation 2022/2578

Regulation 2022/2578 introduced the market correction mechanism as an automatic intervention tool in the event of an extreme increase in gas prices. In practice, the correction mechanism consists of the establishment of a price ceiling for the settlement price of TTF derivatives if the following conditions are simultaneously met: (i) the settlement price of the TTF derivative for the next month of gas supply over three working days exceeds the amount of 180 EUR and (ii) the TTF settlement price is higher by 35 EUR than the reference price reflecting prices on international markets during three working days.

In the event of such a situation, ACER will publish a notice of market correction on its website and in the Official Journal of the EU and inform the Commission, the European Securities and Markets Authority (ESMA) and the European Central Bank. The correction mechanism shall become effective on the following day, and orders for TTF derivatives for the next month of deliveries exceeding the given price ceiling shall not be accepted. Although the correction mechanism has not yet been applied, the Commission considers it important to preserve it in view of the fact that the markets remain vulnerable and there have been several cases of significant volatility in the recent period.

The effectiveness of this regulation is extended until 31 January 2025.

Regulation 2022/2577

Regulation 2022/2577 established an accelerated regime of permitting processes for projects aimed at the use of renewable sources and their integration into the system. We also specifically addressed the issue of permitting processes and regulation 2022/2577 itself in this article.

Some measures related to the simplification and acceleration of permitting processes are also part of the revision of Directive 2018/2001 on the promotion of the use of energy from renewable sources (the so-called REDIII), the transposition of which will take place in the member states in the coming months. Since not all such measures have been adopted, the Commission proposes to keep this regulation in force as a complementary tool to support the widespread introduction of RES as a cheaper and more sustainable alternative. We would like to point out that, in accordance with the regulation, the duration of permitting processes is limited to 3 months in the case of solar facilities, 6 months in the case of the modernization of RES facilities, 1 month in the case of heat pumps with an input of up to 50 MW and 3 months in the case of heat pumps using geothermal energy.

The effectiveness of the regulation is extended until 30 June 2025.

The proposal of the Commission was approved

The European Commission's proposal to extend the above-mentioned measures from 28 November 2023 was approved by the Council of the EU on 19 December 2023 (the consent of the European Parliament is not required in this case). You can find more information on the topic, including the individual proposals of the European Commission to extend their effectiveness, on the website of the European Commission.