Pessimism over ability of EU to agree gas caps plan

Leaders of the G7 nations are to meet on Tuesday to discuss the possibility of lowering international gas prices, amid growing scepticism that EU leaders will be able to agree a plan to cap prices when they meet again in Brussels next week.

Minister for Energy Eamon Ryan was in London on Monday where he met with the British Business Secretary Jacob Rees-Mogg for discussions on the energy crisis. Ireland is reliant on pipelines from the UK for much of its gas and energy needs and there are concerns that shortages in the UK could have knock-on effects here.

Two senior Government sources in Dublin played down the prospects of an EU agreement next week. EU leaders met in Prague last week for an informal summit and said they would try to reach agreement on a plan to cap gas prices at another summit in Brussels at the end of next week. But politicians and officials with knowledge of the discussions said that reaching agreement in such a short time would be extremely difficult.

“It’ll be very difficult to secure agreement,” said one source. “There’s a lot of work to be done. It’s not like flicking a switch.”

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Mr Ryan travels to Berlin for a meeting with the German foreign minister Annalena Baerbock today, before attending a meeting of European energy ministers in Prague on Wednesday, which is due to consider European Commission proposals for a Europe-wide cap on gas prices.

However, differing national priorities mean there is diminishing hope that a deal to impose a cap across the EU will be agreed, though there is likely to be intensive diplomacy in the run-up to next week’s summit.

German Chancellor Olaf Scholz, whose country holds the chair of the G7, the group of industrialised democracies that includes the US, UK, Germany, France, Italy, Japan and Canada, is said to favour a global approach in which a “buyers’ alliance” with big energy importers including Japan and South Korea.

The German view is in conflict with the desire of many EU countries for an immediate EU cap on the price the bloc’s members are willing to pay for gas, while other countries want governments to be able to cover the cost of gas for consumers above a certain price. At the summit last week, it was clear that EU leaders are resolved that something must be done – but there are several different ideas about what it should be.

Other EU countries have also raised concerns about Germany’s plan to spend a further €200 billion supporting households and businesses with their energy bills. In particular, other member states have warned that the German plan could undermine the EU’s single market by granting German firms an unfair advantage.

The G7 leaders are also likely to discuss the latest developments in the war in Ukraine.

Meanwhile, Mr Ryan is also due to bring a memo to Cabinet this morning seeking approval to draft new legislation to enable the Government to deal with an oil shortage.

Ministers have been told that the purpose of the legislation is to strengthen the Government’s ability to respond to a potential severe or prolonged oil emergency, particularly in the context of the current oil markets.”

A spokeswoman for Mr Ryan said the meeting with Mr Rees-Mogg was “constructive” and also covered the possibility of the UK rejoining the North Seas Energy Co-operation Agreement, which aims to prove co-operation on the development of new windfarms and associated infrastructure.

Senior Irish sources said the atmosphere at the meeting was “very positive”, while the Irish side are optimistic that agreements to supply gas will hold even in the event of constrained supply, though they acknowledge that there would be a proportionate effect on imports here.

“If they are squeezed, we would be proportionately affected,” said one person familiar with arrangements.