EU energy ministers admit short-term options exhausted as gas hits €100/MWh

European gas prices crossed €100 per megawatt-hour on Wednesday for the first time since 2022, driven by last-minute buying to fill reserves and supply pressures linked to the war in Ukraine.

Energy ministers gathering in Luxembourg on Thursday broadly acknowledged that neither Brussels nor national capitals had tools left to contain the surge. "We've exhausted most of our short-term options," said one senior European energy official who spoke on condition of anonymity. "What's left is really crisis management."

Irish Energy Minister Darragh O'Brien, whose government holds the EU's six-month rotating presidency, told reporters the bloc lacked "a magic wand to make the price increases go away" and said the focus had shifted to more sustainable measures.

Since the war began, governments have paid €18 billion on tax relief for fossil fuel products. EU energy chief Dan Jørgensen, who warned of a "difficult" winter ahead, dropped his earlier call for consumers and businesses to cut energy use and focused instead on subsidies, reluctantly accepting that fossil fuels could be included provided the support was "targeted and temporary."

Ministers across the table resisted mandatory demand reduction. Finland's state secretary to the energy ministry, Mika Nykänen, said he did not want to limit people and called instead for incentives such as subsidies for home energy efficiency. Swedish Energy Minister Ebba Busch argued high prices "will regulate demand by itself." Polish Secretary of State for Energy Wojciech Wrochna acknowledged demand reduction would affect industry and business but said it did not solve the long-term problem.