The European Principal Traders Association has joined with a coalition of industry bodies representing the entire energy value chain, market actors and risk managers, regarding mentions of a potential introduction of a price cap in response to the ongoing geopolitical crisis in the Middle East. The associations support European efforts to ensure affordability of energy, strengthen industrial competitiveness and advance the clean energy transition.
The coalition nonetheless respectfully submits that a price-capping intervention could compromise Europe’s energy security, disrupt the functioning of its energy markets and carry significant risks to financial stability, without delivering sustainable price relief for consumers.
Clear and credible price signals are essential to maintain Europe’s ability to secure natural gas and LNG volumes that would otherwise flow to other regions. A price cap would also prevent companies from effectively offsetting their real price risk. This would force market participants to withdraw, ultimately driving up costs for the entire value chain.
The associations stand ready to support the European Commission and Member States in identifying solutions that genuinely improve affordability while safeguarding market integrity.
Read full letter here.