The European Commission is actively exploring options to cap or subsidize natural gas prices, a move designed to provide immediate relief to soaring energy costs across the continent. Commission President Ursula von der Leyen announced this potential intervention during a parliamentary address, highlighting the urgency created by escalating tensions in the Middle East, including the near closure of the Strait of Hormuz and shutdowns of regional energy facilities. This crisis has dramatically increased European gas prices, which in turn set electricity prices due to the intermittent nature of renewable energy sources. Von der Leyen emphasized the need to 'reduce the cost impact' for consumers and businesses.

While the EU previously implemented a €180 per megawatt-hour price ceiling for the TTF gas benchmark in December 2022 following Russia's invasion of Ukraine, this intervention was never activated due to its stringent conditions. The current proposal faces significant opposition. Critics, including energy analyst Simone Tagliapietra from the Bruegel think-tank, warn that artificially lowering gas prices would stimulate demand for a scarce commodity, potentially worsening the situation and imposing massive costs on public finances. The debate reflects a fundamental tension between providing short-term relief and avoiding long-term market distortions.

Von der Leyen also called for member states to consider reducing taxes on energy bills, which currently account for 15% of the overall cost, and defended the EU's Emissions Trading System (ETS), which contributes about 11% to average energy bills. She argued the ETS must be modernized, countering calls from states like Italy to suspend it, as doing so would increase gas consumption and vulnerability. The Commission is preparing these proposals ahead of an EU leaders summit next week, aiming to present concrete solutions to the deepening energy crisis.