European Association of CCP Clearing Houses urges the European Commission to exclude a gas price cap from the Clean Industrial Deal

The European Association of CCP Clearing Houses (EACH) joined a coalition of energy and financial market bodies in a letter to European Commission President Ursula von der Leyen backing the European Union’s Clean Industrial Deal but urging that neither the Deal nor the related Action Plan on Affordable Energy Prices includes a wholesale gas price cap or similar market correction tool. The signatories argue that an artificial cap could undermine Europe’s energy security by weakening confidence in the Title Transfer Facility (TTF) benchmark and reducing Europe’s ability to attract liquefied natural gas cargoes, while also impairing hedging and liquidity in energy derivatives markets. They warn this could widen bid-ask spreads, increase margin requirements and create financial stability risks for central counterparties, with trading potentially migrating to non-centrally cleared over-the-counter markets or venues outside the EU. The letter cites that, as of 5 February 2025, Europe had contracted 26% of needed LNG supplies through 2040 under a Fit for 55 demand outlook, with 31 LNG contracts totalling 649 billion cubic metres, versus Asia’s 117 contracts totalling 1,519 billion cubic metres, and refers to European Central Bank and European Securities and Markets Authority concerns about similar risks linked to the earlier Market Correction Mechanism. The coalition calls for policymakers to engage with industry and European supervisory authorities to develop a more complete evidence base before taking decisions on price caps, and offers to contribute to discussions on alternative approaches that preserve transparent price formation and market functioning.