The Agency for the Cooperation of Energy Regulators (ACER) and the European Securities and Markets Authority (ESMA) published on Wednesday 1 March their respective final assessment report on the effects of the introduction of the ‘Market Correction Mechanism’ (MCM) aimed at capping the price of gas at EU level.
As gas prices were significantly lower in February than in the second half of 2022, the two agencies did not find that the adoption of the MCM had significant impacts on energy markets and security of supply, as previously stated in their preliminary reports of 23 January (see EUROPE 13105/11). However, ACER states that this does not mean that “the MCM will have no impact on financial and energy markets or on security of supply in the future”.
These reports are intended to guide the Commission in its decision to extend the mechanism to financial derivatives traded on other EU Virtual Trading Points, as foreseen in the EU Council Regulation (2022/2578) adopted in December 2022 and which entered into force on 1 February for a period of one year (see EUROPE 13112/28). They also aim to assess whether key elements of the implementation of the MCM, such as the dynamic cap mechanism, need to be revised.
ACER considers that the extension of the MCM to other virtual trading points would not have significant negative effects on the gas markets. Nor does it identify any technical reasons to revise the technical principles of the MCM.
ESMA, on the other hand, is not convinced of the need to extend the MCM to other virtual trading points, given that gas derivatives trading activity is heavily concentrated in the TTF market. The lack of hindsight since the mechanism was introduced does not allow it to provide an assessment of the technical details of the MCM either.
See the ACER report: https://aeur.eu/f/5kq
See the ESMA report: https://aeur.eu/f/5kr (Original version in French by Pauline Denys)