Protection of the energy market against manipulation: deal with Council

The new law seeks to boost market transparency and integrity

regulatory bodies' role enhanced and EU dimension strengthened

Response to the energy crisis exacerbated by Russia's invasion of Ukraine

Legislation aiming to tackle energy market manipulation by strengthening transparency and oversight was informally agreed between MEPs and the Spanish presidency of the Council, on Thursday.

The legislation informally agreed upon on Thursday introduces new measures to better protect the EU's wholesale energy market, making the energy bills of European households and businesses more secure from potential short-term market price fluctuations.

The law introduces a closer alignment to EU rules on financial markets’ transparency, covers also new trading practices, such as algorithmic trading, and strengthens provisions on reporting and monitoring to protect consumers from market abuses.

Timely and transparent information dissemination

During negotiations, MEPs pushed to reinforce the EU dimension and the supervisory role of the Agency for the Cooperation of Energy Regulators (ACER). The Agency will be tasked to adopt decisions on inspections, requests for information and authorisations of Inside Information Platforms (IIPs) and Registered Reporting Mechanisms (RRMs).

During investigations concerning cross border cases, if the Agency does not receive the information requested, it would be able to impose periodic penalty payments. Such cases would be triggered in case of suspicions of market abuse affecting at least two Member States.

Upon request from a national regulatory authority, ACER can provide operational assistance pertaining to investigations. MEPs also secured the integration in the updated legislation of mechanisms that oversee how the price of liquefied natural gas (LNG) is determined.

Quote

"I am very pleased with this outcome. REMIT is a very important legislative tool in our efforts to prevent and fight malpractices in the energy market", said lead MEP Maria da Graça Carvalho (EPP, PT)."With this agreement, our European consumers, as well as small operators, will be served better. We will have stronger energy markets", she added.

Next steps

The informal agreement will now have to be formally endorsed by both Parliament and Council in order to become law. It will be put to a vote in the Industry, Research and Energy committee during a forthcoming meeting..

Background

In response to the energy crisis exacerbated by Russia's invasion of Ukraine, the European Commission introduced the legislative proposal along with a reform of the Electricity Market Design on 14 March 2023. The proposal updates the Regulation on Wholesale Energy Market Integrity and Transparency (REMIT), established in 2011 to combat insider trading and market manipulation, ensuring transparency and stability in the EU Energy markets.