The European Union is planning a new energy procurement mechanism that will appoint a central market operator to manage collective fuel purchases for member states.
European Commission President Ursula von der Leyen announced the initiative during a speech to the European Parliament on Tuesday, stating that the bloc faces a fresh energy crisis less than five years after the previous disruption caused by Russia's war in Ukraine.
According to a report by Bloomberg, the proposed market operator will take a central role in organizing joint energy procurement across the 27-member union. Von der Leyen told lawmakers that the European Commission wants to expand collective buying beyond natural gas to include other energy sources.
The European Commission acts as the executive branch of the European Union, responsible for drafting policy and managing shared programs. The European Parliament forms the bloc's legislative body, where elected representatives from all member countries debate EU policy and legislation.
She said the Commission aims to upgrade the joint purchasing framework to a next level. Rather than simply matching supply and demand, the new plan would aggregate buyer demand and delegate collective purchasing directly to a designated market operator. She did not specify how the operator would be chosen or detail its exact responsibilities.
The existing EU mechanism was created to gather the requirements of European buyers and link them with available suppliers, aiming to secure lower prices and strengthen supply security. However, its effectiveness has been questioned after the volume of finalized transactions failed to meet initial expectations. Several major European energy buyers opted to continue using their existing bilateral supply agreements instead of relying exclusively on the shared European framework.
Rising prices and supply disruptions
Under the updated model, the Commission is pursuing an active central operator capable of pooling demand and completing energy purchases on behalf of all participating members.
The initiative comes as energy prices rise once again amid ongoing disruptions to oil and natural gas shipments moving through the Strait of Hormuz, Bloomberg reported. The Strait of Hormuz is a narrow waterway located between Oman and Iran that serves as a critical choke point for international petroleum transport.
Upcoming summit and demand reduction
The issue of escalating energy costs is expected to be a primary topic when European leaders assemble in Brussels next week for a scheduled summit. Brussels, the capital of Belgium, serves as the main administrative hub for the European Union.
European Energy Commissioner Dan Jørgensen has called on member states to evaluate measures to curb energy consumption. However, potential interventions capable of delivering an immediate reduction in prices are viewed as limited.
