The European Union Monday concluded two months of heated talks over how to protect households from rising energy prices — but some analysts argue the bloc’s solution is unsustainable and might not withstand the realities of a 2023 gas supply crunch.

EU members compromised by adopting a “dynamic” cap on the price that can be bid for front-month gas contracts on Europe’s benchmark trading facility.

The level at which the cap is triggered was lowered to 180 euros per megawatt hour, after an initial proposal of 275 euros per megawatt hour was criticized as far too high by countries including Poland, Spain and Greece.

The 180 euro limit must be surpassed for three working days on the Dutch Title Transfer Facility (TTF), and it must be 35 euros per megawatt above the global reference price for liquefied natural gas over the same period.

Several conditions were inserted to allay the concerns of members such as Germany, which had argued that the scheme could result in gas shortages next year. These clauses prompt an automatic suspension of the cap and include the dynamic bidding rate dropping below 180 euros per megawatt hour for three consecutive working days, or the European Commission declaring an emergency.

Germany eventually voted in favor of the so-called “market correction mechanism,” but the Netherlands and Austria abstained.

Austria’s ministry for climate action said in a Tuesday statement that while it was “confident that the market correction mechanism can play an important role to avoid extreme spikes in European gas prices, the last minute extension of the mechanism on more gas hubs than the TTF does issue some concerns.”

The ministry noted that “there are some risks that the necessary safeguards are undermined by this extension.” Austria depends on Russian gas.

Rob Jetten, Dutch energy minister, said that the mechanism remained “unsafe” despite the latest improvements. He flagged that it could disrupt the European energy market, risk security of supply and have wider financial implications.

“From its inception, we have been very clear about this mechanism: it does not solve the core problem,” he said, adding that the Netherlands’ concerns were shared by the European Central Bank and by ICE (Intercontinental Exchange), the operator of the key natural-gas market in Europe.

The ECB earlier this month said “the current design of the proposed market correction mechanism may, in some circumstances, jeopardize financial stability in the euro area.” It declined to provide further comment to CNBC following the EU announcement.

ICE said in a statement it had “consistently voiced concerns” about the destabilizing impact of a price cap. It added that it would now review the details of the EU announcement to see whether it “can continue to operate fair and orderly markets for TTF from the Netherlands as per our European regulatory obligations.”

Piper listed two possible areas of additional upcoming demand: China and Europe. Beijing this month abruptly relaxed the zero-Covid policy it pursued this year. Europe has meanwhile managed to get its gas stores near-full for this winter by continuing to import Russian gas supplies — but plans to drop this intake drastically in 2023.

Europe and Asia remain net oil and gas importers, Piper continued, which means that intense competition for spot cargoes lies ahead. Around 70% of liquefied natural gas (LNG) is tied up in long-term contracts, leaving 30% available on a spot basis.

In a Tuesday interview with Reuters, Norway’s prime minister Jonas Gahr Støre said he did not expect more Norwegian LNG to be exported outside of Europe as a result of the new EU measure.

But Piper said, “There is no motivation for spot LNG carriers [other] than the highest price. So volumes could go up elsewhere, and [European] security would be jeopardized.”

Janko Lukac, senior analyst at Moody’s Investors Service, echoed this sentiment to CNBC: “The efficiency of an unilateral cap on purchase prices from the EU is highly uncertain.”

“LNG markets globally and structurally will be short for the next couple of years. Hence, if an international buyer is willing to pay a higher price, Europe runs the risk that the respective volumes will go to another buyer,” he said.

Kadri Simson, European commissioner for energy, said the initiative would “take away the war premium, the mark-up compared to global LNG prices, that Europe pays” due to pricing on the Dutch TTF.

Tinne Van der Straeten, Belgium’s energy minister, said the move would ensure security of supply while protecting citizens and the economy from higher prices.

Investec’s Nathan Piper also said that there were strong reasons why Europe needed to bring down gas prices beyond the strain on households.

“Very high gas prices for multiple years will have major impacts on the competitiveness of European industry. The U.S. gas price is a fraction of Europe’s because they are self-sufficient, so industry could move to where input costs are lower,” he said. “That means a long-term risk for Europe and the U.K. if energy costs can’t come down.”