The European Union is set to propose maintaining mandatory targets for refilling gas storage facilities, despite calls from several member states, including Germany, to make the rules more flexible. The proposal will be presented this week, according to two officials from the European Commission.
The EU introduced emergency gas storage rules during the 2022 energy crisis, following Russia’s invasion of Ukraine, to prevent supply shortages. Under these rules, EU countries are required to ensure their gas storage facilities are 90 percent full by November each year. This measure was aimed at guaranteeing sufficient gas supply during the winter and mitigating the risk of price spikes.
However, some countries argue that the mandatory targets are now contributing to higher energy prices. They are pushing for more flexibility on both the annual storage goal and the related interim monthly targets. The debate comes at a crucial time for the EU, which last week unveiled its Clean Industrial Deal plan to help struggling industries such as steel, cement, and paper, which face persistently high energy costs. EU companies currently pay double the energy prices of their U.S. counterparts.
Laura Page, an analyst at the Kpler commodities platform, noted that the EU’s gas supplies are more depleted this winter than in 2022 and 2023, following a cold spell and the loss of Russian gas through Ukraine last month. This has put additional pressure on Europe to import more liquefied natural gas (LNG) this summer, increasing competition with Asia and keeping prices high, which is challenging for industries. Currently, EU gas storages are 39.5 percent full.
The push to meet storage targets has led some countries to subsidize gas purchases. An anonymous gas industry insider revealed that 10 EU countries, along with the United Kingdom, will spend a total of €30 billion this year to fill and store gas.
This has raised concerns among EU capitals. At a meeting of member state envoys in Brussels earlier this month, several countries, including Germany, Italy, Austria, Denmark, Spain, Greece, the Czech Republic, France, and the Netherlands, expressed concerns about the current rules. They called for more flexibility ahead of the upcoming winter or for the targets to be made voluntary.
Despite these concerns, the Commission’s proposal will keep both the interim monthly targets and the final November target mandatory. One official from the Commission stated that the new proposal will offer more flexibility and “breathing space” for meeting the interim targets but will maintain the overall obligation to meet the November target.
The EU’s Clean Industrial Deal also mentions that it will consider “more flexible rules” for gas storage, though it did not provide further details. The proposal aims to “reduce system stress and avoid market distortions related to gas storage refilling,” while supporting refilling at more favorable purchasing conditions and ensuring supply security.
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