European Union member states on Friday agreed to give more flexibility to the natural gas storage goals by expanding the period in which countries should have 90% full storage ahead of the winter and could deviate by up to 10% from the filling target.
The EU supported the European Commission’s proposal to extend the gas storage regulation by two years. But EU member states also want more flexibility in reaching the filling target to avoid price spikes if market conditions are tight.
Today, the representatives of the EU member states approved a draft that will serve as the negotiating mandate for the presidency to start talks with the European Parliament on the final shape of the law.
The EU countries propose that the existing binding 90% filling targets should be reached anytime between October 1 and December 1, instead of the current deadline of November 1.
The EU also agreed that in case of unfavorable market conditions – such as possible market manipulations— member states may deviate by up to 10% from the filling target.
The EU negotiating mandate also says that intermediary storage targets for each member state in February, May, July, and September are not binding but only indicative in order to achieve storage filling and predictability while leaving sufficient flexibility for market participants throughout the year.
For months, a group of EU member states, including the biggest economies Germany and France, have argued that to avoid price spikes and market speculation, the bloc should allow more flexibility in its currently binding 90% full-storage target by November 1 each year.
The season to refill Europe’s natural gas storage sites is presenting several challenges to gas traders and operators as high summer gas prices discourage the stockpiling of the fuel.
In these abnormal market conditions – and amid great volatility with tariffs-on-tariffs-off rhetoric – EU member states have two choices in how to approach the refill season. These, as Bloomberg notes, are either governments subsidizing the stockpiling of gas or relying on market forces and possibly paying up for a much higher-priced gas supply if the market further tightens later this year.