EU to Propose Extension of Gas Storage Targets Despite Market Concerns
The European Union is set to propose an extension of its gas storage targets until 2027, despite growing concern among member states that the rules are contributing to market speculation and artificially inflated prices, Bloomberg reports.
The proposal, spearheaded by the European Commission, the EU’s executive branch, is expected to be formally announced later today.
According to a draft proposal seen by Bloomberg, the Commission will maintain the existing mandate requiring gas storage facilities to be 90% full by November 1st. While this overall target remains binding, the proposal reiterates that interim targets during the summer filling season will be “indicative,” providing a degree of flexibility.
The Commission defends the extension, stating that it provides crucial stability and predictability to the energy market.
“From the security-of-supply perspective, the existence of a storage filling target and filling trajectory fosters predictability and sends important signals to market players,” the draft proposal reads. “At the same time, the overall framework to meet this Nov. 1 target must be flexible enough during the filling season to allow a swift reaction to constantly changing market conditions.”
However, the proposal comes amidst increasing pushback from several member states, including key players like Germany and France. These nations have voiced concerns that the mandatory storage targets are driving traders to speculate on the anticipated rush to refill facilities ahead of the winter heating season, ultimately driving up gas prices.
These countries have been advocating for greater leeway and flexibility in meeting the storage targets to mitigate these market pressures. The Commission, however, has previously emphasized that existing flexibilities are already in place and can be utilized by member states to address their specific circumstances.
Following the Commission’s proposal, the next step will involve negotiations between member states and the European Parliament.
