The European Commission is set to introduce more flexible gas storage targets for EU member states in a bid to reduce price volatility and prevent excessive costs linked to rigid refilling deadlines. This move is part of the upcoming Clean Industrial Deal, a package aimed at bolstering Europe’s industrial competitiveness while addressing energy security concerns.
New Approach to Gas Storage Refilling
Since the EU’s gas storage regulations were implemented in 2022, member states have been required to refill storage to 90% capacity by November, with intermediate targets throughout the year. However, some governments, including Germany and the Netherlands, have warned that these fixed deadlines have contributed to higher gas prices by signaling mandatory purchases to the market.
A draft Commission document, set for publication next week, highlights a shift toward a more “coordinated and flexible” approach with dynamic targets. The goal is to “reduce system stress linked to gas storage refilling,” mitigating the impact of rigid deadlines on price fluctuations.
Market Implications and Regulatory Oversight
Rising gas prices—hitting two-year highs this month—have raised concerns over market speculation. Some policymakers argue that traders are leveraging the fixed refilling schedules to drive up prices. In response, the EU will launch consultations on whether funds and traders active in the EU gas market should be brought under stricter financial supervision frameworks, such as MiFiD and REMIT.
Additionally, the Commission will require member states to develop state aid mechanisms to counter potential gas price spikes, including measures like a gas price cap. The proposed regulatory changes are expected by Q1 2025, setting the stage for further developments in the coming months.
Clean Industrial Deal and Long-Term Energy Strategy
Beyond gas storage, the Clean Industrial Deal seeks to strengthen EU industry by reducing energy costs, particularly for energy-intensive sectors. The deal:
- Reaffirms the EU’s 90% gas storage target by 2040.
- Prioritizes renewable energy expansion and power purchase agreements (PPAs).
- Encourages member states to lower electricity taxes.
- Recognizes that natural gas will remain the primary price setter for electricity in the near term.
As part of its strategy, the EU is also seeking to diversify gas supply sources. President Ursula von der Leyen has proposed securing LNG from “reliable suppliers” at competitive prices, including potential purchases from the U.S. as a means of strengthening transatlantic trade ties.
What’s Next?
With EU gas storage levels dropping to 44% due to winter demand and reduced Russian supply, further regulatory adjustments will be critical. The European Commission’s full proposal on gas storage targets is expected by the end of March, with industry watchers closely monitoring its implications for both gas and carbon markets.