Germany, France Push to Lower EU Gas Storage Goal From Next Year

In a significant move that could reshape the European energy landscape, Germany and France are leading a push to lower the EU's gas storage goals starting next year. The proposal, which aims to introduce more flexibility into the current rigid storage requirements, has sparked intense debate among EU member states and energy market participants. The current rules, introduced in 2022 in response to Russia's slashed gas deliveries, mandate that EU countries fill their gas storage facilities to 90% capacity by November 1 each year. However, countries like Germany, France, and the Netherlands have warned that these binding deadlines are pushing up gas prices by creating artificial demand spikes in the summer months.

The proposed changes, which are currently being negotiated among EU member states, would allow for a more flexible timeline. Instead of a fixed deadline of November 1, the new proposal suggests a range of dates between October 1 and December 1 for reaching the 90% storage target. Additionally, the intermediate targets to fill gas storage caverns in the months leading up to November would become voluntary. This flexibility is intended to allow member states to take advantage of more favorable purchasing conditions throughout the year, reducing pressure on gas markets and preventing unnecessary price surges.



The push for flexibility is driven by several factors, including the need to avoid market distortions and reduce the stress in the market. As Commissioner for Energy and Housing Dan Jørgensen noted, "The Commission has said it will be more lenient in enforcing this year's November gas storage target, but that has not soothed concerns among governments concerned about a large bill for filling their storage if gas prices spike." By allowing for a more flexible timeline, member states can avoid the rush to fill storage facilities, which can drive up prices. This could lead to more stable and predictable gas prices, benefiting both consumers and the broader energy market.

However, the proposed changes are not without their critics. Some EU member states and energy market participants have expressed concerns about the potential impact on energy security. As the European Commission noted, "The Commission will continue monitoring the security of gas supply of the EU with EU countries in the Gas Coordination Group, and coordinate any potential measures taken to ensure optimal storage refilling." This suggests that while flexibility is being introduced, there will still be a need for coordination and monitoring to ensure that energy security is not compromised.

Another potential drawback is the risk of market manipulation. As Germany, France, and the Netherlands have warned, the current binding deadlines create an opportunity for market manipulation, as buyers are obliged to purchase large volumes of fuel by fixed deadlines. While the proposed changes aim to address this issue, there is still a risk that market participants could exploit the new flexibility to manipulate prices.

In conclusion, the proposed flexible storage targets offer potential benefits in terms of reducing market distortions and lowering costs, but also come with risks related to coordination and market manipulation. The success of this shift will depend on how effectively the EU can balance flexibility with the need for coordination and oversight. As the negotiations continue, it remains to be seen whether the EU will be able to strike the right balance between energy security and market efficiency.