European Union countries are considering authorising the regulator to allow more flexible targets for gas storage if the price of the fuel soars due to speculation or market manipulation.

The proposed changes to the EU's storage regulation include a provision authorising the European Commission to increase the already planned deviation of 90 percent by five percentage points from the storage target.

Such a move could be made for one filling season "in the event of persistently unfavourable market conditions", according to the proposal drafted by Poland, which has been shared with other EU countries and is available to Bloomberg News.

Some EU countries are pushing for laxer gas storage targets

The regulation, which the 27 EU member states are discussing, was presented by the Commission at the beginning of March. The aim is to extend the 90% target for gas storage until 2026 and 2027.

While some countries are pushing for this to include the filling target for 2025, the latest draft does not address their needs.

The extension of the EU gas storage targets, which were introduced during the energy crisis following the Russian invasion of Ukraine, is intended to provide Europe with energy security through a cold winter. However, some countries are complaining that the rigidity of the target could lead to market speculation as traders expect to buy before the deadline.

Discussions within the EU

A combination of colder weather, low wind power generation and the loss of Russian supplies via Ukraine has led to a faster depletion of gas stocks in Europe this year. The lack of clarity over EU policy is causing market uncertainty just as injection into storage began yesterday, 1 April. This is driving up prices and widening the spread between summer and winter contracts, which will most likely delay the build-up of stocks.

In recent weeks, the EU member states have already been discussing changes to make the targets more flexible and reduce the costs of replenishing reserves. The changes already include replacing the deadline of 1 November with a longer period from 1 October to 1 December.

In addition, each member state will be allowed to deviate from the gas storage targets by up to five percentage points over the next two years if market prices drive up the costs of filling excessively.

What happens now

Traders are watching the debate closely to see if the final version of the draft regulation changes the framework for the current filling season.

The new amendments will be discussed by the member states as soon as possible. The draft could then be submitted to the individual countries for approval as a common position of the Member States on 11 April. Power2market will stay tuned for you.