EU Parliament Committee Backs Softer Gas Storage Rules

The energy committee at the European Parliament supported on Thursday the EU member states’ proposal to give more flexibility to the natural gas storage goals.

The EU is seeking greater flexibility in filling targets before each winter to avoid supply shortages and price spikes.

The EU seeks to expand the period in which countries should have 90% full storage ahead of the winter.

The European Parliament’s energy committee supported a target of 83% full gas storage at any time between October 1 and December 1.

If prices are high, EU member states would be allowed to deviate from the target by up to four percentage points, according to the committee’s position. At any rate, all EU member states should have at least 75% full storage before winter.

The full vote for the European Parliament’s negotiating position on the matter will take place in May.

Earlier this month, 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.

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.

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.

In 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 tightens later this year.

Source: Oilprice.com