Industry association Energy Traders Europe wants the European Commission to rule out a possible extension of the EU's gas storage obligations past the end of 2025 in order to "restore some calm" to the market, gas committee chair Doug Wood told Argus.
While the association recognises the drivers behind the introduction of the original legislation in 2022, it is "concerned about the distortive nature of some of these measures, and strongly recommended they should not be sustained into times of normal market operation", it told Argus. Since the energy crisis in 2022, additional LNG import capacity in Europe has come on line, interconnection capacities between member states have increased, more renewable electricity capacity has reduced the call on gas-fired power generation and industrial demand has dropped or "become more responsive", meaning the need for "ongoing strict interventionist measures is no longer present", the association said.
The continued emphasis on storage filling as opposed to a "broader approach to security" has led to a "concentration of activity" in this area, which in combination with other factors has driven summer prices above winter, the association noted. This leaves EU member states "trapped between having a very expensive form of security, or saving money but leaving storage under-filled", Wood said.
But some member states are "fuelling further uncertainty" by calling for the extension of these storage obligations past the end of 2025, but with more flexibility or exemptions, the association said. This "creates the greatest uncertainty for those who would plan for storage injections", and the risk of further interventions, or "worse still, unpredictable responses by member states in how they choose to apply obligations", will deter commercial storage filling, Energy Traders Europe said. This risks extending the uncertainty to future years, and member states will repeatedly need to "choose between filling storage using non-commercial entities as a distressed buyer, or leaving it empty", it added.
The current situation has made the market "highly volatile", so the most helpful action now "would be to restore some calm by ruling out a possible extension of storage obligations to 2026 and beyond", Wood said.
Many of these points echo similar ones made by gas industry association Eurogas earlier this month. The commission will publish a legislative proposal on the extension of its gas storage regulation before the end of March, according to a document seen by Argus.
