According to a draft text obtained by EUROPE on Monday 21 March, the European Commission is reportedly working on finalising a proposal for a regulation to ensure that the EU will have sufficient gas reserves before the next winter in the event of a disruption in Russian gas supplies.
“Since supply disruptions of pipeline gas may occur anytime, measures regarding the filling level of Union storage sites have to be introduced to ensure supply for the winter 2022/2023”, the document stresses.
It also states that “the escalation of the armed conflict in Ukraine since February 2022 has led to unprecedented price increases” which “are likely to fundamentally change the incentives to fill storage facilities in the Union”.
Taking the form of amendments to two existing EU regulations (Regulation 2017/1938 on security of gas supply and Regulation 715/2009 on conditions for access to the natural gas transmission networks), the draft addresses three components related to gas storage: the obligation to fill storage facilities, storage certification and tariff rebates.
National reserve filling trajectories
With regard to the former, Member States would be required to ensure that storage facilities on their territory are filled to at least 90% of their capacity by the 1 November 2022.
To this end, the draft plans to assign intermediate targets to them, thus forming national trajectories for filling storage facilities.
The competent authorities would be responsible for monitoring the filling of storage facilities at the end of each month and for reporting regularly to the Commission's ‘Gas Coordination Group’ to ensure that national trajectories are respected.
If a Member State’s filling rate is more than 2 percentage points below its trajectory targets, the competent authorities would be obliged to take immediate action to increase this rate.
In case of “substantial and sustained” deviation from the filling trajectories, the draft states that the Commission will address a warning to the Member State and recommend immediate action.
If the deviation is not significantly reduced within one month from the date of the warning, the Commission will take “a decision of last resort to oblige the Member State to take measures” taking into account “the specific situation of the Member State, such as the size of the storage facilities in relation to the domestic gas consumption or the importance of the storage facilities for security of supply in the region”.
In the event that a Member State is unable to reach the target of at least 90% by November due to technical problems, it would have the possibility to reach the target at a later stage, provided that it explains the delay to the Commission before the 1 November. The filling target must nevertheless “be met as soon as technically possible and no later than on the 1 December in order to ensure the security of supply for the winter period”, the document stresses.
For the years 2023 onwards, the storage trajectories would be defined by the Commission through a delegated act.
Promoting storage
The draft also contains a chapter on how Member States can promote gas storage by taking “all necessary measures”, provided that these are “limited to what is necessary to achieve the filling target, clearly defined, transparent, proportionate, non-discriminatory and verifiable”.
They must not unduly distort competition or the proper functioning of the internal gas market nor jeopardise the security of gas supply of other Member States or the Union, the document further states.
Among these measures, Member States may in particular: - impose an obligation on gas suppliers to store minimum volumes of gas in storage facilities; - provide financial incentives for market participants or compensation; - adopt effective instruments to oblige storage capacity holders to use or release unused reserved capacity.
The Commission also plans to apply a 100% discount to entry and exit tariffs for transport capacity to and from storage facilities.
Solidarity mechanisms
In order to share the burden of storage among Member States, the draft also provides for solidarity mechanisms between countries without and those with storage facilities.
Member States without storage facilities should therefore ensure that agreements are concluded between market participants and storage operators in Member States with facilities. These agreements would serve to ensure the use, by the 1 November, of storage volumes in these Member States corresponding to at least 15% of the annual gas consumption of those EU countries without storage facilities (the percentage is in square brackets and could therefore still change).
Certification
In order to “ensure that potential security of supply risks resulting from influence over the critical storage infrastructure can be excluded”, Member States should also ensure that each storage system operator is certified by the regulatory authority - or other competent authority designated by the Member State concerned - within 100 working days from the date of entry into force of the regulation.
The regulator would be required to refuse certification “if it is demonstrated that a person which directly or indirectly controls or exercises any right over the storage system operator (...) may put at risk the security of energy supply or the essential security interests of any Member State or the Union”.
Next steps
According to our information, the Commission is expected to present the final version of this proposal for a regulation on Wednesday in order to feed into the discussions between the 27 heads of state or government of the Member States on Thursday 24 and Friday 25 March, during a European Council meeting dedicated to energy.
On Monday afternoon, Commission President Ursula von der Leyen chaired a policy debate of the College of Commissioners focusing on the energy situation and food security in the context of the war in Ukraine, in preparation for the College’s weekly meeting on Wednesday.
Earlier in the day, she met by video conference with a number of executives from some of Europe’s energy groups active in oil and gas to discuss diversifying the EU’s supply sources, announced Eric Mamer, the Commission’s chief spokesman.
See the draft project: https://aeur.eu/f/vn
See its annexes: https://aeur.eu/f/vo (Original version in French by Damien Genicot)