ICIS EXPLAINS: EU legislators make progress on gas storage rules but market still awaits 2025 targets clarification

• Lack of clarity around EU storage targets 2025 likely to persist
• Ambiguous wording in proposals may apply to 2025, but depends on outcome of negotiations
• Parliament committee to vote on 24 April

LONDON (ICIS)–The EU’s 2025 storage filling targets remain unclear at the start of the injection season but accelerated efforts to adopt negotiating positions may signal policymakers’s will to find a speedy compromise.

“At this stage, the implementation date of the regulation is still being discussed within the Council and is afterwards still subject to negotiations with the Parliament. Therefore, it is an ongoing discussion between member states for the moment and no decision has been made yet,” an EU official told ICIS about whether new rules were likely to apply to 2025.

EU countries’ representatives signed off an approach to amending the bloc’s gas storage rules on 11 April, agreeing to extend targets for two more years but introducing greater flexibility in how countries meet targets.

This agreement is a step forward, but negotiations cannot begin until the European Parliament signs off its position in early May.

An open question is whether the law’s implementation date could be moved forward, changing rules for 2025.

While the TTF Summer ’25 premium to the following winters was as much as €6.4/MWh in January, the summer contract expired at a premium of €0.05/MWh on 31 March, ICIS data showed.

The TTF Q3 ’25 premium over Winter ’25 collapsed after 31 March, flipping to a discount of €0.025/MWh on 7 April. The spread widened over the following week, with ICIS assessing the front winter €0.7/MWh above the front quarter on 15 April.

Poland, which holds the rotating presidency of member states until June, has expressed a desire to reach a provisional deal by the end of its mandate, but the timescales remain uncertain.

MARKET IMPACT

Industry association Eurogas called for any new provisions to be made clear and communicated no later than the end of June 2025 in a position paper on 10 April, saying uncertainty around changes to the November 2025 target “creates additional challenges for market operators in making informed decisions.”

Eurogas also called for more clarity around lower targets, postponement of deadlines and how flexibility for filling trajectories could work.

The body called for the Commission to specify flexibilities in advance to improve predictability for market participants and to confirm how any deadlines would be postponed “rather than making last-minute decisions that could disrupt trading strategies.”

EXTENSION NEGOTIATIONS

Because the gas storage regulation is what is known as ordinary legislation, it must be agreed between the EU’s co-legislators.

This means the Council of the EU, comprised of the member states, and the European Parliament will both adopt positions stemming from the European Commission’s initial proposal and then negotiate a compromise.

The European Commission in March proposed to prolong the targets beyond their existing expiry at the end of the year, alongside guidance for the current filling season.

The guidance for 2025 signalled the Commission would allow more flexibility in how countries replenish stocks, allowing countries to deviate from intermediate targets in 2025 to fill stocks “at optimal purchase prices”.

The Commission said it would consider market developments and those effects before deciding on any enforcement steps, but that the November target was essential to ensure security of supply.

The guidance reconfirmed that if a country missed the 90% 1 November target, they should strive to reach it in December and so on – provisions that have been in place since the rules were introduced in 2022.

COUNCIL POSITION

The text agreed on 11 April is the Polish presidency’s basis for negotiations with the European Parliament.

EU countries’ representatives in the Coreper committee signed off the document, the result of multiple drafts based on negotiations at expert level.

The agreed text does not specify an implementation date for the amended rules to enter into force.

The Council proposes allowing countries to meet the 90% target on any date between 1 October and 1 December and allowing countries to deviate from the target by up to 10 percentage points in “unfavourable” market conditions.

The deviation would be allowed under unfavourable market conditions, including examples “such as indications of possible market manipulations, or of trading activities hindering cost-effective storage filling”.

The examples of unfavourable conditions include market manipulation and trading activities, which suggests a continued view among policymakers that the market itself it part of the problem. This may signal further interventions and continued uncertainty.

It also makes explicit that intermediary targets are indicative.

PARLIAMENT POSITION

As the Council wrapped up its work ahead of negotiations, the European Parliament’s committee on industry, research and energy (ITRE) held its first debate on the Commission’s proposal on 9 April.

The appointed rapporteur, the committee’s chair Boris Budka, is tasked with steering the file through the Parliament. His initial recommendation may no changes to the Commission’s proposed text, but committee MEPs proposed many amendments.

Budka and shadow rapporteurs – representatives for the Parliament’s other party groupings – are now working to find a compromise text from proposed amendments.

The views of largest political groupings – representing around two-thirds of seats – were aligned, in support of lower filling targets and greater flexibility.

This signals a speedy resolution to the parliamentary process.

An EU official confirmed be put to a committee vote on 24 April and if approved can move to a vote by the wider European Parliament in the plenary session from 5-8 May.

The centre-right EPP group called for the rules to apply for 2025.

Andrea Wechsler told the committee that “we call for the immediate application of this regulation in 2025, upon publication, and not 2026”.

The EPP view was very similar to the Council’s final mandate, calling for a return to market-based mechanisms, with an 80% target, flexible deadline between October and December, and removal of filling trajectories.

The centre-left S&D also advocated for lower targets and abandoning the intermediate targets, but called for punitive measures for failing to reach the targets to help ensure compliance.

The Parliament and the Council can then begin trilogue talks once both groups have finalised these negotiation positions, aimed at finding a compromise between both versions.

OPEN QUESTION

While the Polish presidency’s stated aim is to find an agreement by the end of June, any delay on either side or protracted negotiations risks additional delay and further uncertainty.

Another risk is that market participants anticipate changes and delaying injections, causing prices and demand to spike later in the summer.

While some EU countries such as Germany have called for lower targets, shippers still need to inject.

Germany’s ministry of economy and climate protection (BMWK) told ICIS it supported less rigid storage filling requirements but expected market participants to meet their obligations to fill stocks.