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(Bloomberg) — European Union energy lobby groups called for more flexibility in reaching the bloc’s natural gas storage targets, to avoid market pressure during the summer refilling season.
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The statement by Eurogas and the International Association of Oil & Gas Producers comes as EU energy ministers gather for an informal meeting in Cyprus on Wednesday, with the agenda featuring discussions on energy security. Governments in the region are seeking to alleviate the impact of rising fuel prices after the US-Israeli war on Iran triggered the most serious oil supply disruption in history.
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The EU’s dependence on fossil fuel imports makes it susceptible to price shocks, and the region’s benchmark gas price has risen almost 50% since the war started at the end of February. The European Commission has already told member states to start filling storage sites early in order to avoid competition for supplies that could cause a spike in prices over the summer and make use of the the flexibilities offered by EU law.
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“To maximize price relief, flexibilities should be activated by the commission and member states as soon as possible, early in the storage season,” the lobby groups said in the statement on Wednesday.
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EU law allows nations a 10 percentage point deviation from the goal of filling facilities to 90% ahead of the heating season. A further 5 percentage point flexibility could be used in the event of unfavorable market conditions.
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Eurogas and IOGP also urged any emergency measures to remain targeted, proportionate and temporary.
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“Initiatives such as demand aggregation or diversification approaches should remain voluntary in nature and must not distort wholesale price signals,” they said. “Clear and credible price signals are indispensable to attract natural gas, and crude oil supplies in global markets, particularly in a tightening market characterized by intense competition for LNG cargoes, including by Asian buyers.”
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The lobby groups also repeated their calls for amending the EU landmark regulation to tackle methane emissions. The commission has been resisting pressure to weaken the law, instead planning guidance to member states not to impose fines on companies that are unable to comply with the rules on the powerful greenhouse gas.
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