Sources say that EU countries will discuss relaxing gas storage targets

EU sources said that the countries of the European Union will discuss on Thursday the request from some governments for the relaxation of the gas storage targets. This is because the costs to fill Europe's caverns with gas this year are increasing.

Gas Infrastructure Europe's data show that EU gas storage facilities are less than half-full after cold weather conditions and reduced Russian supplies caused a quicker drawdown.

Some governments are concerned about the costs of meeting the EU's binding target to fill storage. All countries must fill their caverns up to 90% capacity by November.

Three EU sources say that benchmark European gas prices reached two-year highs in the past week. A group of countries is expected to raise their concerns at a Thursday meeting of EU member states. Some are planning to ask the European Commission for a softer target in an upcoming proposal to extend the deadlines beyond 2025.

Earlier, the Commission announced that it would propose an extension beyond the deadline of December 31, this year. However, some nations have stated they do not support a continuation of the current rules.

Two sources also said that some nations want to soften the targets this year, possibly by making the intermediate goals for February, may, July, and September optional rather than mandatory.

The government is concerned that setting a deadline to fill the storage tanks could lead to price increases by sending a signal to the market saying that Europe must buy more gas before a certain date.

A second concern is how to recover the high costs associated with filling up storage before winter.

Germany introduced a tax on gas sales in order to cover its high costs for filling up its storage facilities with non-Russian natural gas by 2022. However, the measure was later scrapped after it received criticism from its neighbors.

(source: Reuters)