Netherlands Seeks to Scrap EU Gas Storage Mandates

The Government of the Netherlands is pushing the European Union to scrap gas storage mandates after spending approximately 1.14 billion dollars to build inventories this summer. Climate Minister Stientje van Veldhoven argued in a letter to Parliament that the current EU system is inadequate because it bases targets on storage capacity rather than consumption, which unfairly burdens governments instead of market participants.

The filling season faced significant challenges due to soaring natural gas prices and supply disruptions in the Strait of Hormuz following the Iran war. These factors created a backwardation market structure that discouraged the holding of supply. Consequently, the Netherlands expects to miss its winter filling targets.

Across the region, energy security remains precarious. The Federal Government of Germany is considering expanding its Long Term Options autumn tender to incentivize traders to increase storage. As of September 24, German storage capacity was only 57% full, a historically low level that has prompted warnings of potential winter shortages.