Council of the European Union

11/24/2022 | Press release | Distributed by Public on 11/24/2022 11:11

Gas market measures to secure and share supply in the EU

Text version

Infographic - Gas market measures to secure and share supply in the EU

EU countries are working in unity to fend off the impact of Russia's war on the energy market and reduce energy dependencies.

  • pipeline gas imports from Russia have decreased from 41% in 2021 to 9% in September 2022 (% of total EU gas imports)
  • imports of liquified natural gas (LNG) have increased to cover 32% of all EU gas imports
  • EU gas storage facilities are filled to 94.8% (November 2022)

However, as prices continue to fluctuate, EU countries have agreed on the content of new measures which take them a step closer to a more integrated EU energy market for gas.

Buying gas together

Russia is no longer a reliable gas supplier and EU countries need to secure gas supply from other sources for this winter and beyond.

Joint purchasing at EU level will help EU countries buy gas at lower prices by pooling demand and avoiding competing with each other.

In practice

  1. Gas companies in EU countries (plus Energy Community partners: Albania, Bosnia and Herzegovina, Kosovo, North Macedonia, Georgia, Moldova, Montenegro, Serbia, Ukraine) make estimates of gas import needs
  2. The EU calculates aggregated demand, identifies total needs and find suppliers
  3. Companies can choose voluntarily to buy gas via the joint EU purchasing platform
  • Mandatory: at least 15% of gas storage of each EU country must be covered by demand aggregation.
  • Russian gas is excluded from joint purchasing.

Sharing supplies and facilities

Solidarity among EU countries is the best insurance against supply shortages. The new rules advance solidarity arrangements between member states and ensure that gas can flow where it is needed.

  • only 6 bilateral solidarity agreements between member states exist today (Germany with Denmark, Finland with Estonia, Estonia with Latvia, Latvia with Lithuania, Germany with Austria and Italy with Slovenia). Yet up to 40 agreements are expected under the security of supply regulation from 2017.

In practice

New rules to apply by default to countries with no solidarity arrangement:

  • if an EU country faces a supply emergency, another country will provide gas and receive fair compensation
  • the rules apply also to countries with LNG facilities and that are not directly connected to the European gas grid
  • countries can request solidarity from others if they lack the supply needed for their electricity system
  • countries can exceptionally limit supply for non-essential gas consumption to supply essential services. Vulnerable households should always be protected.

Limiting price volatility

Gas prices remain too volatile on the markets. New measures limit price fluctuations and help keep prices down.

New benchmark for liquified natural gas

The TTF is not suited for benchmarking LNG prices (as it was developed for pipeline gas). A new benchmark will ensure that the price of LNG is no longer dependent on the TTF and that it better reflects the market reality.

Imports of LNG represent a large and growing part of EU gas imports. Imports from the United States have grown from 0.65 billion cubic meters in January 2021 to 4.63 bcm in August 2022.

What is the TTF? - The title transfer facility is a virtual gas trading platform widely used for gas transactions in the EU, which serves as the main benchmark to define the price of gas.

Groundwork will be done in the next months so that the new index will be available to the market by 31 March 2023.

In addition, a new mechanism is introduced to limit intra-day volatility of gas prices in the TTF.