Ursula von der Leyen proposes creation of strategic gas reserves for EU

Leaders of European Union countries may receive a proposal to create joint strategic reserves of natural gas. The initiative was put forward by European Commission President Ursula von der Leyen, who is calling for this option to be considered against the backdrop of alarming forecasts regarding a possible gas shortage in winter.

Risks for the winter season

Currently, the level of gas storage facilities in Europe is at a record low. Usually, commercial companies replenish these facilities throughout the year, but this year the situation has changed due to the war in Iran. As a result, this has undermined market incentives to accumulate reserves, leaving the European Union unprepared for the onset of the cold season.

Format of future measures

For now, diplomatic representatives do not know what specific form this initiative will take. However, one EU senior official characterised this idea as a long-term measure aimed at mitigating the consequences of future risks to energy supply. This approach is similar to the one already used for oil and petroleum products.

Documents containing a detailed description of plans for November to review the EU gas supply security system envisage measures to encourage companies to manage crisis situations more effectively. However, these materials do not contain direct support for the creation of strategic reserves that governments would have to replenish to an established level to compensate for supply shortfalls regardless of the market situation.

Reaction of EU leaders

Two diplomats reported that a separate European Commission proposal to create a pan-European mechanism for joint energy purchases did not generate enthusiasm among EU leaders.