Netherlands Pushes to Scrap EU Gas Storage Mandate After $1.14 Billion Bill

The Netherlands has urged the European Union to reconsider its mandatory gas storage rules, arguing the current regime places an undue financial burden on governments. Climate Minister Stientje van Veldhoven told Parliament that the Dutch government alone spent nearly $1.14 billion (1 billion euros) this summer to build up gas inventories, a task she says should be shouldered mainly by market participants, according to a letter cited by Bloomberg and reported by OilPrice.com. The Dutch complaint centers on the EU’s methodology for setting storage obligations, which targets storage capacity rather than adjusting requirements to reflect national consumption patterns. The Netherlands, while a relatively small gas consumer, is a major gas hub and home to the TTF benchmark, giving it a prominent role in European wholesale markets. This summer’s filling season has been unusually expensive and difficult across the bloc as natural gas prices surged after the Iran war and amid a scarcity of LNG shipments passing through the Strait of Hormuz. The price spike intensified backwardation in European gas markets, meaning near-term contracts traded at a premium to later ones — a structure that discourages holding supply for future deliveries. Signs of strain have already appeared: the Dutch gas network operator warned weeks ago that the Netherlands would miss its storage target ahead of winter, an early indicator that Europe may struggle to secure sufficient supplies if winter conditions are severe. Germany is meanwhile examining ways to strengthen market incentives for traders to raise storage, including possibly expanding its autumn tender for Long Term Options (LTOs). Storage levels underscore the worry: Germany, which has the fourth-largest gas storage capacity globally, had stocks at 57% full as of September 24, based on data from Gas Infrastructure Europe. Germany’s gas storage association, INES, has warned that the country risks shortages if this winter proves colder than recent years.