Germany cabinet approves draft gas reserve bill

Germany's government approved a draft bill on Wednesday to create a strategic gas reserve intended to protect the country from emergency supply shocks.

The reserve would hold 24 terawatt-hours of gas, about 10 percent of Germany's storage capacity. It is due to be financed through a surcharge on consumers and, from 2027, would replace mandatory gas storage targets introduced after Russia's full-scale invasion of Ukraine.

Energy Minister Katherina Reiche said the reserve was designed for crisis situations rather than high prices. She said Germany's gas supply was secured for this winter under current assessments, citing diversified supply sources including liquefied natural gas imports.

The Economy Ministry said the measure, which still requires parliamentary approval, would give Germany a buffer against supply shocks and help avert or delay limits on industrial gas use while protecting deliveries to priority users.

The reserve would be controlled by Germany's federal regulator for the sector, which could decide on its use in cases such as sabotage, critical infrastructure failure or other exceptional events.

The ministry said the 24 TWh reserve would match a scenario in which Germany's main gas import infrastructure was unavailable for 30 days. It said the volume would also cover 20 days of interruption to all Norwegian pipeline gas imports or 40 days of shutdown at German LNG terminals.

The scheme is forecast to cost between 247 million and 405 million euros a year over 10 years. The ministry estimated it would add 0.03 to 0.05 euro cents per kilowatt hour, equal to a 0.3 percent to 0.5 percent rise in household bills.

Data from storage tracking platform AGSI shows Germany's gas facilities are 59 percent full, below the EU average of nearly 75 percent and below the legally mandated target of 70 percent by November 1.