Legal Framework for Security of Gas Supply

The SoS Regulation serves to strengthen the internal natural gas market and to provide for the event of a supply crisis. It defines the responsibilities and duties of companies, national authorities, and the EU Commission. It provides for a comprehensive catalogue of measures and the national implementation of a three-stage escalation system (early warning, alert, and emergency stage) in the event of a supply crisis. In addition, the member states are obliged to define the planned crisis management, including preventive measures, in advance as part of prevention and emergency plans. The prevention and emergency plans are drawn up every four years by the Federal Ministry for Economic Affairs and Energy in cooperation with the gas industry and the Federal Network Agency.

The SoS Regulation has introduced three additional pillars that are intended to further increase the security of gas supply, particularly with regard to the European gas market. These are regional cooperation on common risks, thestrengthening of solidarity between member states in the event of a crisis and greater transparency through the provision of additional information.

Regional cooperation: A central element of the SoS Regulation is the strengthening of risk-related cooperation between the Member States. To this end, important cross-border risks to the security of gas supply in the European Union (EU) are identified and risk groups are defined on this basis. The risk scenarios within the groups are essentially based on the main supply routes relevant for natural gas supply in the EU. The risk groups serve as a basis for enhanced regional cooperation to increase the security of gas supply and enable the agreement of appropriate and effective cross-border measures between all affected Member States within and outside the risk groups along the supply corridors.

Solidarity mechanism between the neighboring Member States: Another central element of the SoS Regulation isthe principle of solidarity, according to which the Member States are obliged to take solidarity measures to ensure the supply of vulnerable customers, e.g. household customers in directly neighboring Member States, in crisis situations. Germany has a special responsibility due to eight directly bordering Member States and Italy, which is indirectly connected via Switzerland.

The SoS Regulation provides for solidarity between Member States as a last resort to maintain gas supply. Member States are only obliged to provide assistance if all available measures to maintain the supply of vulnerable customers have already been implemented in the Member State requesting solidarity. Once a solidarity request is made to the related Member States, they are first obliged to offer to provide additional gas volumes in a market-based manner. To this end, the requested Member States must request voluntary offers from market participants in their own markets and pass these on in aggregated form to the Member State in need.

If the market-based offers are not sufficient, additional non-market-based solidarity measures can be requested. Only in this second stage are the requested Member States obliged to restrict the supply of customers not protected by solidarity in their own country in order to offer the gas volumes released in solidarity to the Member State in need.

The specific contractual and operational implementation of solidarity measures is regulated and recorded in intergovernmental agreements between the competent authorities of the Member States.

Regulation (EU) 2022/2576 is a targeted addition to the SoS Regulation (EU) 2017/1938. It promotes more solidarity through better coordination of gas procurement. The regulation supplements the cross-border exchange of gas and reliable price reference values with generally applicable rules for solidarity cases. The regulation also introduced the European gas price cap.

The EU filling level requirements for gas storage facilities were integrated into the SOS Regulation in Regulation (EU) 2022/1032 of the European Parliament and of the Council of 2022. The aim of the Regulation is to ensure that European gas storage facilities are filled before winter so that they can be used jointly by the EU Member States in a spirit of solidarity. The regulation defines the filling level requirements for the winter and precisely specifies the filling targets and paths. With the entry into force of the Regulation, each Member State is obliged to store sufficient gas before winter. It also facilitates the transfer of gas between individual countries. A new implementing regulation is issued every year to define the respective fill level targets and fill paths for each member state. The EU regulation is valid until 31.12.2025.

The Emergency Plan for Gas for the the Federal Republic of Germany is the national implementation of the SoS Regulation. It contains three escalation levels:

1. Early warning stage:The early warning stage is the first stage of the three-stage gas emergency plan. The BMWE convenes a crisis team consisting of authorities and energy suppliers.Gas suppliers and operators of gas pipelines are obliged to regularly assess the situation and report to the federal government. The gas supply is not yet secured through state intervention, but through market-based mechanisms of the market players (gas traders and suppliers, transmission and distribution system operators), such as the use of flexibility on the procurement side, the use of gas storage facilities, the optimization of load flows or the request for external balancing energy.

2. Alarm level:In the second stage of the gas emergency plan, the state is still not intervening in the market. Securing supply remains in the hands of the market players, who have the same instruments at their disposal for this purpose as in the first stage. In contrast to the early warning level, the German government takes additional measures to ensure security of supply in the alert level. These include, for example, the provision of higher credit lines to ensure that gas storage facilities are filled and measures to reduce gas consumption in Germany.

3. Emergency stage:If the market-based instruments from the first two stages of the emergency plan do not lead to a stabilization of the supply situation, i.e. there is an “exceptionally high demand for gas, a significant disruption to the gas supply or another significant deterioration in the supply situation”, the government can declare the emergency stage by decree. In this case, the Federal Network Agency becomes the “federal load distributor”. The state intervenes directly in gas distribution in close coordination with the network operators.

Certain groups of consumers enjoy the following benefits pursuant to Art. 53a EnWG special legal protection. These include households, social institutions (e.g. hospitals) and gas-fired power plants that also serve to supply heat to households. For them, a secure supply of gas must be guaranteed until the end.

We are currently still on alert. This level has been in place since June 23, 2022 in response to the cut in gas supplies from Russia. Due to the significant deterioration in the supply situation, the German government has taken measures to save gas.

Energy Industry Act

The Energy Industry Act regulates a number of aspects that fundamentally contribute to security of supply. For example, the monitoring of security of supply (Section 51 EnWG) is regulated by the Federal Network Agency in coordination with the Federal Ministry for Economic Affairs and Energy. The regulations on the filling level requirements for gas storage facilities and other aspects (Section 35 a-h EnWG) are particularly important for ensuring security of supply. This so-called “Gas Storage Act”, which first came into force on May 1, 2022, fundamentally redefines the responsibilities, measures and instruments with regard to the security of natural gas supply. The market area manager THE, a subsidiary of all transmission system operators in Germany, will thereafter assume additional tasks related to security of supply and will be given new tools to ensure security of supply in the winter half-year. The law provides for minimum storage levels on certain cut-off dates. The responsibility to achieve the intended levels lies primarily with the market players and is to be monitored and reported by the storage operators. If the requirements are not met, THE may, in accordance with the provisions of the Energy Industry Act and with the approval of the BMWK, take additional measures to achieve the legally stipulated fill levels.

With the entry into force of the Regulation on the Adjustment of the Filling Level Specifications for Gas Storage Facilities (Gas Storage Filling Level Ordinance – GasSpFüllstV) on May 6, 2025, the legally defined filling levels from the “Gas Storage Act” were adjusted. According to the ordinance, the following regional and reporting date-related filling level specifications must be complied with as a percentage of the working gas volume of the respective gas storage facility with immediate effect and until March 31, 2027:

1. on November 1, a filling level of

a) 80 percent in each gas storage facility that is not covered by letter b,

b) 45 percent in each of the gas storage facilities Bad Lauchstädt, Frankenthal, Hähnlein, Rehden, Stockstadt and Uelsen due to their significantly reduced injection and withdrawal rates and their geographical location,

2. on February 1, a filling level of

a) 30 percent in each gas storage facility that is not covered by letter b,

b) 40 percent in each of the Bierwang, Breitbrunn, Inzenham-West and Wolfersberg gas storage facilities.

In detail, the procedure is structured in several stages:

Stage 1:The storage facilities are filled by the market participants. In addition, THE can invite tenders for SBI (strategic filling instruments; a market-based product). Only pre-qualified providers can participate in the SBI tenders.

Stage 2:THE may carry out additional SBI tenders if continuous storage monitoring reveals that injections are insufficient with regard to the minimum fill level requirements on the respective cut-off date.

Stage 3:If the gas storage facilities are still not sufficiently full, THE can purchase and store physical gas itself.

These stages do not represent a cascade of measures to be followed rigidly, but can also be combined with each other or skipped if necessary. In addition, a new instrument has been introduced: if storage users do not use booked storage capacities and it is foreseeable that the storage levels stipulated in the law cannot be achieved as a result, these capacities will fall to THE (so-called “use-it-or-lose-it” principle). THE can either put these storage capacities out to tender in stage 2 SBI or buy gas itself in stage 3. If storage capacities are not booked in the first place, THE can also book the unbooked storage capacities itself.

The costs (for tenders and purchase by THE) are passed on to the network users. The same applies – insofar as revenues are generated – to proceeds. THE determines the so-called gas storage levy, publishes it and invoices it to the balancing group managers in the market area.

Another component of the measures taken by the legislator in the context of the war in Ukraine is the Act amending the Energy Security Act (EnSiG). The aim of the Act is to strengthen crisis prevention and crisis management instruments. On the basis of the powers to issue ordinances in the EnSiG, the federal government is given far-reaching options for crisis management in the event of a threat to or disruption of the energy supply.

With this legal foundation and the clear definition of prerequisites, additional special crisis prevention measures can take effect even before an immediate threat to or disruption of the energy supply. For example, operators of critical infrastructure can be placed under trusteeship or, in extreme cases, expropriated in order to ensure security of supply. European solidarity mechanisms will also be further strengthened.

The EnSiG regulates, among other things, the mandatory involvement of the Bundestag in the determination of an immediate threat to or disruption of the energy supply by the federal government (Section 3 (3a) EnSiG). The Act also lays the foundations for the gas safety platform to improve the management of gas reduction at companies. The platform is a central and exclusive instrument of the Federal Network Agency (BNetzA) to manage the gas supply according to economic and political criteria in the event of a gas shortage.