In search of an optimal design for European gas markets

The liberalisation of the European gas market is becalmed. Meanwhile regulatory uncertainty looms on the investment horizon. During the last ten years, European gas markets have gone through profound restructuring processes. Initially ambitious, regulatory targets from the European Commission (EC) boiled down to a very basic introduction of competition and liberalisation in the form of the first Gas Directive. Since then, the EC has accelerated the reforms and deepened competition by progressively releasing new directives, regulations and guidelines, while at the same time remaining resolute during the energy sector inquiry. Since the beginning, attempts to liberalise European gas markets have faced strong opposition and resistance from the gas industry and industry-oriented governments, aiming to maintain the status quo of the market organisation, while leaving energy policy as a national issue.