The Gas Market Task Force (GMTF), established in February 2025 under the European Commission's (EC) clean industrial deal and action plan for affordable energy, said that the concentration levels in Dutch Title Transfer Facility (TTF) gas derivatives trading do not pose a threat to market stability.

The task force said that it carried out a structural mapping of the upstream and downstream EU wholesale gas supply markets, following concerns over market concentration raised in the Draghi report.

After analysing trading positions during both normal market conditions and periods of crisis, it found no evidence that market concentration undermined the orderly functioning of derivatives markets.

The GMTF is an advisory group established by the European Commission (EC) in early 2025 to scrutinise and monitor the functioning of EU gas and gas derivatives markets. It includes representatives from the EC, Agency for the Cooperation of Energy Regulators (ACER) and European Securities and Markets Authority (ESMA).

According to the report, the EU gas landscape has undergone a dramatic transformation since Russia's invasion of Ukraine. Russian pipeline imports fell from 42% of EU gas supply in 2021 to 12% by the third quarter of 2025 amid political tensions and contractual disruptions.

The European Union responded to market turbulence after the Russian invasion of Ukraine in 2022 by introducing price controls for power and a “market correction mechanism” for the European natural gas market.

While the overall market structure was judged to be sound, GMTF identified several areas where oversight could be strengthened.

The report noted that algorithmic trading strategies have become increasingly prevalent in commodity markets, including gas derivatives. While algorithmic trading can improve liquidity and price discovery, regulators warned that it may also create new risks, including reduced transparency, potential market manipulation and a possible disconnect between prices and underlying market fundamentals.

As a result, the GMTF stressed on continued monitoring of algorithmic and AI-driven trading systems. It also proposed closer cooperation among regulators to better understand their impact on trading activity and gas price formation.

Targeted consultation

The EC consulted market participants through a targeted consultation which was open for eight weeks from February to April 2025. The consultation covered spot and derivatives energy market aspects, including gas market-related aspects, as well as cross-cutting data-related matters.

Overall, respondents did not identify a need for major changes to the regulatory framework governing commodity derivatives trading. However, the consultation highlighted limitations in the current position management and position-reporting framework.

A key concern involved visibility over positions held in over-the-counter (OTC) derivatives markets, particularly where those positions may influence prices on regulated trading venues. Several stakeholders argued that trading venues should have access to a broader range of OTC derivatives data to improve position management controls, especially during periods of market stress.

Public authorities also advocated strongly for closing the reporting gap on positions held by third-country market participants. They argued that this would better enforce position limits and increase the visibility of third-country market participants’ positions.

In addition, some stakeholders said the process for granting exemptions from position limits for hedging and liquidity-provision activities could be made more efficient. One proposal would transfer responsibility for granting such exemptions from national competent authorities to trading venues.

Based on its findings, the GMTF recommended stronger cooperation between ACER and ESMA, improved data-sharing arrangements, enhanced surveillance tools and continued monitoring of emerging trading practices to ensure the resilience and integrity of Europe's gas derivatives markets.

Meanwhile, a group of 11 trade bodies in March published a letter saying that the introduction of a price cap on natural gas threatens the efficient functioning of crucial derivatives markets.

The European Central Bank (ECB) warned in May that Europe’s dependence on imported fossil fuels and fragmented energy infrastructure risk amplifying volatility across regional gas and power markets, increasing pressure on benchmark pricing and derivatives hedging activity.