Equinor challenges €4m fine over alleged gas market manipulation in France

Equinor, the Norwegian energy multinational, has been fined €4 million by the French Energy Regulatory Commission (CRE) over alleged breaches of gas market regulation. The fine relates to two separate instances in 2019 and 2020, in which the regulator claims the company violated the Regulation on Wholesale Energy Market Integrity and Transparency (REMIT) while booking annual gas transmission capacities at the French-Spanish interconnection point Pirineos (PIR).

The case also involves Equinor’s subsidiary, Danske Commodities, which has been fined €8 million for similar alleged infractions. Both companies have denied any wrongdoing and announced their intent to appeal the penalties, escalating the case to Conseil d’État, France’s highest administrative court.

What Are the Allegations Against Equinor?

CRE has accused Equinor of colluding with Danske Commodities during the first round of annual gas capacity auctions by reserving more than the maximum volume of capacity permitted. The regulator claims this action disrupted gas market regulation, potentially distorting competition in the European energy market.

Danske Commodities, which was acquired by Equinor in 2018, allegedly participated in the energy trading violation by engaging in practices that exceeded legally permissible booking limits. The French authorities argue that such behavior could have led to market imbalances, affecting the availability and pricing of gas transmission capacity.

Despite the serious nature of the accusations, Equinor maintains that its actions were fully compliant with market rules and that no collusion took place.

How Is Equinor Defending Itself?

Equinor has strongly refuted the allegations, stating that it has rigorous market compliance measures in place to prevent any violations. The company insists that its bookings were made independently and solely to retain access to the Spanish capacity booking platform, ensuring continuous operations in the Spanish gas market.

According to Irene Rummelhoff, executive vice president for Marketing, Midstream and Processing at Equinor, the company adheres to strict internal regulations designed to align with international market compliance standards.

She explained that Equinor has not identified any evidence of collusion and fundamentally disagrees with CRE’s conclusions. As a result, the company believes the fine is unwarranted and will take its case to Conseil d’État in an effort to overturn the ruling.

What Compliance Measures Does Equinor Follow?

Since acquiring Danske Commodities, Equinor has implemented extensive market compliance measures to prevent conflicts of interest and ensure transparency in energy trading. These include strict information barriers between the two entities to maintain independent decision-making, organizational safeguards to prevent coordination that could be interpreted as collusion, and regular training and monitoring to reinforce compliance with gas market regulation and REMIT requirements.

Equinor argues that these measures demonstrate its commitment to maintaining market integrity and ensuring fair competition within the European gas market. The company has also highlighted its long-standing adherence to international regulatory standards, reinforcing that it has no incentive to engage in market manipulation.

What Happens Next in Equinor’s Legal Battle?

By taking its case to Conseil d’État, Equinor is seeking to overturn the fine and clear its name regarding the energy trading violation claims. The court’s ruling could set a significant precedent for future cases involving gas market regulation in France and beyond.

The case also raises broader questions about how European energy markets are regulated and whether stricter oversight is needed to prevent potential market manipulation. As energy prices remain a contentious issue across Europe, regulators are under increasing pressure to enforce market rules while ensuring that companies are not unfairly penalized for legitimate trading practices.

For Equinor, the stakes are high. A successful appeal could reinforce its reputation as a leader in market compliance, while an unsuccessful outcome may result in long-term regulatory scrutiny and potential operational constraints in key European energy markets.

What Are the Implications for the Energy Sector?

The fines imposed on Equinor and Danske Commodities highlight the growing regulatory focus on gas market regulation and the need for strict compliance with energy trading rules. European regulators are increasingly targeting potential market manipulation, particularly in cross-border gas and electricity trading.

Industry experts suggest that companies operating in the European energy sector must adopt even stricter compliance frameworks to avoid similar regulatory actions. This case serves as a warning to other market participants about the risks of non-compliance, even when companies believe they are operating within legal limits.

Equinor’s appeal could ultimately influence how gas market regulation is enforced in the future, shaping the balance between regulatory oversight and market freedom in energy trading. The outcome will likely be closely monitored by energy firms, investors, and regulators across Europe, as it may determine the extent to which companies can challenge regulatory decisions in cases of disputed compliance.