In a report published on Thursday, 22 May, the Agency for the Cooperation of Energy Regulators (ACER) warns that the EU is expected to become dependent on spot liquefied natural gas (LNG) in the absence of further decarbonisation.
As the EU moves away from Russian fossil fuels (see EUROPE 13634/1), LNG is becoming an increasingly important flexible supply source.
As a result, LNG’s share in the EU’s total gas supply has risen from 23% in 2020 to around 40% in 2024. The EU also remained the world’s largest importer of LNG in 2024.
For the most part, these imports came from the United States (50%), but Russian LNG imports also increased 22% despite the sanctions.
In addition, ACER indicates that the EU could face additional LNG demand of up to 30 bcm by 2030 compared to 2024 levels. The agency points out, “Meeting this [demand] via the spot LNG market might be costlier than medium- or long-term contracting and would heighten the EU’s exposure to spot price volatility.”
In its view, the EU needs to strike a balance between “securing additional contracted LNG volumes [to] reduce [...] price volatility” and “maintaining the flexibility necessary to avoid overcontracting in a changing market environment”.
To mitigate this uncertainty in demand and the risks associated with prices, the agency therefore recommends expediting decarbonisation efforts while securing additional volumes of LNG through flexible contractual arrangements.
The report: https://aeur.eu/f/h0k (Original version in French by Pauline Denys)