Has EU LNG demand peaked?
Either way, demand will plateau just as global supply surges | EU LNG Chart Deck: 28 Mar-26 Apr 2024
European Union gas demand is falling so fast that the bloc could be over-contracted with liquefied natural gas (LNG) by 2027. That was the main conclusion of a notable report from ACER, the EU’s energy regulatory agency. Cue celebratory remarks from several NGOs and other proponents of rapid decarbonisation.
ACER’s assertion came with a big caveat: EU gas demand would need to fall by 25% in less than three years, in line with the REPowerEU plan. What certainty is there that this milestone will be achieved?
Very little, judging by progress against the plan’s various targets. Of the five pillars of REPowerEU, only two are on track — meaning gas will be needed to bridge the gap. As the marginal fuel source, LNG is highly likely to be the go-to source to meet any failure to deliver.
But that’s not to say the outlook is rosy for gas and LNG demand in Europe. Quite the opposite: wind and solar installations are still breaking records, even if deployment rates fall short of ambition. The upshot is that EU LNG demand will probably be lower in 2027 than today — raising tricky questions both for suppliers at the higher end of the cost curve and for investors in new regasification capacity.
This week’s EU LNG Chart Deck takes stock of the EU’s highly ambitious renewables and energy efficiency drive, in the context of recent gas and LNG price movements in April, an eventful month in the markets.