A spate of new gas projects will undermine the EU’s net-zero goals, according to a new survey by Global Energy Monitor (GEM). GEM’s survey also finds that the EU already has substantially more than enough gas import capacity to support the continent’s needs, even if pipeline import capacity from Russia were not available following the country’s invasion of Ukraine.
GEM’s Europe Gas Tracker shows that as of end-February 2022 the EU was planning a 24.9% capacity increase to 160.2 billion cubic meters per year (bcm/y). The estimated cost of this expansion is €26.4 billion (€14.1 billion for new gas import pipelines, and €12.3 billion for new LNG import terminals).
Since Russia's invasion of Ukraine, fifteen additional gas import and transmission projects adding at least a further 70 bcm/y have been proposed. GEM's survey finds that these projects would only add to the EU's long-term overcapacity problem.
Based on a conservative estimate of the maximum technical capacity for gas pipeline imports from Russia into the EU (~247 bcm/year), the report also illustrates how there is already sufficient import capacity without relying on piped Russian gas (see figure below).
Such an expansion is incompatible not only with EU requirements that gas usage be steeply reduced by 2030 and at odds with the International Energy Agency’s net-zero by 2050 scenario, but also new warnings from the Intergovernmental Panel on Climate Change about the catastrophic role that methane emissions are playing in the climate crisis.
The Europe Gas Tracker data show:
- 16 gas pipelines under construction amount to a total length of 3,200 kilometers (km) and costs of €6.5 billion. Of this, €2.1 billion is allocated to the 613-km Baltic Pipe Project, which is set to increase gas import capacity into the EU by 10 bcm/y.
- 62 proposed gas pipeline projects in the pre-construction phase would stretch 12,500 km and cost an additional €29.7 billion. Of this, €12.1 billion would go toward building 3,600 km of import pipelines and one capacity expansion (the Trans Adriatic Pipeline), increasing gas import capacity into the EU by at least 69.5 bcm/y.
- There are four LNG import terminals/terminal expansions under construction in the EU with known capacity of 4.3 bcm/y and costing €987 million.
- 26 proposed LNG import terminals/terminal expansions would add 102.7 bcm/y at a cost of €11.3 billion. This does not include recently announced plans in Estonia, France, Germany, Greece, Italy and the Netherlands to develop floating storage and regasification units (FSRUs), and in Italy to revive two previously shelved LNG terminals.
Greig Aitken, Research analyst at Global Energy Monitor, said: “Europe's problem is not a shortage of gas import capacity but the tightness of global markets. Reducing demand, increasing efficiency and deploying renewables is a sounder strategy than a long-term, multi-billion euro bet on new gas projects.”
