European LNG Imports Decline: A Shift Towards Renewable Energy

On 18 February 2025, a significant revelation from the Institute for Energy Economics and Financial Analysis (IEEFA) highlighted a remarkable trend in Europe’s energy consumption. European LNG (liquefied natural gas) imports experienced a 19% decrease in 2024, marking the lowest demand level in over a decade. This decline is emblematic of broader shifts in energy dynamics, driven largely by advancements in renewable energy.

The Landscape of LNG Demand

The IEEFA’s updated European LNG Tracker revealed that the continent’s LNG demands have dwindled to levels not observed since 2021. Notably, the countries that felt this reduction the most included:

• United Kingdom: A staggering 47% drop in imports.
• Belgium: A decline of 29%.
• Spain: Decreased imports by 28%.

This downward trend reflects substantial efforts across the EU to diminish gas consumption, a critical move to bolster energy security in the region. Ana Maria Jaller-Makarewicz, the lead energy analyst for IEEFA Europe, noted, “EU efforts to curb gas demand have been crucial for maintaining the continent’s security of energy supply.” However, she emphasized that stagnation in gas demand indicates the necessity for ongoing work to diversify energy sources and mitigate Europe’s dependence on the fluctuating LNG market.

Contrast with Infrastructure Growth

Intriguingly, while LNG demand has declined, plans for new import infrastructure have continued to advance. Although infrastructure expansion slowed in 2024, projections indicate that Europe’s LNG import capacity could grow by a remarkable 60% between 2021 and 2030. This growth trajectory persists despite anticipated further reductions in LNG demand as the continent transitions towards more sustainable energy sources.

IEEFA forecasts suggest that by 2030, Europe’s regasification capacity may suffer from underutilization, with an expected 30% average utilization rate. The expansion of LNG terminals has been noted in various nations, including Germany, the Netherlands, Türkiye, Italy, France, Belgium, Greece, Finland, Poland, and Croatia. However, this rapid expansion in the face of declining demand raises concerns.

The Risk of Overinvestment

Jaller-Makarewicz pointed out the challenges posed by investing in new LNG terminals without sufficiently considering demand trends. “Doubling down on new LNG terminals without taking into account demand trends raises the risk of overinvestment and infrastructure being underutilized,” she remarked, highlighting the urgency for careful planning amidst an accelerating energy transition.

The Russian LNG Dynamic

On an unexpected note, while European nations reduced their overall LNG imports, imports from Russia witnessed a rise. The U.S. contributed nearly 46% of Europe’s LNG imports in 2024, although imports from the U.S. experienced an 18% decline. In stark contrast, European and EU imports of Russian LNG soared by 12% and 18%, respectively, despite the EU’s objective to eliminate reliance on Russian fossil fuels by 2027.

A troubling aspect of this trend is that about a third of the EU’s Russian LNG imports were conducted through spot trades in 2024, rather than through long-term contracts. Jaller-Makarewicz urged member states to prioritize reducing these spot trades, underscoring that they contribute to a precarious reliance on destabilizing supply routes.

Countries like France, Spain, and Belgium accounted for an impressive 85% of Europe’s Russian LNG imports. According to IEEFA estimates, EU nations collectively spent approximately €6.3 billion on Russian LNG from January through November 2024.

Impact of Supply Chain Interruptions

The geopolitical climate has also shaped LNG imports, particularly the absence of Russian gas transit via Ukraine, which resulted in a significant reduction in imports—around 32 billion cubic metres—for 2024. This loss is more than double the volume of Russian gas that transited through Ukraine, which registered at about 15 billion cubic metres.

As Europe seeks to fill gas storage levels ahead of the next winter and address supply gaps, LNG demand is projected to increase in 2025. However, experts forecast that this demand will remain below the historical peaks witnessed in 2022 and 2023.

The evolving landscape of LNG imports in Europe is a reflection of broader, transformative shifts within the energy sector, as the continent strives to balance immediate energy needs with a longer-term commitment to sustainability. The interactions between LNG imports, infrastructure investment, and geopolitical complexities will shape Europe’s energy future in the years to come.