ENERGY SECUERITYTo Quit Russian Gas, EU Invests Billions in LNG

By Julia Merk and Michel Penke

Published 20 December 2022

The European Union is investing billions in infrastructure in its effort to replace Russian fuels with liquefied natural gas. This could prove to be a dead end — both for taxpayers and for the climate.

On March 5, just over a week after Russia invaded Ukraine, European Commission President Ursula von der Leyen expressed concern that the Kremlin might turn off the bloc’s gas tap. “The EU must get rid of its dependency on fossil fuels,” she wrote on Twitter. Von der Leyen then praised Spain, which she called “a frontrunner here, with its large renewables share and LNG capacities.”  

It would not be the last time that von der Leyen appears to have placed liquefied natural gas within the category of renewable energies. The problem is that LNG is also a fossil fuel: It is pumped out of the ground — in some cases fracked — and in the end burned in ways that are destructive for the climate. This conflation by von der Leyen, who spearheaded the European Green Deal, the EU’s road map to decarbonization, could cost the bloc ecologically and financially.

At the Economist’s Sustainability Summit in March, UN Secretary-General Antonio Guterres called fossil fuels “a stupid investment, leading to billions in stranded assets.” Countries must “accelerate the phaseout of coal and all fossil fuels,” Guterres said. “This is madness. Addiction to fossil fuels is mutually assured destruction.”  

And yet the EU is currently investing billions of euros into fossil fuel infrastructure that will either become obsolete or much more expensive to maintain if the bloc does not intend to further exacerbate the climate crisis.  

LNG Is Booming and Costs Are High 
The largest gas consumer in the EU is Germany, followed by Italy, the Netherlands, Slovakia and France, according to Eurostat. These countries are now trying to replace their gas imports from Russia with supplies from other sources.  

Since the beginning of the war, LNG imports to Europe have increased by 58%,” said Paula Di Mattia Peraire, a gas analyst with Independent Commodity Intelligence Services (ICIS). Because of this, Germany, Greece and Italy in particular — as well as Ireland, France, the Netherlands and Poland — are expanding their infrastructure to receive LNG.   

There is a lot of investments going on in Europe regarding LNG,” Peraire said. “If all these projects materialize — around 15 new projects till the end of 2024 — that will bring the regasification capacity up by 70 billion cubic meters per year.”