12. 06. 2025
AUTHOR: Julian Popov
Once a central pillar of European energy security, gas is steadily being relegated in the EU’s long-term energy planning—not by decree but by economic gravity. As Energy Ministers will discuss the EU’s new Energy Security Strategy at their upcoming Council on 16 June, they have the opportunity to design a new paradigm based on electrification, renewables, and structural demand reduction, not fossil fuels diversification.
This change is not ideological but grounded in a convergence of forces: geopolitical exposure, price volatility, declining demand, and global competition in clean technologies. According to the Commission, EU gas demand in 2024 was down to 340 bcm, over 20% below its 2019 level, also thanks to renewables, interconnectors, or distributed energy.
Shifting away from gas, a security matter
The roadmap toward ending Russian energy imports is not a rhetorical pivot. In 2024 alone, EU gas imports from Russia dropped to around 18%, while structural efficiency gains and electrification deepened. Yet, long-term LNG contracts of 80–99 bcm per year remain in place through 2027, despite a Commission scenario showing 42% gas oversupply by 2040. This raises obvious risks of stranded assets that need to be decommissioned in the coming years.
What was once described as a ‘bridge fuel’ now increasingly looks like a fiscal and policy liability. The Russian war in Ukraine showed us that the economic and geopolitical risk of gas dependency is enormous. In 2022, the EU’s fossil import bill peaked at €600 billion, a significant part of it for gas. As the Draghi report states, “the combination of a high share of imports and high prices results in a major drag on resources in the EU compared to its competitors”. And rightly concludes that “these funds could be better used by the EU to invest in infrastructure, innovation, education, and other areas, which are essential for developed economies to keep their competitive edge in global markets”.
Electrification at the centre of the new security paradigm
Europe’s internal market no longer supports the notion that gas should be the default flexible solution. Electricity system balancing is increasingly achieved by battery storage, demand-side response, and interconnection. A revised Energy Security Strategy could be the first step in acknowledging the potential of electrification in ensuring the EU’s energy security. More than half of final energy demand could be electrified by 2040, and, according to an analysis by Strategic Perspectives, the power sector could be on track for net-zero by 2037. The security premium that once favoured gas is now shifting toward resilient, diversified, and digital energy systems.
Investor sentiment is moving accordingly. While new gas-fired generation is slowing, the EU added 79 GW of wind and solar capacity in 2024, supported by a simplified regulatory environment and stronger market signals.
The Commission, backed by Member States, is also shifting focus toward “demand-side action”—efficiency, heat pumps, and industrial electrification. Biogas and green hydrogen can have an important role, but the volume displacement should not be overestimated in the short term. Despite strategic enthusiasm, green hydrogen use remains negligible, and biomethane reached only 3.5 bcm—a fraction of the gas system scale. So, for now, relying on green hydrogen does not seem a viable gas replacement option; direct electrification is.
However, those developments need to be consolidated. Russian LNG deliveries rose by 19% year-on-year, highlighting the difficulty of full decoupling and the need for strategic coherence. A new Energy Security Strategy can be a first step. The upcoming European Grids Package, planned for the end of 2025, and the Electrification Action plan will be the critical next steps in building the conditions for speeding up electrification and consolidating the market. From a geopolitical and security standpoint, the marginal utility of gas is diminishing. A resilient internal market is the cornerstone of EU sovereignty.
Crucially, gas’s climate credentials are eroding. Methane leakage and full lifecycle emissions are so far tightening under EU scrutiny. Even if the EU is considering weakening methane emission rules, the Commission is expected to update its Methane Strategy and policymakers are forced to reconsider assumptions that previously framed gas as a “cleaner” fossil fuel. New international frameworks could only add to this pressure. This will add pressure on investors, who should be concerned that in the future, carbon emissions prices could move close to that of coal generation.
Gas is no longer a strategic stepping stone. It is a stranded investment risk. For investors and policymakers alike, the signal is clear—diversify, electrify, and decarbonise, because the age of gas in Europe is fading.
