Outlook for EU Gas Demand and Import Needs to 2025

by Iulia Pisca

This paper is part of the series ‘CIEP Perspectives on EU Gas Market Fundamentals’. This series is the result of a comprehensive research project conducted in 2016 with a view to anticipate possible developments in gas supply and demand in the EU in the run-up to 2025 and discuss the sustainability of the EU’s diversification efforts.

The rapid decline in gas consumption in recent years has impacted the position of gas across sectors. The EU decarbonisation framework has been the main driver behind the changes and will continue to be so in future. At the core of the uncertainty driving the gas demand projections by analysts and stakeholders are: varying expectations and assumptions regarding the extent of the policy commitment to further pursue this agenda in changing market conditions, as well as the direction, timing, effectiveness and impact of these measures. As a result, these projections show a wide range of scenario expectations, extending from nose-diving to surging gas demand levels.

Based on these projections, future import levels, while affected by the same range of uncertainty, are expected to have less downswing and more upswing, as indigenous gas production prospects are declining. In 2015, EU net gas import needs were 194 Bcm. In the lowest of demand projections import needs could be slightly lower (by some 10 Bcm) in 2020, but would then be some 20 Bcm higher than 2015 levels by 2025. As such, EU gas imports will continue to play a significant role in the future EU gas market. However, the uncertainty surrounding the level of future demand for imports is likely to hamper any major investments in new external supplies to the EU.