Publication details
Publication date: 14.05.2025, Melekh, Yaroslav; Salmon, Katrina; Dixon, James; Grubb, Michael; (2025) European Natural Gas through the 2020s: the decade of extremes, contradictions and continuing uncertainties. (UCL Institute for Sustainable Resources, Energy Market Series, Working paper 7). UCL Institute for Sustainable Resources: London, UK.
Summary
European Natural Gas through the 2020s: the decade of extremes, contradictions and continuing uncertainties
The European gas system has entered a structurally volatile phase defined by post energy crisis over build, dislocated demand trajectories, and a decoupling mandate under REPowerEU. This paper interrogates the contradictions between fossil lock-in through LNG import capacity and over contracting, and policy-driven demand reduction. The EU’s pivot to flexible LNG procurement exposes pricing to global volatility, while decarbonisation hinges on electrification, demand-side retrofits and hydrogen feasibility—each encumbered by cost, infrastructure lag, and political friction. We assess Europe's gas outlook through the decade’s residual volatility, policy ambivalence, and the emerging global LNG oversupply regime — a clash with geopolitical energy security imperatives, domestic backlashes against capital-intensive green technologies and market inertia. We argue that Europe’s energy system now operates in a zone of structural ambiguity—where security, sovereignty, economy and climate ambition remain deeply entangled, but as yet far from operationally aligned.
This publication is released as Working Paper #7 in the UCL Institute for Sustainable Resources - Energy Market series, and is co-published as Working Paper #233 by the Institute for New Economic Thinking.
Download on UCL Discovery
Read the corresponding blog from Yaroslav Melekh and Michael Grubb on the Institute for New Economic Thinking website: Europe’s Gas Roller Coaster
Authors
Yaroslav Melekh
Katrina Salmon
James Dixon
Michael Grubb
Photo by Karel Mistrík on Unsplash