EU reliance on imported gas reaches record level in 2021

Natural gas statistics from the Joint Organisations' Data Initiative (JODI) have just been released. As Malta and Romania have not yet provided all data, we have excluded them from production. As for consumption, Bulgaria and Croatia only started providing in early 2021. We are therefore looking at r24 EU member states and 22 EU member states for production and consumption respectively. But this is giving a good proxy for the bloc as a whole.

EU-24 gas production was down by 8% last year, due to a drop of volumes in the Netherlands (-2.2bn m³), Italy (-0.6bn m³) and Ireland (-0.5bn m³). After the massive drop in EU production in 2020 vs 2019 (-22%), we are back to a yearly drop in line with the historical trend (-9%/year in 2010-2020) and we should expect this to continue in 2022.

Annual gas production at Groningen

Source: NAM, thierrybros.com

In the Netherlands, Groningen should only produce for a couple of more quarters before being shut down in 2023. Until now, the proxy for the EU production trend was the Netherlands, but with Groningen out, this should change from 2023.

Output in EU's top five gas producers

Source: JODI, BP statistical data for Romania pre-2020, thierrybros.com

Overall EU-22 demand was up by 4% in 2021, due to the post-coronavirus recovery, with the biggest contrasts being between Sweden, where consumption rose 15%, and Lithuania, where it fell 5%. The demand recovery has been negatively impacted by record high gas prices that forced certain industries to curtail their demand in Q4 2021.

Consumption in EU's six biggest gas markets

Source: JODI, thierrybros.com

Gas imports rose to account for a record high 88% of EU consumption last year. We should expect this percentage to continue growing in the coming years (at least due to the decline of domestic production). With record high prices, policymakers in Brussels and member states should start to worry about this and investigate how to boost domestic production (in particular in Romania and Poland) and diversify supply by incentivising the top three foreign suppliers outside Russia (Norway, US and Qatar) to invest massively to grow their exports. This could be envisaged as a strategic partnership, with the EU increasing its security of supply while fostering the energy transition.

EU dependency on imported gas

 Source: BP statistical historical data, JODI 2021, thierrybros.com

Dr. Thierry Bros

February 23, 2022

Professor at Sciences Po and energy expert