BAKU, Azerbaijan, February 24. European gas markets remain volatile as the continent faces its fourth year of high gas prices, with significant knock-on effects for electricity and food prices, according to the International Energy Agency (IEA), Trend reports.
High gas prices have contributed to inflation, rising energy costs, and increased energy poverty, particularly affecting households and businesses across Europe. Industrial gas prices in Europe have been, on average, 30% higher than in China and five times the level in the U.S., forcing some energy-intensive industries to scale back production or shut down entirely.
The European Commission and member governments have implemented measures to address these challenges, including affordability support for consumers, gas storage obligations, and a joint gas purchasing mechanism. Europe has also leveraged its LNG import infrastructure and expanded its gas grids to diversify supplies, helping avoid supply shortages despite a drastic reduction in Russian gas flows.
In response to the energy crisis, Europe has made significant progress in renewable energy, adding 250 gigawatts of new capacity since 2022, which has helped curb gas demand in the electricity sector. Energy efficiency improvements have also played a role, although progress slowed in 2024. Despite these advances, gas remains essential for energy security, particularly in providing flexibility for power generation.
Looking ahead, Europe's energy systems face continued challenges. Gas storage levels are lower than usual, and global gas markets may not ease significantly until 2026 when a wave of new LNG supply from the US and Qatar begins to come online. In the meantime, European governments must focus on accelerating energy efficiency, diversifying energy sources, and securing long-term gas contracts to ensure a stable supply and strengthen energy security. As geopolitical uncertainties persist, prioritizing energy efficiency and gas-saving measures will be crucial for Europe's resilience and continued progress toward cleaner, more secure, and competitive energy systems.