European Natural Gas through the 2020s: the Decade of Extremes, Contradictions and Continuing Uncertainties

Abstract

The European gas system has entered a structurally volatile phase defined by post energy crisis overbuild, dislocated demand trajectories, and a decoupling mandate under REPowerEU. This paper interrogates the contradictions between fossil lock-in through LNG import capacity and overcontracting, 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.

Keywords: LNG, European energy scenarios, European energy security, RePowerEU, Natural Gas Trade

JEL Classification: D40, D47, F15, F21, F50, F51, G13, H12, L60, L95, O25, O38, O52, Q34, Q35, Q41, Q47, Q48, Q54