A report published by the European Court of Auditors warns that the EU still has many tasks to address to adequately prepare for a future gas crisis. While the EU has taken a series of immediate measures to prevent Russia from using gas deliveries as leverage, the effectiveness of these measures is not always clear. The auditors also highlight various new challenges that the EU must overcome to secure its long-term gas supply. These include an increased dependence on imported liquefied natural gas (LNG) and the need to achieve CO2 neutrality for part of the EU's gas consumption.
The rapid cessation of gas imports from Russia, which accounted for 45% of the EU's gas imports in 2021, led to a supply crisis that, in turn, triggered an affordability crisis. In August 2022, wholesale gas prices reached a peak of €339 per MWh, compared to just €51 in August 2021. To mitigate the impact on households and businesses, EU countries began subsidizing gas and electricity prices, spending around €390 billion in 2022 alone. Through diversification measures, the EU was able to reduce its dependence on Russian gas by the end of 2023. Gas prices stabilized and returned to pre-crisis levels at the beginning of 2024.
"The crisis triggered by Russia's major assault on Ukraine in 2022 tested the EU's resilience to a sudden change in gas supply. Although prices rose sharply, causing significant costs for families and businesses, there was fortunately no severe gas shortage," said João Leão, the member of the Court of Auditors responsible for the audit.
More Technological Progress Needed
During the crisis, the EU successfully reduced its gas demand by 15%, but the auditors could not determine whether this was solely due to EU interventions or also influenced by external factors (e.g., high gas prices and a mild winter). Similarly, the EU-wide requirement to fill gas storage facilities was met, and the 90% target was even exceeded. However, this corresponded to the usual storage levels before the crisis. The effectiveness of the EU gas price cap could not be assessed either, as prices had remained well below the cap since its introduction.
Another measure was the establishment of the "AggregateEU" platform, which aimed to provide an alternative trading venue for gas, including joint procurement. Here too, the EU auditors could not determine whether the platform added value, as the crisis-induced price differences between EU countries had already significantly decreased by the time AggregateEU was operational.
Looking ahead, the auditors conclude that the EU must complete the framework for affordable gas. They also criticize that many EU countries are still reluctant to conclude bilateral solidarity agreements for gas supply. Some EU countries even plan to cut gas supplies to neighboring countries in emergencies. Additionally, the auditors point out that insufficient progress has been made in carbon capture, use, and storage (CCUS) technology. This could also endanger supply security in the long term. Given the EU's climate goals, particularly net-zero emissions by 2050, reducing CO2 emissions from gas is becoming increasingly important.
