Security for the EU’s natural gas supply is not guaranteed, it points out European Court of Auditors (ECA)in a report published today.

For the EU to be ready to deal with the next gas crisis, significant hurdles must be overcome, the ECA warns. While the EU has taken some emergency measures to deal with Russia’s weaponization of natural gas, the benefits of EU action have not they are always clear. The ECA also points to several new challenges that the Union will have to face in order to secure its gas supply in the long term. Such are the greater dependence on imported liquefied natural gas (LNG) and the need to decarbonize part of natural gas consumption.

The rapid phase-out of natural gas imports from Russia, which in 2021 accounted for 45% of EU gas imports, caused a supply crisis, which in turn led to a price crisis. In August 2022, the wholesale price of natural gas peaked at 339 euros per megawatt hour (compared to 51 euros in August 2021). Member states have started subsidizing gas and electricity prices (at a cost of around €390 billion in 2022 alone) in order to reduce the impact on households and businesses. By the end of 2023, the EU had successfully switched to sources other than Russia for its natural gas supply, and prices stabilized, reaching pre-crisis levels, in early 2024.

“Given its dependence on foreign natural gas, the EU should not be complacent when it comes to its security of supply. Furthermore, there are no guarantees of affordability for consumers in the event of a significant supply crisis in the future,” said Hoao Leao, EAC Member responsible for the audit.

During the crisis, EU achieved its target price of a 15% reduction in gas demand; however, the ECA was unable to ascertain whether this was due to the measures taken alone or to external factors (such as high gas prices and a warm winter). Likewise, the obligation to fill gas storage facilities at EU level was achieved and even exceeded the target price of 90%.

The ECA was also unable to assess whether the EU gas price cap has worked, as prices have remained much lower since it was introduced.

Among other measures taken is the launch of the AggregateEU ​​platform to provide an alternative natural gas trading channel, including joint purchases. In this case too, the ECA could not determine whether this particular platform offered added value compared to other pre-existing ones, because the crisis-induced differences in gas prices between EU Member States had already narrowed significantly when AggregateEU was put into operation.

Looking ahead, the ECA concludes that the EU needs to consolidate the affordable gas price framework. He also warns that many member states are still reluctant to sign bilateral solidarity agreements. Some would even consider cutting off gas supplies to neighboring countries in an emergency.

Finally, the ECA points to unsatisfactory progress in carbon capture, use and storage, which may also undermine security of supply in the long term. Given the EU’s climate objectives (in particular the goal of net zero emissions by 2050), the need to reduce carbon dioxide emissions caused by natural gas consumption will be an increasingly important aspect of the Union’s security of supply landscape. Today, the four commercial-scale carbon capture, use and storage projects operating in the EU can together capture up to 1.5 million tonnes of CO2 per year. This is a drop in the ocean compared to the 450 million tonnes of CO2 that will need to be sequestered with this technology every year by 2050 to meet the EU’s climate targets.