Nord Stream 2 saves European industry several billion euros – German gas group

Germany’s gas industry has said additional natural gas import infrastructure such as the Nord Stream 2 pipeline is essential for keeping competition in Europe up and prices low. Europe currently has more natural gas import capacities than it actually needs, which is good news for supply security and competition in the world’s biggest natural gas import market, Timm Kehler, head of lobby group Zukunft Gas, told journalists at a press conference. “Of course, one can argue that this one pipeline or this one terminal is fully utilised or not,” he said. However, “this is about competition, that is our central argument. Nord Stream 2 ensures that gas prices in Europe remain low for the industry. If we didn't have it, we would be talking about several billion euros of additional burdens for industry in Europe,” he argued. Kehler also pointed to decreasing domestic natural gas production within the EU, claiming that this is another reason why the continent should strive for new import capacity. 

The need for additional natural gas infrastructure in Germany and Europe is a contentious issue as the continent phases out fossil fuels in order to become climate neutral by 2050. Many see natural gas as a transition fuel to secure supply for intermittent renewables feed-in. “Here we have a reliable energy source that is cost-effective and can serve the necessary climate action measures that are taking place throughout Europe in the next 10-15 years,” said Kehler. 

However, natural gas is still a fossil fuel, and its production, transport and consumption entails large amounts of greenhouse gas emissions. Furthermore, its role as bridging fuel for the energy transition does not automatically mean Europe needs more import infrastructure. Overall gas use is projected to stay level or decline by 2030 – largely due to energy efficiency especially in the heating sector – and then drop sharply in the following decade. In addition, the current infrastructure is far from being used to full capacity. The share of natural gas in Germany’s primary energy mix has risen in recent years, from about 23 percent in 2016 to almost 27 percent in 2020, while total gas consumption remained largely stable.