Europe’s gas consumption has declined by 10% to 15% since Russia’s invasion of Ukraine due to high prices, leading to significant cuts in energy-intensive industries.
According to Eurostat data, the total gas consumption in the European Union’s seven largest gas-consuming countries was 5.0 million terajoules in the first five months of 2023.
This is a decrease from 5.6 million terajoules during the same period in 2022 and an average of 5.7 million over the previous ten years (“Supply, consumption and transformation of gas,” Eurostat, July 6, 2023).
Monthly total gas use has decreased by 12% to 15%, except for April, which saw a 7% decrease due to unusually cold weather.
Chartbook: Europe gas consumption
As of May 2023, prompt gas prices have dropped by 85% from their peak in August 2022, as panic-buying for storage subsided and a mild winter resulted in record gas stocks.
However, prices remain 35% higher compared to the average between 2018 and 2021, putting pressure on industries such as steelmaking, smelting, cement, ceramics, glass-making, fertilizers, petrochemicals, and horticulture.
In response, many energy-intensive consumers have either closed plants or reduced operations during the winter of 2022/23 to minimize costs.
Due to high long-term gas prices, some capacity has not fully resumed operations, as it is not profitable.
Energy-intensive industries require uninterrupted gas supplies and often hedge their costs in advance to protect profit margins.
However, futures prices for gas deliveries in 2024 have averaged 52 euros per megawatt-hour in July 2023, more than three times the average between 2018 and 2021 (17 euros).
In Germany, France, Spain, and Italy, manufacturing output between March and May 2023 remained below the corresponding levels in 2019, prior to the pandemic and the gas crisis.
Europe managed to avoid gas shortages during the winter of 2022/23 but at the expense of significant de-industrialization, which may be challenging to reverse unless prices decrease substantially.