BAKU, Azerbaijan, September 8. The energy supply crisis in Europe has led to a dramatic decline in industrial gas demand, Trend reports.
According to the latest Global Gas Report, this downturn, driven by soaring prices and market volatility, has significantly impacted the use of gas for industrial processes, heating, and on-site power generation.
The report highlights that the European industrial sector, already struggling with lingering effects from the COVID-19 pandemic - such as supply chain disruptions, rising costs, and material shortages - has been further destabilized by the Russia-Ukraine conflict. This geopolitical turmoil has created a "perfect storm" for industries heavily dependent on natural gas.
From 2021 to 2023, industrial gas demand in Europe plummeted by 25 bcm, representing a 17.8-percent decrease. As companies faced skyrocketing gas prices, many were compelled to cut back operations, close facilities, or relocate production to more cost-effective regions.
Looking ahead, the report from Rystad Energy projects a modest rebound in demand, estimated at around 5 percent or 6 bcm, in 2024. This increase is anticipated to result from the temporary easing of curbs and fuel-switching measures. However, the report warns that up to two-thirds of the decline in European industrial gas demand could be structural. This permanent reduction is attributed to ongoing efficiency improvements, the relocation of production outside European borders, and significant shifts within the European gas market.