Considering four years of quantitative data on the Russia‑Ukraine conflict, what structural shifts are observable in European energy dependency patterns, and how might these inform future geopolitical risk assessments for energy‑intensive industries?
Four years of data since Russia's invasion of Ukraine reveal a fundamental restructuring of European energy systems—one that has permanently altered industrial competitiveness landscapes and introduced new categories of geopolitical risk while mitigating others.
The reorientation of European gas imports represents the most dramatic peacetime energy supply shift in modern history. In 2021, Russian natural gas supplied approximately 45-47% of total EU gas imports, with 43% arriving via pipeline and 4% as LNGDecoupling from Russia Gas: A compilation of analysis on russian gas supply into Europe from 2022 to 2024, and plans for beyond 2025. The thread is wordy, it is put together as a reference point for knowledge - not as a click bait article. I recommend you use the audio narration to listen to the thread at your own leisure, while multi-tasking or commuting. Find the link to the narration in the first reply to the last thread. The source brief, sources and references are also provided in the thread. As set out by the Brookings Institute, “when the war began, Europe was importing a variety of energy products from Russia, including crude oil and oil products, uranium products, coal, and liquefied natural gas (LNG). But the Kremlin’s sharpest energy weapon was natural gas, delivered by the state-backed gas monopolist Gazprom via pipelines and based on long-term contracts. Europe needs gas for power generation, household heating, and industrial processes.” Before the invasion, more than 40% of Europe’s imported natural gas came from Russia, its single largest supplier, delivered via four main pipelines. Some European countries relied on Russia for more than 80% of their gas supply, including Austria and Latvia. But Germany was by far Russia’s largest gas customer by volume, importing nearly twice the volume of Italy, the next largest customer. “Oil and gas combined account for 60% of primary energy,” wrote the Economist in May 2022, “and Russia has long been the biggest supply of both. On the eve of the war in Ukraine, it provided a third of Germany’s oil, around half its coal imports, and more than half its gas.” Russia’s actions to cut off gas supply to Europe starting in May 2022 were particularly virulent because it was extremely difficult to cope with the loss of such a large volume of gas. Other regional sources of pipeline gas (e.g., from the North Sea) have been declining and key sectors of European industry (e.g., chemicals) depend on gas as their primary energy source. LNG is a potential substitute for pipeline gas, but it requires specialized infrastructure and global LNG markets were already tight, with much of the world’s supply going to Asia. The story of Europe’s adjustment to its main supplier of natural gas turning off the taps is generally told in heroic terms: with the continent securing new supply, conserving or substituting (often with generous government subsidies for industry and/or consumers) in order to weather the storm, and throwing Russia’s weaponization of gas back in its face through declining revenues. This narrative is not false, and the scale and speed of the response would certainly have been politically unimaginable before the invasion. But the self-congratulatory tale masks the fact that there were substantial regional differences in both energy supply and response to the crisis, which will make it difficult to generate a Europe-wide political response in the future. Even more importantly, the decoupling is by no means complete. Overall, in 2023, Europe still imported 14.8% of its total gas supply from Russia, with 8.7% arriving via pipelines (25.1 billion cubic meters or bcm) and 6.1% as LNG (17.8 bcm). (For comparison, during the first quarter of 2021, 47% of Europe’s total gas supply came from Russia, 43% via pipeline and 4% as LNG.)This means that the handful of member states that have not been able to or have not chosen to reduce their dependency remain highly vulnerable to Russia’s weaponization of energy imports. 1/16 Next 👉x +1. By the second quarter of 2025, Russia's share had collapsed to just 11% of EU natural gas importsAmerican Petroleum Institute | API | U.S. LNG accounted for 27% of the EU’s natural gas imports in 2Q25api . This represents a reduction of approximately 80% in relative dependency within four years.
The United States has emerged as the primary replacement supplier. US LNG accounted for 27% of the EU's total natural gas imports in Q2 2025, up from just 4% in 2019American Petroleum Institute | API | U.S. LNG accounted for 27% of the EU’s natural gas imports in 2Q25api . More strikingly, US LNG now represents 58% of all EU LNG importsQuarterly reports highlight progress on gas and electricity markets in Q2 2025 - Energyeuropa . EU imports from the US increased fourfold between 2021 and 2025—from 20 bcm to 80 bcmEurope is now hugely dependent on American natural gas. EU imports from the US jumped 4× between 2021–2025 — from 20 bcm to 80 bcm. Russian pipeline gas under long-term contracts was replaced by US LNG shipped by sea. — Karin Kneissl, former Austrian FM https://t.co/PozQ1AVMsex . Europe has become the largest destination for US LNG, receiving 67% of US exports between January and April 2025, compared to 37% in early 2019American Petroleum Institute | API | U.S. LNG accounted for 27% of the EU’s natural gas imports in 2Q25api .
Norway has consolidated its position as the dominant pipeline supplier, representing 55% of EU pipeline gas imports in H1 2025 and 30% of total gas imports (22 bcm)Quarterly reports highlight progress on gas and electricity markets in Q2 2025 - Energyeuropa +1. Since the beginning of 2022, EU countries have spent approximately €381 billion on pipeline gas imports, with €176 billion going to Norway versus €83 billion to RussiaEU Gas Flows Tracker - IEEFAieefa .
Europe has undertaken an unprecedented infrastructure buildout to accommodate this supply source transition. Since the beginning of 2022, Europe's LNG regasification capacity has increased by 32% to 338.9 bcmEuropean LNG Tracker | IEEFAieefa . Twelve new regasification terminals and six expansions between 2022 and 2024 added approximately 70 bcm per year, lifting total capacity to 250 bcm by that pointEurope’s LNG regasification capacity boom: strategic buffer or stranded-asset risk? | European Gas Hubeuropeangashub . The EU's LNG import capacity grew by 70 bcm in 2023-2024, with an additional 100 bcm expected to become operational between 2025 and 2030Liquefied natural gas - Energy - European Commissioneuropa .
However, this rapid buildout has created significant stranded-asset risk. EU LNG terminal utilisation averaged 58% in 2023 but declined to just 42% in 2024Energy Prices Portal | Energy Spot Prices | Energy Forward Pricesenergymarketprice . Half of EU LNG terminals now operate below 40% utilisation, including several new Floating Storage and Regasification Units (FSRUs): Germany's Mukran FSRU at 8%, Greece's Alexandroupolis FSRU at 9%, Italy's Toscana FSRU at 18%, and Finland's Exemplar FSRU at 38%Energy Prices Portal | Energy Spot Prices | Energy Forward Pricesenergymarketprice .
The most consequential finding for industrial risk assessment is that European gas consumption has undergone permanent demand destruction rather than temporary curtailment. European gas consumption is running approximately 20% below pre-Ukraine levels—a remarkable figure given that during COVID-19 in 2020, European gas consumption fell only 3%The Macro Brief – Europe’s gas turnaroundyoutube .
Compared to the 2019-2021 average, European countries (EU and UK) consumed 525 TWh less (11%) in 2022, 880 TWh less (18%) in 2023, and again 880 TWh less (18%) in 2024European natural gas demand tracker - Bruegelbruegel . The EU's total natural gas consumption is projected to reach 10.6 TJ in 2024, reflecting a 4% drop from 2023 and a 23% decline since 2021Geopolitical Shifts and Energy Policies: Europe's Path to Reduced Natural Gas Consumptionenerdata .
Critically, industrial gas demand has remained structurally depressed despite price normalisation. Industrial gas use was 24% lower in 2023 than in 2021 across nine major EU economies representing 75% of EU industrial gas demandAnatomy of the European Industrial Gas Demand Drop - Center on Global Energy Policy at Columbia University SIPA | CGEPcolumbia . Germany, the largest industrial gas user in the EU, experienced a 24% drop between 2021 and 2023Anatomy of the European Industrial Gas Demand Drop - Center on Global Energy Policy at Columbia University SIPA | CGEPcolumbia . Even with partial recovery, industrial gas use in January 2024 remained 17% lower than in January 2021Anatomy of the European Industrial Gas Demand Drop - Center on Global Energy Policy at Columbia University SIPA | CGEPcolumbia .
The majority of this 20% reduction is expected to be permanentThe Macro Brief – Europe’s gas turnaroundyoutube . Industrial demand has been consistently depressed throughout the period and has shown no signs of recovering despite falling wholesale gas pricesEuropean natural gas demand tracker - Bruegelbruegel .
The European chemicals industry has borne the most severe structural impact. BASF, the world's largest chemical producer, has undertaken systematic capacity reduction at its main Ludwigshafen site, closing one of two ammonia plants (380,000 metric tons/year capacity), a 165,000 metric tons/year methanol plant, and a 51,000 metric tons/year melamine plantChemical Week May 6/13: BASF eyes further plant closures at Ludwigshafenmydigitalpublication . In September 2025, BASF announced closure of its hydrosulfites production facility at LudwigshafenBASF to exit hydrosulfites business and close production facility in Ludwigshafen basf . BASF has also announced 600 job cuts in Antwerp while additional Belgian facilities operate in emergency mode or face closureEuropas Chemie zerbricht vor unseren Augen. Antwerpen ist der nächste Schritt eines industriellen Erdbebens. #Chemiekrise #BASF #Industriepolitik #Energiepreise Standort in Gefahr: BASF streicht in Antwerpen 600 Stellen und spart 150 Millionen Euro ein, während weitere Werke in Belgien schließen oder im Notbetrieb laufen. Hohe Energiepreise, CO2 Kosten und globale Konkurrenz setzen die Branche massiv unter Druck und gefährden ganze Wertschöpfungsketten in Europa. Politisches Versagen: Trotz Gipfeltreffen und großer Ankündigungen fließt das Geld aus dem Emissionshandel zu langsam zurück in die Industrie. Während Milliarden abgeschöpft werden, kämpfen Standorte wie Leuna ums Überleben und die Politik reagiert erst, wenn der Strukturbruch längst begonnen hat. Wer jetzt noch von Transformation träumt, riskiert die vollständige Deindustrialisierung Europas. @SilkeLutz vielen Dank für den wichtigen Hinweis! Quelle: Frankfurter Rundschau https://t.co/MEqqkjYcuqx . The company is relocating 2,800 Berlin jobs to India and Malaysia by 2028Merz' Indien-Deal: Sofortwirkung! 😂 BASF verlagert 2.800 Berlin-Jobs nach Indien – kostengünstig, bis 2028. https://t.co/aKDTmrSfgLx +1.
BASF has committed 23% of its investments for 2025-2028 in North America, citing favorable energy costs and more predictable regulatory environmentEnergy is the new site logic for CEM companiessimon-kucher . In 2025, BASF exited its 49% stake in the Nordlicht 1 and 2 offshore wind farms, selling back to Vattenfall at a €300 million lossEnergy is the new site logic for CEM companiessimon-kucher .
Germany's chemical plants operated at just 70% capacity in 2025—the weakest level in 20 yearsThe energy crisis never ended in Europe 🇪🇺 ⚠️ 🇩🇪 Germany’s chemical plants operated at just 70% capacity so far in 2025, the weakest level in 20 years 💰 Years of elevated costs have hollowed out parts of Europe’s industrial core. Reliance on pricier LNG isn’t helping https://t.co/At0EO5M0nvx . Approximately 9% of European chemical capacity has been announced for closure in 2025, with the majority in Germany and the Netherlands9% of the European chemical capacity has been announced to be closed in 2025…! Most capacities will be closed in Germany and the Netherlands. Why? Energy costs are too high. The wind & solar utopia starts to bite in Germany and the Netherlands. As does the carbon tax that basically makes China win market share with cheap exports into Europe, free of tariffs or Carbon Tax. Just ridiculousx .
Lanxess has closed its hexane oxidation facility at Krefeld-Uerdingen, will shut its Widnes site in the UK by 2026, and is streamlining bromine products manufacturing at El Dorado, Arkansas by end of 2026, resulting in 135 job lossesLanxess responds to weak demand with plant closures and reduced earnings guidance - European Coatingseuropean-coatings .
Yara International, responsible for approximately one-third of world fertiliser production, reduced European ammonia capacity utilisation to around 35%, curtailing annual capacity equivalent to 3.1 million tonnes of ammonia and 4.0 million tonnes of finished products (1.8 million tonnes urea, 1.9 million tonnes nitrates, 0.3 million tonnes NPK)Yara implements further production curtailments in Europeyara +1. Yara expects to permanently reduce European ammonia production by 1 million tonnes over coming years, relying more on imports: 300,000 tonnes from Hull plant curtailment, 400,000 tonnes from transitioning the Tertre plant in Belgium, and 300,000 tonnes from optimisation at industrial plantsBREAKING: Yara International has halted ammonia production at its Hull plant, a source with the company confirmed to S&P Global Commodity Insights. The shut down, which began in late January, is… | Matt Hoisch | 37 commentslinkedin .
CF Industries UK temporarily halted ammonia production at its Billingham Complex, noting marginal costs above £2,000/tonne while global ammonia prices stood at about half that level—with NBP gas prices more than double year-earlier levelsEuropean Ammonia Production Slashed by High Gas Pricesindustrialinfo .
ArcelorMittal, the world's second-largest steel producer with 65 million tonnes of crude steel production in 2024World Steel in Figures 2025 - worldsteel.orgworldsteel , reduced global steel production by 4% in 2025 compared to 2024, to 55.6 million tonnesArcelorMittal produced 55.6 million tons of steel in 2025 - GMK Centergmk . In Q4 2025, the company reduced steel production by 8.6% year-on-year to 12.8 million tonnesArcelorMittal produced 55.6 million tons of steel in 2025 - GMK Centergmk . ArcelorMittal has cancelled its planned multibillion-euro hydrogen steel project in Eisenhüttenstadt, GermanyEnergy is the new site logic for CEM companiessimon-kucher .
German steel production reached 37.2 million tonnes in 2024, up from 35.4 million tonnes in 2023World Steel in Figures 2025 - worldsteel.orgworldsteel . ThyssenKrupp produced 10.26 million tonnes of crude steel in 2024World Steel in Figures 2025 - worldsteel.orgworldsteel .
European aluminium production capacity was devastated during the crisis. In 2022, more than 40 CEOs of European metal groups warned of an "existential threat" to the industry, with 50% of the EU's aluminium and zinc capacity forced offline due to the power crisisIn a joint letter, more than 40 CEOs of European metal groups warn of an “existential threat” to the industry due to sky-high gas and electricity prices “50% of the EU’s aluminium and zinc capacity has already been forced offline due to the power crisis” https://t.co/tPmHvwwbkM https://t.co/5vujGA6uMvx . European industry saw aluminium production fall 12%, steel 10%, paper 6%, and chemicals 5% in 2022Bad energy policies have consequences. European industry is in a doom spiral. Many energy-intensive industries reduced or ceased production in 2022: Aluminum (-12%) Steel (-10%) Paper (-6%) Chemicals (-5%) https://t.co/tnY4wK1qeLx .
Trimet suspended 70% of capacity (276,000 tonnes) at its three German plants in 2022 due to soaring energy costsTrimet's German Aluminum Smelters Restart Progressing Smoothly ...metal . Before prices jumped, power accounted for about 40% of smelting costsEuropean Aluminum Smelters Face Closures - Light Metal Age Magazinelightmetalage . Recovery has been gradual: by mid-2025, the Essen plant (165,000 tonnes/year) and Hamburg plant (135,000 tonnes/year) were expected to resume full production, with Voerde (95,000 tonnes/year) planned for full capacity in Q4 2025Trimet's German Aluminum Smelters Restart Progressing Smoothly ...metal +1.
Norsk Hydro closed the majority-owned Slovalco smelter in Slovakia (175,000 tonnes capacity) in September 2022 due to electricity costs of €150/MWh—three times higher than the previous yearEuropean Aluminum Smelters Face Closures - Light Metal Age Magazinelightmetalage . Hydro also partially curtailed production at Karmøy and Husnes in Norway, corresponding to 110,000-130,000 tonnes annual reduction and 170-200 MW power consumption reductionHydro responds to reduced aluminium demand, partially curtails ...hydro . In 2025, Hydro announced plans to close five extrusion plants across Europe with NOK 1.9 billion (USD 190 million) restructuring charges, expected to deliver NOK 0.5 billion (USD 48.5 million) in annual savings from 2027Norsk Hydro stresses discipline at Investor Day amidst volatilityalcircle .
The persistence of industrial weakness despite price normalisation reflects fundamental structural competitiveness gaps. In 2024, average industrial electricity prices in Europe were around 19 ct/kWh, while in the US they remained below 7 ct/kWhEnergy is the new site logic for CEM companiessimon-kucher . In Germany, taxes, levies, and grid fees can account for more than 50% of the total energy priceEnergy is the new site logic for CEM companiessimon-kucher . US gas prices remain approximately 80% below European levelsThe Macro Brief – Europe’s gas turnaroundyoutube .
Even if European gas prices returned to historical levels, energy-intensive industries would still face immense pressures from North American competitors (where Henry Hub traded under €10/MWh equivalent in early 2024) and from producers with artificially low regulated gas prices in the Middle East and North AfricaAnatomy of the European Industrial Gas Demand Drop - Center on Global Energy Policy at Columbia University SIPA | CGEPcolumbia .
The decline of energy-intensive industries accounts for approximately 25% of the drop in industrial gas consumptionGeopolitical Shifts and Energy Policies: Europe's Path to Reduced Natural Gas Consumptionenerdata . Energy-intensive sectors have seen sharp declines: metallurgy (-11%), non-metallic minerals (-15%), and chemicals (-10%) since 2021Geopolitical Shifts and Energy Policies: Europe's Path to Reduced Natural Gas Consumptionenerdata .
Electricity generation from natural gas has fallen 26% since 2021, accounting for nearly 40% of the total decline in EU gas consumptionGeopolitical Shifts and Energy Policies: Europe's Path to Reduced Natural Gas Consumptionenerdata . Renewables have been the main replacement, with their share of total power generation increasing from 39% in 2021 to nearly 50% in 2024Geopolitical Shifts and Energy Policies: Europe's Path to Reduced Natural Gas Consumptionenerdata .
Prior to Russia's invasion of Ukraine, approximately 20 GW of new renewable capacity was deployed annually in the EU; since then, deployment has accelerated to approximately 60 GW annuallyWorld Energy Outlook 2025: Navigating Divergent Futures - Center on Global Energy Policy at Columbia University SIPA | CGEPcolumbia . Germany added approximately 17.5 GW of solar in 2025 to reach 118 GW total capacity, targeting 215 GW by 2030Good morning with good news: Germany added ~17.5 GW of solar in 2025 to reach ~118 GW. It had ~100 GW of solar in 2024, when solar generated 15% of its power. 215 GW is its 2030 goal, when solar will generate more than 25% of Germany's power! https://t.co/onDiJj8GgI https://t.co/4MSyMJrFWkx . Across Europe, 447 GW of new solar capacity was installed globally in 2023, representing 87% growth over 2022Boom! 447 GW of new solar capacity installed in 2023. That's 87% more than in 2022. Source is @SolarPowerEU https://t.co/DsPmqNIG6xx . In H1 2025, 6.8 GW of new wind power capacity was installed across Europe, with the EU-27 adding 5.3 GWTürkiye among top three in Europe for wind capacity additionshurriyetdailynews .
Cross-border transmission capacity must double by 2030, with 180 new transmission projects and 51 storage projects planned across the continent in 2026Five Trends Shaping Energy Infrastructure in 2026energy-infrastructure-partners . Europe's power grids are the oldest in the world, with over 40% of distribution infrastructure exceeding 40 years, requiring estimated investment of EUR 1.4 trillion in transmission and distribution grids by 2035Five Trends Shaping Energy Infrastructure in 2026energy-infrastructure-partners . By end of 2024, 14 EU Member States had already met or surpassed their 2030 interconnection target of 15%Money on the line: scaling electricity interconnection for Europe's energy future | Emberember-energy .
The European corporate PPA market has matured significantly as a risk mitigation tool. The market signed contracts for 16.2 GW of capacity in 2023, growing 37% from 2018The changing dynamics of European electricity markets and the supply-demand mismatch riskbruegel . However, volumes slightly decreased to 15 GW in 2024 across 308 dealsOverview of the diffusion of Power-purchase-agreements and ...europa . In 2025, 9 GW was signed—a slight slowdown from 2024's record but still the third-best year for corporate PPAsCorporate PPA Market Trends & Policy Frameworksyoutube .
The IT sector dominates, accounting for 30% of announced capacity (3.8 GW) in 2024A Reality Check of Corporate Procurement Trends in 2025 – Pexaparkpexapark . Heavy industry's participation has been volatile: while heavy industry and ICT combined for 7.1 GW in 2024Overview of the diffusion of Power-purchase-agreements and ...europa , heavy industry alone contracted only 500 MW in 2025 compared to 2.5 GW in 2024Corporate PPA Market Trends & Policy Frameworksyoutube .
Technology giants Meta, Amazon, Google, and Microsoft were responsible for 49% of all global clean energy buying activity in 2025, with Meta and Amazon contracting a combined 20.4 GW including 4.7 GW of nuclear powerCorporate Clean Energy Buying Fell in 2025 After Nearly a Decade of Growth | BloombergNEFbnef . In Europe, Middle East and Africa, corporate PPA volumes slid 13% year-on-year in 2025 to 17 GWCorporate Clean Energy Buying Fell in 2025 After Nearly a Decade of Growth | BloombergNEFbnef .
BASF announced early in the period that it was investing in a 2 GW German North Sea offshore wind project as a 50% ownerCORPORATE PPA: EU EXPERIENCE AND UKRAINE’S PERSPECTIVESyoutube . Covestro, a German chemical company, purchased 300 GWh of wind and solar power from CGN New Energy for Shanghai operations starting January 2023PPA Market Trends and Playersyoutube .
The European Energy Exchange (EEX) hosts one of the largest power derivative platforms globally, with turnover reaching over 15,000 TWh in 2023 amid the European power crisisA step towards a market-driven power sectorthehindubusinessline . OMV withdrew from its long-term Gazprom contract (signed until 2040) at the beginning of 2025, enabled by high gas reserve levelsEuropean countries have safely passed the second winter without Russian gas Experts point out that by the beginning of March, gas volumes in Europe's underground storage facilities remained at a high level, gas prices on exchanges fell significantly, and the network of liquefied natural gas (LNG) import terminals continued to expand. Moreover, leading gas exporters announced plans to increase supply volumes, resulting in gas savings of more than 100 billion cubic meters in Europe. According to the analytical portal Gas Infrastructure Europe (GIE), by the end of winter the average level of filling of underground gas storage facilities in the European Union reached 63%. Austria, Hungary, Slovakia and Czechia, which retain some business relations with Gazprom and receive gas mainly through transit through Ukrainian territory, ended the winter with reserves of over 70%. Spain and Portugal, which rely on pipeline supplies from Algeria and have extensive LNG infrastructure, have similar reserve levels. Based on these data, the Austrian oil and gas corporation OMV decided to withdraw from its long-term contract with Gazprom at the beginning of 2025, which became possible due to the high level of gas reserves in the country's underground storage facilities. This contract, signed until 2040 by the previous management of OMV, which had close ties with Moscow, was signed in 2018.x .
Hedging proved crucial during the 2022-23 crisis: in extreme cases, good hedging prevented insolvency and bankruptcy due to volatile energy pricesMandatory hedging can hamper competitiveness and liquidity - Eurelectric - Powering Peopleeurelectric . Price pass-through to retail prices varied significantly across EU countries, mainly due to differences in national crisis mitigation measures, contract-length structures, and retailers' different gas procurement strategiesEnergy prices and costs in Europe - European Commissioneuropa .
Green hydrogen represents a potential future pathway but remains far from commercial scale. Total European hydrogen production capacity reached 11.2 Mt in 2023, but conventional production methods comprised 95.5% of this capacityStimulating Clean Hydrogen Demand: The Current Landscape | The Belfer Center for Science and International Affairsbelfercenter . Total water electrolysis-produced hydrogen was only 31 ktStimulating Clean Hydrogen Demand: The Current Landscape | The Belfer Center for Science and International Affairsbelfercenter .
The EU's 2020 goal of 6 GW electrolysis capacity by 2024 was missed massively—only 600 MW was operational with 2.8 GW under construction as of July 2025Europe's Hydrogen Industry Bands Togetherindustrialinfo . Installed water electrolysis capacity in Europe more than doubled in the past two years to 385 MW by September 2024, or around 64,000 tonnes H₂ per year[PDF] CLEAN HYDROGEN MONITORhydrogeneurope . The REPowerEU target calls for 40 GW of renewable hydrogen electrolysers by 2030, producing 10 million tonnes domestically while importing another 10 million tonnesEurope's Hydrogen Industry Bands Togetherindustrialinfo .
Only 3.6% of European supply-side projects planned for 2030 have reached final investment decisions or are operational as of 2024Stimulating Clean Hydrogen Demand: The Current Landscape | The Belfer Center for Science and International Affairsbelfercenter . The total pipeline of projects in Europe announcing to come online by 2030 is 14.4 Mt, down 8% compared to 2023[PDF] CLEAN HYDROGEN MONITORhydrogeneurope .
Notable projects under development include:
The 9,040 km European Hydrogen Backbone pipeline network, approved in October 2024, will provide 87 GW of output capacity by 2032, with first lines coming online as early as 2025Stimulating Clean Hydrogen Demand: The Current Landscape | The Belfer Center for Science and International Affairsbelfercenter .
European companies are increasingly shifting industrial investment to the United States, driven by the Inflation Reduction Act's incentives. The IRA provides up to $10 billion over ten years through section 48C tax credits covering up to 30% of clean energy manufacturing facility investment costs, plus an estimated $30.6 billion through section 45X production tax credits for clean energy equipment manufacturingRelay Race, not Arms Race: Clean Energy Manufacturing Implications of the IRA for the US and EU – Rhodium Grouprhg . Total climate-related investment under the IRA is estimated between $355 and $552 billion between 2022 and 2031Relay Race, not Arms Race: Clean Energy Manufacturing Implications of the IRA for the US and EU – Rhodium Grouprhg .
The US offers $3/kg subsidies for clean hydrogen with no strings attached to production method or geographyEnergy is the new site logic for CEM companiessimon-kucher . The IRA's massive pull toward the US market could redirect billions away from clean manufacturing in Europe and emerging marketsGreen Trade Tensionsimf .
Companies like Tesla, Iberdrola, and Safran have moved some operations to the USHow Europe Can Regain Its Role As A Clean Energy Leaderoilprice . Volkswagen is eyeing investment opportunities in Canada to receive maximum tax creditsHow Europe Can Regain Its Role As A Clean Energy Leaderoilprice . Britain's largest chemicals manufacturer has announced it will stop investing in the UK and divert £3 billion to the US instead, citing energy prices, carbon taxes, and climate policies that make the UK uncompetitiveBritains largest chemicals manufacturer will stop investing in the UK and divert £3 BILLION to the US instead. Energy prices, carbon taxes and new Labour climate policies make the UK uncompetitive, unattractive and unworkable. Bloody brilliant 🤡 https://t.co/8v6z3kvWYFx .
The structural shifts observable in the data fundamentally alter the geopolitical risk framework for energy-intensive industries:
Reduced Russian Leverage Risk: The collapse in Russian gas dependency from ~45% to ~11% of EU imports represents a near-complete elimination of Moscow's energy coercion capability against Europe. This constitutes a permanent structural change—infrastructure has been built, supply chains reconfigured, and demand permanently destroyed. The reorientation came at immense cost but has been achieved.
New US Concentration Risk: US LNG now represents 58% of EU LNG imports and 27% of total gas importsAmerican Petroleum Institute | API | U.S. LNG accounted for 27% of the EU’s natural gas imports in 2Q25api . While the US is a democratic ally, this concentration introduces a new category of supply dependency that could become problematic under different political circumstances or during periods of US domestic market tightness.
Infrastructure Stranded Asset Risk: With LNG terminal utilisation averaging only 42% in 2024 and new terminals operating at 8-18% capacityEnergy Prices Portal | Energy Spot Prices | Energy Forward Pricesenergymarketprice , Europe faces significant potential for stranded infrastructure investment if demand continues declining or alternative supply sources develop.
Critical Minerals as the New Fault Line: The IEA World Energy Outlook 2025 highlights that energy security tensions now apply to fuels and technologies simultaneously[PDF] World Energy Outlook 2025windows . The average market share of top-three countries refining key energy minerals rose from 82% in 2020 to 86% in 2024[PDF] World Energy Outlook 2025windows . Since early 2025, China has introduced export controls on rare earth magnets essential for electric motors and generators[PDF] World Energy Outlook 2025windows . A single country dominates the refining of 19 out of 20 strategic energy-related minerals Synertics - IEA Outlook 2025: The World’s Energy Future synertics .
The evidence indicates that European energy-intensive industries face permanent structural disadvantage rather than cyclical challenges:
Industrial demand destruction is largely permanent: The 20% gas demand reduction is not recovering despite price normalisation, and "the majority of that 20% basically will not come back"The Macro Brief – Europe’s gas turnaroundyoutube .
The cost gap is structural: A 2-3x electricity price differential versus the US, combined with substantially higher gas costs, cannot be closed through efficiency gains aloneEnergy is the new site logic for CEM companiessimon-kucher .
Relocation is underway: Production capacity is migrating to China, India, the US, and other regions with structural energy cost advantages. This represents permanent productive capacity loss.
Hydrogen cannot bridge near-term gaps: With only 600 MW operational against a 40 GW 2030 target, hydrogen remains a decade away from material impactEurope's Hydrogen Industry Bands Togetherindustrialinfo .
Future geopolitical risk assessments for European energy-intensive industries should incorporate:
Supply Diversification Metrics: Monitor not just Russian dependency but concentration risk across any single supplier exceeding 25% of imports. Current US LNG concentration warrants attention.
Infrastructure Utilisation Efficiency: Track LNG terminal utilisation as a leading indicator of stranded asset risk and oversupply conditions. Below 50% utilisation suggests structural overcapacity.
Renewable Integration Pace: The acceleration from 20 GW to 60 GW annual renewable deployment demonstrates that energy security crises can accelerate transition timelinesWorld Energy Outlook 2025: Navigating Divergent Futures - Center on Global Energy Policy at Columbia University SIPA | CGEPcolumbia . Future risk models should incorporate non-linear deployment scenarios.
Corporate Hedging Coverage: Industries with robust PPA coverage and long-term contracts show greater resilience. The divergence between tech sector (dominant PPA buyer) and heavy industry (declining participation) suggests differential risk exposure.
Critical Minerals Exposure: The emerging restriction regime on rare earth elements and battery materials represents the next frontier of energy-related geopolitical risk, potentially more severe than hydrocarbon dependency given greater geographic concentration.
The evidence from four years of data demonstrates that geopolitical shocks can trigger permanent industrial restructuring within a single business cycle. European energy-intensive industries that survived the 2022-2025 period face a structurally different competitive landscape—one where energy costs remain a persistent disadvantage and where the policy response to geopolitical risk may itself accelerate deindustrialisation through carbon taxation, renewable mandates, and infrastructure investment requirements. Future risk frameworks must account for both the traditional supply disruption scenarios and the second-order effects of policy responses to those disruptions.