How is the decarbonisation of gas networks in Europe progressing?

At a time when Europe is striving to rapidly cut emissions while also facing the consequences of geopolitical shocks, Gas Infrastructure Europe (GIE) and Grant Thornton Advisory have published the fourth edition of a report mapping the readiness of gas systems for decarbonisation in 14 countries across Central and Southeastern Europe (CEE and SEE). The study analyses the impact of the energy crisis following Russia’s invasion of Ukraine, tracks changes in gas flows and the move away from Russian supplies, and connects technical facts with questions about competitiveness and the future of industry in the EU.

The report takes a comparative approach, making it possible to assess the progress of individual countries using a range of technical and regulatory indicators. It evaluates both the state and development of infrastructure and access to financing, regulatory stability and specific decarbonisation projects. It also compiles consolidated Eurostat data for 2023, including figures on greenhouse gas emissions, energy consumption and the fuel mix.

The report confirms that natural gas remains a key fuel for stabilising the energy system: it provides flexibility when renewable generation is low, helps bring down prices and enables a gradual move away from coal. Nevertheless, the entire sector is undergoing fundamental change. Gas flows in the region are now more diversified, dependence on Russian gas is declining, and LNG terminals and new pipelines are becoming more prominent. Gas storage facilities continue to play an important role, providing seasonal balancing and security of supply. The report warns, however, that ahead of the 2025/26 winter season, stocks are considerably lower than in previous years, making timely refilling and better coordination at both national and European level necessary.

Investment in hydrogen, biomethane and infrastructure compatible with renewable gases is increasing as part of decarbonisation efforts. Converting existing gas pipelines to make them hydrogen-ready is an efficient way to use infrastructure already in place. New initiatives, such as the European Hydrogen Bank and hydrogen corridors, which are intended to connect industrial and consumption hubs across Europe, are also expected to play a key role. These initiatives are to be coordinated technically and operationally through the emerging European Network of Network Operators for Hydrogen (ENNOH).

Challenges for industry: the green transition, the move away from coal and energy prices

The current combination of high energy prices, pressure to decarbonise and demanding regulatory requirements is creating extremely difficult conditions for energy-intensive industry. The countries of the CEE and SEE region, where industry is often a major employer and source of GDP, are disproportionately affected by these challenges. The high energy intensity of these economies persists, although modernisation and the shift towards services are gradually reducing it.

The report raises doubts about the short-term effectiveness of the Clean Industrial Deal, which the Commission hopes will strengthen European manufacturing, protect jobs and support green innovation. Critics point to excessive bureaucracy and a lack of rapid financial assistance, putting the chemicals, construction materials and steelmaking sectors at particular risk. This could lead to falling production, companies relocating outside the EU and slower economic growth.

One positive sign is that most countries in the region have the political and legislative framework in place to develop the biomethane market. Nevertheless, its growth remains below its potential. CEE and SEE countries have enormous untapped biomethane potential thanks to the availability of agricultural and industrial residues, and it could play a key role in achieving the EU target of 35 billion m³ per year by 2030. The report calls for greater investment support and the removal of administrative barriers so that biomethane can become a fully integrated part of national energy strategies.

The report also maps specific decarbonisation projects, from the construction of electrolysers to demonstrations of carbon capture, utilisation and storage (CCUS) technologies, which are particularly important for sectors such as cement and steelmaking.

The report shows that decarbonisation in the region is technically feasible, but politically and economically challenging. Gas infrastructure remains important, not only as a backup but also as a future platform for hydrogen and biomethane. The greatest risk is that the EU will try to carry out the transition quickly without financial and legislative support for regions with less robust economies. If a balance is not struck between climate ambitions and industrial realities, Europe could lose not only companies but also technological know-how in the global competition.