ON THIN ICE: A supply-demand analysis of three EU energy scenarios

The report concludes that the EU's demand for fossil gas and oil is in a long-term structural decline, making new production projects—especially in the Arctic—unnecessary and incompatible with 1.5°C warming limits. Analysis shows that existing production and current contracts will likely exceed EU demand by the 2030s in net-zero aligned scenarios, creating a risk of oversupply and stranded assets.

• EU fossil gas demand is in a long-term structural decline across all analyzed scenarios, driven by climate commitments, energy economics, and government policies.
• In scenarios aligned with the EU's climate pledges or a 1.5°C limit, existing gas projects in the EU, Norway, and Algeria, combined with current contracts, are projected to exceed demand by 2035.
• In a net-zero aligned scenario, EU domestic production and contracted gas could exceed demand by the 2030s, potentially reaching nearly double the demand by 2040, allowing the EU to end all Norwegian gas imports by 2035.
• New oil production projects are deemed unnecessary to meet future EU demand, as oil demand is expected to decline long-term and Norwegian oil production is projected to peak by 2025.
• Green hydrogen is expected to be more cost-competitive than gas-based blue hydrogen within the next five years, with BloombergNEF forecasting it to be 24% to 45% cheaper in Germany by 2030.
• The expansion of LNG import capacity in the EU, expected to increase by 78% by 2030 compared to 2021 levels, risks locking in higher fossil fuel use and undermining global climate goals.
• Exploration in the Barents Sea has produced disappointing, often uneconomical results, and production from new Arctic fields would likely not start until the late 2030s, coinciding with the EU's target to drastically reduce fossil fuel use.
• Current CCS capacity would need to increase nearly tenfold by 2030 to sustain Europe's gas demand while meeting the IEA's Announced Pledges Scenario, a target the industry is currently far from achieving.

APA

Worthy, M., Vettore, G., Bounfour, A., Suzan, S., Lystad, G., Bjørnevik, T. L., Lundberg, S. A., Sletsjøe, S., & Frisvold, P. (2024). ON THIN ICE: A supply-demand analysis of three EU energy scenarios. Zero Carbon Analytics. https://zerocarbon-analytics.org/wp-content/uploads/2024/02/On-Thin-Ice.pdf

Chicago

Worthy, Murray, Giulia Vettore, Agathe Bounfour, Simon Suzan, Guro Lystad, Tord Lauvland Bjørnevik, Silje Ask Lundberg, Simen Sletsjøe, and Paal Frisvold. ON THIN ICE: A supply-demand analysis of three EU energy scenarios. Zero Carbon Analytics, 2024. https://zerocarbon-analytics.org/wp-content/uploads/2024/02/On-Thin-Ice.pdf.

Wikipedia

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BibTeX

@techreport{worthy2024thin, author = {Worthy, Murray and Vettore, Giulia and Bounfour, Agathe and Suzan, Simon and Lystad, Guro and Bjørnevik, Tord Lauvland and Lundberg, Silje Ask and Sletsjøe, Simen and Frisvold, Paal}, title = {{ON THIN ICE: A supply-demand analysis of three EU energy scenarios}}, institution = {Zero Carbon Analytics}, year = {2024}, month = feb, url = {https://zerocarbon-analytics.org/wp-content/uploads/2024/02/On-Thin-Ice.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }