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Europe Can Accelerate Fossil Gas Phase-Out: With Less Hydrogen than Planned

TerraGreen

June 2023

Through structural fossil gas demand reductions in the buildings, industry and power sectors, the EU can strengthen its energy security and cut emissions by 60 per cent by 2030 and 89 per cent by 2040. Such an approach, supported by a strong policy mix, would reduce renewable hydrogen demand until 2030 by 80 per cent compared to the REPowerEU target.

Europe Can Accelerate Fossil Gas Phase-Out: With Less Hydrogen than Planned

Europe can halve its fossil gas use by 2030 and completely phase it out of the energy system by 2050 while ensuring security of supply, a new report by energy and climate think tank Agora Energiewende finds. Agora’s EU Gas Exit Pathway shows that the phaseout is possible based on structural fossil gas demand reductions without disruptive behavioural changes and while maintaining industrial production at today’s levels.

Key measures to reduce fossil gas demand include quickly ramping up renewable energy to reach 70 per cent of power generation by 2030 and 85 per cent by 2040, improving energy efficiency and electrifying process heat in the industry sector, insulating buildings as well as installing 40 million heat pumps by 2030 and 80 million by 2040.

Matthias Buck, Director Europe at Agora Energiewende said: “Europe’s legally binding climate neutrality target means no fossil fuels—including gas— in the energy system latest by midcentury. To get there, we need a smart mix of policy measures and financing instruments which will accelerate the needed home renovations, the efficiency improvements in industry and the deployment of solar and wind to power our societies.”

The Power Sector Reduces Fossil Gas Use the Fastest

In Agora’s EU Gas Exit Pathway, the energy sector, in particular the power sector reduces its fossil gas consumption the fastest, driven by the rapid scaling of solar and wind power. Deep geothermal and large-scale heat pumps also play a crucial role as an alternative to fossil gas in district heating networks, delivering roughly a quarter of district heat production by 2030 and half by 2040.