The economic and geostrategic role of LNG in EU energy transition

Sara Casagrande and Bruno Dallago

Structural Change and Economic Dynamics, 2025, vol. 74, issue C, 387-404

Abstract: Since 2010s, the EU promotes decarbonization and energy security as strategic goals. However, a fundamental impetus came with Russia's invasion of Ukraine in 2022. The EU promoted a drastic reduction of Russian gas import, massive import of liquefied natural gas (LNG), investments in the LNG value chain, reduction of energy demand, and green transition. This article analyses the rise of the LNG market, its contradictions and challenges. According to results, LNG rise has been determined more by geopolitical factors than economic ones, that can be traced back to the impact of the shale gas revolution on the EU-Russia relations. Indeed, LNG convenience compared to pipeline gas is threatened by market volatility and various costs peculiar to LNG. Currently, the massive import of LNG has not solved the problem of energy dependence and cost, does not fully compensate for the gas supply gap and threatens the credibility of the climate agenda.

Keywords: Ecological transition; Energy prices; Energy security; EU; LNG (search for similar items in EconPapers)
JEL-codes: E31 O52 Q32 Q41 Q42 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:streco:v:74:y:2025:i:c:p:387-404

DOI: 10.1016/j.strueco.2025.04.002

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