Published by Global Banking & Finance Review®
Posted on February 18, 2025
3 min readLast updated: January 26, 2026
Add as preferred source on Google
The EU plans to engage with LNG suppliers to lower energy prices while aiming for net zero emissions by 2050.
By Kate Abnett
BRUSSELS (Reuters) - The European Union will consider investing in liquefied natural gas (LNG) projects abroad as part of plans to "immediately engage" with reliable suppliers to try to lower energy prices, a draft Commission document showed on Tuesday.
The EU has a legally-binding climate target to cut its emissions to net zero by 2050, which means the bloc has to wean itself off CO2-emitting fossil fuels.
But it also has the challenge of dealing with high energy prices and threats from U.S. President Donald Trump, who even before taking office in January warned the EU it would face trade tariffs unless it imported more oil and gas from the United States.
In a draft document outlining measures to bring down European energy prices, the European Commission said it would "immediately engage with reliable LNG suppliers to identify additional cost competitive imports from existing and future LNG export projects".
It did not specify which countries it sought to engage with.
The U.S. is Europe's main supplier of LNG. Its purchases from the U.S. grew after Russia's war on Ukraine led the EU to drastically reduce its use of Russian pipeline gas.
Brussels wants to end the EU's reliance on Russia by 2027 but for now Moscow remains the EU's second-biggest LNG supplier.
Noting Tokyo's policy of funding LNG export infrastructure projects to position itself to secure long-term contracts, the draft said the EU would look into "the Japanese model".
Under EU law, European gas contracts must end by 2049 to align with the bloc's 2050 goal for net zero emissions.
The bloc has rapidly expanded its use of renewable energy, but its electricity market rules still rely on the price of gas, which hit two-year highs last week, to set the power price many European consumers pay.
As part of efforts to contain prices, the document said the Commission would propose a scheme to aggregate LNG demand from European companies to help them secure supply long-term deals as a shelter from short-term volatility.
This is a method also followed by Japanese companies that typically seek long-term contracts with large LNG producers.
"EU joint purchasing power should be harnessed by exploring the option of longer-term contractual engagements to make prices more stable," the draft said.
The draft document may change before it is expected to be made public on February 26, as part of a package of measures to support European industries.
(Reporting by Kate Abnett; additional reporting by Marwa Rashad, Nina Chestney; editing by Barbara Lewis)
The EU's plan to engage with LNG suppliers to reduce energy prices and achieve net zero emissions by 2050.
To reduce reliance on Russian gas and stabilize energy prices amid high costs.
The Japanese model involves funding LNG projects to secure long-term contracts.
Explore more articles in the Headlines category
