LNG: Key to security of supply and climate targets in Germany

• Rising gas prices are increasingly drawing attention to the issue of security of supply.
• Industry association presents position paper to highlight the importance of liquefied natural gas (LNG) for security of supply and as a transitional technology to a climate-neutral energy supply.
• Kehler: “LNG is the life insurance of our energy supply”

Zukunft Gas, the industry association for the gas and hydrogen industry, is calling for more transparent and faster approval processes to expand LNG import capacities. This is stated in a current position paper on the role of liquefied natural gas (LNG) in German energy policy. In it, the industry association highlights the central importance of LNG for security of supply and the transition to a climate-neutral energy supply. The association sees a particular need for action due to the price development in recent weeks.

Since the beginning of the year, the gas price has only known one direction and has doubled since the end of February; in the past four weeks alone, the price has risen by around 20 percent. The first cold winter days and the resulting decline in storage levels remind us: the gas crisis is not over yet. As a further factor of uncertainty, the impending end of gas transit through Ukraine at the end of the year is driving up prices. As a result, the German government is maintaining the alert level of the gas emergency plan, which has been in place since summer 2022. In a position paper published today, the industry association Zukunft Gas therefore highlights the importance of an efficient LNG infrastructure. “The crisis year of 2022 has vividly demonstrated the costs that our economy will face if there is insufficient import capacity,” explains Zukunft Gas board member Dr. Timm Kehler. “The damage of a lack of gas supply is significantly higher than the investments required for a resilient LNG infrastructure. LNG is the life insurance for our energy supply

A key demand of the position paper is the acceleration and harmonization of approval procedures. Existing regulatory hurdles often pose significant obstacles to the timely realization of LNG and gas projects. Zukunft Gas demands that the approval processes become more transparent, simpler and faster in order to facilitate the expansion of LNG import capacities. This acceleration is essential to be able to react to fluctuating energy demands in a timely manner. “The security of gas supply is still not at the good level we had before Russia attacked it,” explains Timm Kehler. “A consistent and rapid implementation of all planned LNG projects is therefore necessary. However, the paralyzing mildew of Germany's complexity has long since returned to many administrative processes at the speed of Germany.” The further development of the LNG infrastructure is also important with a view to the energy supply of our neighboring countries without access to the sea: here, the German import infrastructure can make an important contribution.

It is also important to create future prospects for the terminals: While natural gas will secure our energy supply in the short and medium term, it will become less important in the future in view of climate targets. New gases, such as hydrogen and its derivatives, will take its place. This means that the terminals will also be used to import new gases in the long term. This is because the demand for energy imports will remain high in the future, particularly due to the switch from coal to gaseous energy sources in power plants and blast furnaces. “The LNG infrastructure will continue to play a central role in the energy system in the future in the form of ‘green energy hubs’. However, this requires clear political signals and financial support to implement the necessary infrastructure transformation,” said Kehler.

In addition to these key measures for creating an efficient import infrastructure, the association is calling for greater integration of German companies into the global LNG supply chain and for the promotion of international energy partnerships. The aim, according to Kehler, is to establish long-term, diversified supply relationships. The LNG infrastructure is an integral part of a climate-neutral and secure energy supply, which must be strengthened by clear and long-term policy.

You can download the complete position paper here: The relevance of LNG with regard to security of supply and achieving climate targets in Germany