REPORT FROM THE COMMISSION TO THE COUNCIL review on the functioning of Regulation (EU) 2022/1369 on coordinated gas demand reduction, amended by Regulation (EU) 2023/706
Date: 2024-02-27
Institutions: Directorate-General for Energy, European Commission
Subjects: EU Member State, EU energy policy, energy consumption, energy crisis, energy demand, energy saving, gas supply, natural gas, security of supply, self-sufficiency in energy

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 27.2.2024  COM(2024) 88 final  REPORT FROM THE COMMISSION TO THE COUNCIL review on the functioning of Regulation (EU) 2022/1369 on coordinated gas demand reduction, amended by Regulation (EU) 2023/706  
 
 
I. 

Introduction 

Since  Russia’s  unprovoked  and  unjustified  military  aggression  against  Ukraine,  Russian  gas 
supplies to the EU have been continuously disrupted. In response to the attempt by Russia to use 
energy  as  a  political  weapon,  the  Commission  adopted  the  REPowerEU  Plan,  aiming  to  save 
energy,  accelerate  the  clean  energy  transition  and  diversify  energy  supply  to  phase  out  its 
dependence on Russian fossil fuels as soon as possible. While the EU relied on Russia for 45% of 
its gas supplies in 2021, the supply of Russian gas has continuously decreased since February 2022 
and accounted for 15% of the EU’s total gas imports in 2023. 

To  mitigate  the  serious  security  of  supply  risks  that  materialised  in  2022  as  a  result  of  further 
supply cuts from Russia, the EU adopted Regulation (EU) 2022/1369 in August 2022 (hereafter: 
“Demand Reduction Regulation”), to voluntarily reduce gas demand in a coordinated manner by 
15%.  This  target  becomes  a  mandatory  reduction  in  case  a  Union  alert  is  declared.  Given  the 
lingering risks and need for a continued coordinated reduction of gas demand, in March 2023 the 
EU prolonged the Demand Reduction Regulation by 1 year via Regulation (EU) 2023/706.  

Article 9 of the prolonged Demand Reduction  Regulation  stipulates that by 1 March 2024, the 
Commission  must  carry  out  a  review  of  the  Regulation  in  view  of  the  general  situation  of  gas 
supply to the Union and present a report on the main findings of that review to the Council. Based 
on  that  report,  the  Commission  may  propose  prolonging  the  period  of  application  of  this 
Regulation. 

II.  Current security of supply situation 

Russian pipeline imports significantly decreased since the Russian invasion of Ukraine, from 150 
bcm before the crisis to 25 bcm in 2023. This decrease has mainly been compensated by demand 
reduction  of  approximately  65  bcm.  Increased  imports  via  LNG  (ca.  50  bcm)  and  alternative 
pipeline imports (ca. 10 bcm) also contributed to phase out Russian gas.  

Figure 1 - Russian pipeline phase out progress 2023 vs pre-crisis 

Source: ENER B4 and Joint Research Centre, based on ENTSOG data 

1 

 
 
 
 
 
Global gas markets remain tight and are expected to remain as such for some time as limited new 
LNG liquefaction capacity globally is planned to be operational before 20261. The supply shock 
resulting from Russia’s invasion of Ukraine led to high and volatile gas and electricity prices in 
2022  and  2023,  with  a  peak  experienced  in  summer  2022  when  prices  spiked  above  300 
EUR/MWh.  Summer  and  autumn  2023  still  saw  episodes  of  significant  volatility  when  prices 
increased by more than 50% in a matter of weeks2. Gas prices are still prone to volatility and higher 
than pre-crisis with inevitable consequences on citizens and the competitiveness of industries. 

There are other remaining risks with varying degrees of probability that, if they materialise, may 
contribute to tightening the delicate supply and demand balance reached. These risks include: a 
rebound  in  Asian  LNG  demand  which  would  reduce  the  availability  of  gas  on  the  global  gas 
market, a cold snap in the remainder of the winter which could lead to an increase of gas demand, 
extreme weather conditions potentially affecting hydropower storage or low nuclear production 
availability  requiring  higher  recourse  to  gas-fired  power  generation,  and  further  possible  gas 
supply disruptions, including a complete halt of gas imports from Russia or a disruption of existing 
critical infrastructure in the gas sector.  

The likelihood of such disruptions to existing critical infrastructure is difficult to assess but can be 
illustrated by two recent examples that occurred since the adoption of the first Demand Reduction 
Regulation (EU) 2022/1369. In September 2022, the NordStream 1 pipeline was sabotaged to such 
a  degree  that  it  cannot  transport  any  gas  in  the  foreseeable  future.  In  October  2023,  the 
Balticconnector,  an  important  pipeline  connecting  Finland  to  Estonia  with  a  capacity  of  ca.  7 
mcm/d, was disrupted. An ongoing investigation is examining whether the damage was external 
and made by a vessel’s anchor. As a result, Finland is still not able to meet the N-1 criterion as 
part of the infrastructure standard defined in Article 5 of Regulation (EU) 2017/1938 and declared 
the second highest crisis level, as per Article 11 of Regulation (EU) 2017/1938. Finland relies now 
for  its  gas  supply  exclusively  on  their  LNG  import  capacity,  predominantly  through  the  Inkoo 
LNG terminal with a capacity of ca. 13 mcm/d, for a peak day demand of ca. 9-12 mcm/d. The 
Balticconnector is expected to return to operation only after the winter of 2023/2024. 

Furthermore,  since  the  adoption  of  the  previous  report  reviewing  the  Demand  Reduction 
Regulation3, the geopolitical landscape has further deteriorated. Armed conflicts of high intensity 
have hit several supplying and transit regions such as the Middle East and the Red Sea, in addition 
to Russia’s war of aggression against Ukraine.  

1 IEA World Energy Outlook 2023 indicates that 250 bcm/y of liquefaction capacity is expected to come online before 
2030, the vast majority of which is only expected in between 2025-2027. 
2 Episodes of significant volatility occurred e.g. after strikes at Australian LNG facilities were announced in September 
and after the Balticconnector disruption and Hamas attack in October. 
3 Report COM(2023) 173 and SWD(2023) 63, reviewing Regulation (EU) 2022/1369. 

2 

 
 
 
 
 
Threats to the security of gas supply of the EU have also been highlighted by the International 
Energy Agency (IEA) in a report in December 20224, which warned against complacency in the 
light of the improvement of the situation compared to the peak of the crisis in summer 2022. This 
was followed by the IEA’s Gas Market Report of Q1-20245, where IEA indicates that global gas 
supplies remain tight as an increase in global liquefaction capacity (+13 bcm) was not sufficient 
to cover a 38 bcm decline in Russian pipeline gas to the EU. Despite high storage levels in the EU, 
risks of late-winter cold spells and unexpected supply constraints still remain in a tight market, 
according  to  the  IEA.  In  addition,  the  European  Network  of  Transmission  System  Operators 
(ENTSOG) published its 2023/2024 Winter Supply Outlook with a summer overview6, in which 
it indicated the importance of demand reduction for storage filling and security of supply in the 
EU, even though the general security of supply situation in the EU has significantly improved.  

In this context, the significant reduction in demand for natural gas (-18% between August 2022 
and  December  2023)  has  been  essential  to  preserving  the  delicate  gas  balance  in  the  EU.  In 
particular,  a  continuous  gas  demand  reduction  throughout  the  injection  season  of  2023  was  a 
primary driver of achieving record high storage filling by 1 November 2023 (99%). This demand 
reduction has also contributed significantly to sensible storage management throughout the first 
part of the winter season 2023/2024, which are still at ca. 70% full by 1 February.  

4 How to Avoid Gas Shortages in the European Union in 2023 – Analysis - IEA. 
5 https://iea.blob.core.windows.net/assets/601bff14-5d9b-4fef-8ecc-d7b2e8e7449a/GasMarketReportQ12024.pdf . 
6 https://www.entsog.eu/outlooks-reviews#winter-outlooks-and-reviews . 

3 

 
 
 
 
 
III.  Voluntary demand reduction measures implemented by Member States 

In accordance with Article 7(2) of the Demand Reduction Regulation, prolonged by Regulation 
(EU)  2023/706  of  30  March  2023,  Member  States  were  required  to  update  their  national 
emergency plans established by Article 8 of Regulation (EU) 2017/1938 to reflect the voluntary 
demand  reduction  measures  they  had  implemented.  In  the  previous  report  on  the  Demand 
Reduction Regulation7, the Commission already outlined the measures taken by Member States 
and reported at the time of writing of the report. The measures included among others:  

1.  Information campaigns to raise awareness among consumers.  
2.  Heating and cooling limitations in e.g. public buildings.  
3.  Fuel switching and an acceleration of energy efficiency measures.  

Since the 2023 report on demand reduction, several newly submitted national emergency plans 
largely  include  similar  measures  as  were  outlined  in  the  national  emergency  plans  submitted 
previously and highlighted in Report COM(2023) 173, namely:  

•  Awareness raising campaign to stimulate a reduction of gas consumption among consumers.  
•  Further funding for energy efficiency measures, for industries, district heating as well as for 

households.  

•  Expansion  of  funding  and  auctions  for  renewable  energy  sources,  as  well  as  increased 

financial support for the roll out of heat pumps.  

•  Rebate on gas and electricity bills in case of a reduction in consumption and/or higher tariffs 

for those that have significantly increased consumption.  

•  Facilitation of return or prolonged lifespan of power plants to reduce and substitute the gas 
consumption  of  Gas-Fired  Power  Plants  (GFPPs),  either  returning  from  reserve  into  the 
market or those destined to shut down into reserve.   

•  Temporary  higher  capacity  use  of  ultra-high  voltage  electricity  grids,  to  facilitate  the 

participation of certain power plants into grid reserve.   

•  Relaxation of environmental standards to facilitate fuel switching.  
•  Obligatory electricity consumption reduction in public buildings.   
•  Premiums to feed biomethane into the network, to replace natural gas.  

7 Report COM(2023) 173.  

4 

 
 
 
 
 
IV.  Demand reduction – sectoral analysis 

Between August 2022 and December 2023 (17 months), EU Member States reduced overall gas 
consumption by 18% (ca. 101 bcm). Figure 2 presents the change in natural gas consumption since 
the implementation of the Council Regulation (EU) 2022/1369 on coordinated demand-reduction 
measures. 21 MS reached the 15% voluntary reduction target.  

Figure 2 - Change in natural gas demand between August 2022 and December 2023 (17 months) compared to 
the same period of the 5-year average by Member State 

20%

10%

0%

-10%

-20%

-30%

-40%

-50%

Change in natural gas demand

Voluntary target

Source: ENER Chief Economist, based on Eurostat (series nrg_cb_gasm) 

According to the 2022 Energy Balance, 36% of natural gas was used by households and services, 
32%  was  for  electricity  and  heat  generation,  and  23%  in  the  industry  (only  energy  use).  The 
sectoral breakdown of gas demand for the industry, residential and power sectors is essential to 
understand the impact of the demand reduction measures on the EU social-economic welfare. It 
allows  Member  States  and  the  European  Commission  to  better  understand  the  nature  of  the 
reductions  and  possibly  identify  any  challenges.  In  the  absence  of  sufficient  and  frequently 
reported official statistical data submitted to Eurostat for the purpose of this analysis, the Joint 
Research Centre estimated the sectoral breakdown of gas demand reduction for 2022-23 based on 
9  EU  MS  or  80%  of  the  EU’s  natural  gas  consumption.8  According  to  those  estimations,  the 

8 The 9 EU Member States are Belgium, Germany, Greece, Spain, France, Croatia, Italy, Hungary and the Netherlands. 
The analysis is based on public data reported only by their national transmission system operators which enable the 
estimation  of  industrial  and  residential  gas  consumers.  The  analysis  is  complemented  with  Eurostat  data  of  gas 
consumption for power generation. 

5 

 
 
 
 
residential  and  industrial  sectors  contributed  respectively  43%  and  47%  to  overall  demand 
reductions while the power sector contributed 10% (see Figure 3). 

Figure 3 - Sectoral contribution to gas demand reduction (EU9) between August 2022 and September 2023 

Note: The analysis includes 9 MS or 80% of EU gas demand. The MS are BE, DE, EL, ES, FR, HR, IT, HU and NL. 
Source: Joint Research Centre, based on Eurostat and ENaGaD database 

Residential / temperature  

Gas  consumption  in  the  residential  sector  is  strongly  correlated  with  the  outside  temperature. 
According  to  the  data  supplied  by  the  Joint  Research  Centre,  the  winter  season  of  2022/23 
experienced a 7% reduction in heating-degree days (HDDs) compared to the five-year average, 
suggesting  a  slightly  milder  winter.9  During  the  initial  two  months  of  the  2023  winter  season, 
heating degree days were also 9% lower than the five-year average. At the same time, gas demand 
reductions amounted to 19% (winter 2022/23) and 22% (first two winter months 2023/24) which 
indicates that gas demand reductions were more substantial than weather variations, partly due to 
the above-mentioned measures. 

Power sector  

Throughout 2022, the dispatch of gas-fired power plants remained relatively stable indicating a 
stable  generation  despite  increasing  gas  prices.  Challenges  in  curbing  gas-to-power  were 
exacerbated by the limited availability of nuclear capacity and due to diminished contribution from 
hydropower. The additional wind and solar capacity added in 2022 had a counteractive effect and 
contributed to the additional production of 65 TWh (based on ENTSO-E), notably preventing a 
further increase in gas consumption.  

The electricity mix in 2023 changed in  comparison to the previous year due to the progressive 
return of nuclear capacity, high hydropower levels and further renewables deployment. Figure 4 

9 ENER/CET calculations based on Eurostat series NRC_CHDD_M. Note that Eurostat calculates the EU-total as 
the space-weighted (geographic) average of the data for the individual member states. In the context of the present 
analysis, such a weighting is inappropriate. We have therefore re-calculated an EU total as the average of the 
individual member states, weighted by their population (demo_gind). 

6 

 
 
 
 
presents the change in power generation by generation type in 2023 compared to the 5-year average 
and 2022. Relative to the year 2022, nuclear generation in the EU witnessed a surge in output by 
7  TWh,  with  French  nuclear  power  plants  reaching  a  dispatch  close  to  the  5-year  average  in 
September  2023.  Hydropower  generation  increased  by  41  TWh  capitalizing  on  elevated  water 
reservoir levels in comparison to 2022. Power generation from solar and wind increased by 28 and 
35 TWh, respectively. In 2022, the installation of solar and wind capacities had already attained 
41.5 and 15.5 GW, respectively. Notably, in 2023, there was further augmentation in deployment, 
with an additional 53.5 and 16.0 GW of capacity added to the EU electricity system. 

Figure 4 - Change in power generation by generation type in 2023 (January to November) 

h
W
T

 100

 50

 -

-50

-100

-150

 vs. 2022

 vs. 5y average

Note: Power generation data for December is not yet available. 
Note 2: Solar generation does not account for behind-the-meter power generation. 
Source: ENER Chief Economist, based on ENTSO-E Transparency Platform 

The progressive return of nuclear and hydropower generation in 2023, coupled with the ongoing 
deployment of renewables throughout the period, exerted downward pressure on natural gas for 
power and heat generation. Furthermore, there was a reduction in electricity demand by 6% over 
the same period, resulting in diminished requirements for gas consumption in the power sector. 

Consequently, there was a decrease of around 9% (9 bcm) of gas demand for power and heat since 
August 202210 in comparison to the 5-year reference period.   

Industry  

77%  of  annual  industrial  gas  consumption  was  used  in  five  energy-intensive  subsectors11: 
chemicals, non-metallic minerals, food products, basic metals and paper products. The use of gas 
is  closely  linked  to  the  level  of  industrial  production  activity.  Figure  5  presents  the  change  in 
industrial production of overall manufacturing and energy-intensive sub-sectors between August 
2022 and September 2023 in comparison to the 5-year average. 

10 The reporting of gas consumption in the power sector lags behind the overall gas consumption reporting. Therefore, 
the timeframe includes only the period from August 2022 to October 2023. 
11 Energy Balance 2021 

7 

 
 
 
 
Figure 5 - Change in industrial production in overall manufacturing and energy-intensive sub-sectors 
between August 2022 and September 2023 in comparison to the 5-year average 

Source: ENER Chief Economist, based on Eurostat (series sts_inpr_m) 

The decline in energy-intensive industrial production resulted in decreased use of gas, mainly in 
the  five  energy-intensive  sub-sectors.  Figure  6  presents  monthly  gas  consumption  in  the  five 
energy-intensive subsectors indexed in relation to the 5-year reference period. It can be observed 
that the chemicals and basic metals subsectors have decreased gas consumption early during the 
crisis,  followed  only  in  more  recent  months  by  the  paper  products  and  non-metallic  minerals 
subsectors.  The  decrease  in  natural  gas  demand  has  materialised  across  most  energy-intensive 
industrial  subsectors  in  recent  months,  likely  indicating  a  more  structural  decline  in  industrial 
activity in chemicals, non-metallic minerals, basic metals and paper products. Since the overall 
voluntary demand reduction goes beyond 15%, there was room for industrial demand to recover 
within the scope of the voluntary target, which thus far did not transpire.  

It is important to note that the decreased gas consumption due to lowered industrial activity has 
further been complemented by accelerated energy efficiency measures and/or fuel switching due 
to the energy crisis. However, due to the lower gas price industries with dual fuel capability which 
switched fuels in 2022 or 2023 are expected to switch back to gas due to its lower price. 

Figure 6 - Estimated monthly gas consumption in energy-intensive subsectors in EU27 

Source: ENER Chief Economist, based on Eurostat 

8 

 
 
 
 
V. 

Security of supply outlook for 2024-2025 

Since  August  2022  and  the  entry  into  force  of  the  Gas  Demand  Reduction  Regulation  until 
December 2023, gas demand in  the EU  dropped  by 18% (ca. 101 bcm)  compared to  pre-crisis 
levels. Gas demand reduction, as further outlined in sections 2 and 4, of all contributing factors 
substituted Russian gas supply most (see Figure 1). 

Further decrease or a total halt of Russian imports, as part of efforts of the EU to phase out Russian 
dependency,  or possible  unilateral  supply cuts  from  Russia  as  experienced in  2022-2023, is an 
important scenario to analyse when looking at the security of gas supply of the EU. Russian supply 
disruptions are in particular a relevant scenario to consider (as simulated in Figure 7), due to the 
end of the current transit agreement through Ukraine by 31 December 2024 (one of the remaining 
two  Russian  supply  corridors  –  ca.  15  bcm/y).  Escalating  geopolitical  tensions  may  thereafter 
create even higher risks of further supply cuts from Russia. Therefore, while other scenarios could 
occur, e.g. a disruption of the Ukraine transit route alone, the likelihood of a full Russian supply 
disruption scenario, regardless of the cause of the disruption, significantly increased compared to 
last year and is essential to consider for the security of supply of the EU.  

For  this  reason,  it  is  essential  to  consider  gas  demand  sensitivities  when  preparing  for  future 
winters. This year, ENTSOG Winter Supply Outlook 2023-2412 has been complemented with a 
summer overview and concludes that in case of a full Russian pipeline disruption, storages would 
need  to  be  filled  at  46%  at  the  beginning  of  the injection  season  together  with  a  15%  demand 
reduction, strong LNG supplies and enhanced capacities, to reach the required 90% at the start of 
the gas winter at the end of September 2024. Figure 7 presents the storage filling projections under 
different  scenarios  of  continued  demand  reduction,  without  prejudice  to  the  market  or  policy 
means that may be used to achieve this reduction, based on latest available market intelligence 
data and assuming a full Russian pipeline supply disruption.13 Those scenarios result in a storage 
level of 49% full at the end of the winter (31 March 2024), considering the high storage levels 
reported on 16 December 2022 and based on the experience of 2023 (EU average was 56% on 1 
April 2023). However, the average storage level on 1 April of the reference period14 was 33%. It 
should also  be  noted  that several  publications15 point  to global  gas  production and liquefaction 
capacities not increasing significantly before 2026, meaning that natural gas availability is likely 
to remain limited until the winter 2026-2027. 

12 https://www.entsog.eu/outlooks-reviews#winter-outlooks-and-reviews   
13 Assumptions: 

•  Storage levels as of 08 December 2023 (91.3%) 
•  Pipeline supply (other than Russia) is the average between January 2022 and October 2023 
•  No Russian pipeline supply as of the start of the simulation 
•  LNG supply is equal to maximum LNG supply in 2023. 
•  Average EU27 gas demand of the reference period, applying percentage reductions as stated. 
•  Exports to Switzerland, Ukraine and Moldova based 2022/23 flows. 

14 The reference period is from 2016-2021; 
15 IEA publication, GIIGNL publication. 

9 

 
 
 
Figure 7: Monthly storage levels depending on the continuation of demand reduction 

Note: The figure depicts storage levels at the end of each month. 
Source: ENER Chief Economist, based on Eurostat, AGSI and market intelligence data on gas flows 

Figure 7 explores three scenarios: 

•  “No continued demand reduction” scenario: Russian pipeline imports are disrupted and 
the reduction in gas demand does not continue beyond 31 March 2024. This would lead to 
storage  level  falling  to  64%,  well  short  of  the  90%  target  by  1  November  2024,  and 
completely depleted by February 2025. 

•  “Continued  demand  reduction  until  November  2024”  scenario:  Russian  pipeline 
imports are disrupted and  with  a  continuation  of gas demand reduction until November 
2024 achieves the storage target  of November  but  quickly depletes afterwards reaching 
only  around  10%  of  filling  levels  by  end-March  2025.  Which  would  therefore  risk  the 
security of gas supply of the EU for the following winter 2025-2026. 

•  “Continuation of demand reduction to March 2025” scenario: The scenario in which 
Russian  pipeline  imports  are  disrupted  and  with  a  continued  15%  demand  reduction, 
storage levels reach the November storage target. Furthermore, the storage levels could be 
around  36%  by  the  end  of  March  2025.  Which  can  be  considered  as  an  adequate  level 
before the 2025 injection season. 

10 

-60%-40%-20%0%20%40%60%80%100%JanuaryMarchMayJulySeptemberNovemberJanuaryMarchMayJulySeptemberNovemberJanuaryMarchMayJulySeptemberNovemberJanuaryMarch2022202320242025HistoricalScenario "No continuation"Scenario "Continuation until Nov"Scenario "Continuation until Mar"Minimum filling target 
 
 
 
 
Those scenarios consider key elements of security of gas supply such as the evolution of the storage 
levels through the winter and the developments regarding the Russian and the global gas supply. 
Furthermore, there are an additional culmination of downside risks for the security of supply of 
the EU to consider that could happen on top of the aforementioned scenarios, such as potentially 
increased  global  LNG  demand  and  a  certain  rebound  of  industrial  gas  demand.  A  particularly 
significant uncertainty is the weather, as a colder than average winter 2023/24 or 2024/25 would 
have a significant impact on the EU’s security of gas supply. Assuming a 15% reduction and the 
highest demand for each month between 2014 and 2021, annual demand could increase by 28 bcm. 
ENTSOG’s Winter Supply Outlook confirms that in case of a cold winter, a 15% demand reduction 
is necessary for the gas network to be capable of satisfying demand and reaching at least a 30% 
storage filling level.  

Therefore,  although  the  EU  has  limited  leverage  to  increase  the  global  gas  supply,  storage 
management (supported via the Storage Regulation’s16 amendments to the Gas Security of Supply 
Regulation and storage trajectories) and demand reduction proved effective to ensure the security 
of gas supply of the EU since the beginning of the crisis. They remain important tools, should 
storage  levels  reach  inadequate  levels  during  the  remainder  of  winter  2023-2024,  or  should 
downside  risks  materialise.  However,  markets  are  responsive  to  price  increases,  which  may 
facilitate sufficient demand reduction in case downside risks materialise. 

Furthermore,  ACER  insists  in  its  opinion17  on  ENTSOG’s  Winter  Supply  Outlook  2023-2024: 
“The materialisation  of  […] risk factors  may lead to  supply scarcity  […]. Forced gas demand 
reductions would come next and involuntary demand curtailment of non-essential gas consumers 
would be a last resort emergency measure”. Acer also calls for “continued vigilance with respect 
to gas supply situation and for monitoring the implementation of the EU gas demand reduction 
regulation”.  

16 Regulation (EU) 2022/1032 of the European Parliament and of the Council of 29 June 2022, amending 
Regulations (EU) 2017/1938 and (EC) No 715/2009 with regard to gas storage. 
17 ACER_Opinion_11-2023_on_ENTSOG_Winter_Supply_Outlook_2023-2024.pdf (europa.eu) 

11 

 
 
 
 
 
VI.  Conclusion 

To mitigate the serious security of supply risks in 2022, in the context of REPowerEU, the EU 
adopted Regulation (EU) 2022/1369 in order to reduce gas demand by 15%. In March 2023, the 
EU  decided  to  prolong  this  reduction  through  Regulation  (EU)  2023/706,  considering,  among 
others, the urgent  need to refill  storages  and remaining tightness in  the  market  due to  e.g. low 
hydro and nuclear availability.  

This report indicates that, while the security of supply situation has improved thanks to targeted 
investments and a number of measures - including the reduction target of the Demand Reduction 
Regulation which has been exceeded by Member States - the situation remains delicate. This is 
partly due to global gas markets still being tight and expected to remain as such until 2026 when 
new  liquefaction  capacities  will  come  online.  There  are  other  remaining  risks  that,  if  they 
materialise, may contribute to further tightening the supply and demand balance, such as further 
possible gas supply disruptions, including a halt of Russian gas imports or a disruption of existing 
critical infrastructure in the gas sector, a rebound in Asian LNG demand, a cold winter and low 
hydropower  storage.  Furthermore,  the  wider  geopolitical  landscape  has  further  deteriorated,  as 
armed conflicts of high intensity have hit several other supplying and transit regions, such as the 
Middle East and the Red Sea. 

Demand reduction has significantly contributed to phase out 65 bcm of Russian gas in 2023, which 
was primarily achieved by households and in the industrial sector. Moreover, to guarantee a high 
level of winter preparedness and to ensure that Member States comply with the 90% storage filling 
target of 1 November 2024, EU storages must remain at a sufficiently high level through the winter. 
In 2023, like in 2022, demand reduction has been pivotal to end the winter with adequate storage 
levels and to provide the necessary flexibility in summer so that the 90% storage target could be 
met, while keeping prices to lower levels and containing volatility. Demand reduction also helped 
reaching  the  storage  target  in  August,  well  ahead  of  November.  This  also  led  to  EU  market 
participants storing gas in Ukraine at the end of summer 2023, mutually reinforcing the security 
of gas supply of the EU and Ukraine.  

Furthermore, it is essential to consider the Demand Reduction Regulation together with the effects 
of the Storage Regulation. Both elements are part of the security of supply architecture of the EU 
and  mutually  reinforce  each  other.  Gas  demand  reduction  gave  Member  States  and  market 
participants the required flexibility to meet the storage targets while preserving the already tight 
global gas market from additional pressure.  

Should the supply situation remain tight or further deteriorate and put the 90% storage target of 
November  2024  at  risk,  demand  reduction  will  continue  to  play  an  essential  role  in  2024  and 
beyond to stabilise the gas market.  

12