A recent study by management consultancy Boston Consulting Group (BCG), detailed in the German business publication Handelsblatt, highlights significant economic repercussions stemming from Europe’s shift away from natural gas. The research indicates that the region is increasingly reliant on short-term gas purchases, resulting in higher prices compared to other global regions.
The BCG investigation, conducted independently, reveals that 28 percent of the EU’s current gas demand is not covered by long-term supply contracts. This contrasts sharply with other nations; India secures just 17 percent of its gas needs through spot market purchases, while China’s figure stands at 12 percent. Japan, according to the study, has even secured more gas at fixed prices than it requires, eliminating the need for short-term trading.
The analysis also identifies the gas price thresholds at which specific industries begin to experience shrinking profit margins, potentially leading to losses. The aluminum and basic chemicals industries, refineries and paper production facilities are particularly vulnerable, with a wholesale gas price of €60 per megawatt-hour predicted to push their profit margins into negative territory.
