With global gas demand nearing its peak, experts are pointing to the potential for a “triple win” in climate, economy, and energy security—as long as policy-makers around the world seize the moment to cut their consumption by 110 billion cubic metres per year until 2030.
“Global peak gas demand is in sight already,” writes climate think tank E3G, in a recent blog post that heralds the end of the “golden age” of gas. “Countries have the tools to bring it forward in line with climate-safe pathways—while also improving economic and energy resilience.”
That means “the focus of international collaboration should now be on ensuring that all countries have access to a future free from volatile and polluting fossil gas.”
The International Energy Agency (IEA) projected in 2022 that gas consumption in a business-as-usual scenario would peak around 2030, E3G notes. But more recent trends show that all-time maximum could hit sooner, “with the next two years key to locking in this development.”
The global market for fossil gas—aka natural gas—was significantly altered after Russia’s invasion of Ukraine, explains E3G. The IEA’s 2023 gas security review found that demand growth between 2020 and 2024 was 40% lower than pre-war projections. In the European Union, demand dropped 13% in 2022, driven by cuts in Russian supply. “Almost one third of this change was structural, due to increased efficiency and accelerated renewables deployment,” with a further decline expected this year.
Meanwhile, the United States’ Inflation Reduction Act is projected to erode gas demand by 12% between 2022 and 2030. In Asia, demand growth is still expected, “but projections are revised down yearly.” As key markets reduce demand, the “golden age of gas is ending,” E3G says.
But to bring emissions down to meet the targets in the 2015 Paris Agreement, global gas demand must drop 19% by 2030, and peak demand must occur far ahead of the decade’s end, E3G says. Particularly because fossil gas is a major source of climate-busting methane emissions, remaining on the net-zero path will require global demand to fall by 110 billion cubic metres (bcm) per year, to 3,268 bcm in 2030.
Slashing demand carries benefits beyond climate mitigation, stresses, since “volatile gas prices impact the entire economy.” They increase production costs for industry, and last year, they contributed to an 18% annual increase in food prices in Europe.
“Some EU countries saw households’ energy bills double their income share” despite government subsidies, the blog post states. And when Europe outbid Southeast Asian countries for liquid natural gas (LNG) in a rush to replace Russian pipeline gas, LNG and electricity prices spiked in Japan and Korea. “This caused profound economic disruption, energy rationing, and lengthy blackouts in some countries.”
While complete energy independence may be impractical, writes E3G, “reducing dependence on gas imports, and helping vulnerable importers to do the same, is a safe way to minimize risks for all.”
To hasten changes on the scale that is needed, “structurally reducing demand should become a focus of international collaboration,” E3G says. With Europe and the United States together accounting for nearly a third of global gas demand, and already structurally reducing gas usage, “they should double down on plans and share them with other G20 nations, responsible for another 40% of global gas demand.”