Planned EU investments in LNG risk increased dependency on US at worst possible time

Today, the European Commission released its Affordable Energy Action Plan, which includes a controversial proposal to purchase long-term Liquefied Natural Gas (LNG) contracts and invest in LNG export infrastructure, including in the US as confirmed by Commissioner Dan Jørgensen at the press conference. Though improving energy affordability is key with up to 1 in 4 households in the EU not able to adequately heat, cool or light their homes, gas investments have the opposite effect. This move rather seems to represent a surrender to pressure from the Trump administration, which threatened to impose tariffs if the EU doesn’t increase its purchases of US LNG.

Reacting to the draft version of the plan leaked last week, civil society organizations warned that this move directly undermines the EU’s energy security, affordability and climate goals while exposing European taxpayers to significant financial risks.

The plan references the “Japanese model” of using public money to invest in LNG abroad, despite Japan being heavily over-contracted on LNG and relying on offloading surplus gas to less lucrative markets. With EU gas demand already in structural decline—with a 19% drop in LNG imports in 2024 and a 20% reduction in overall gas consumption between 2021 and 2024—these investments risk creating stranded assets at taxpayers’ expense, while replacing dependency on gas imports from one unreliable regime for another.

This decision also breaches the EU’s G7 commitment to end international public support for fossil fuels and threatens to unravel the progress made through the Clean Energy Transition Partnership (CETP). This initiative launched at COP26 has helped cut international fossil fuel funding by two-thirds—about $15 billion per year—since it began, in part thanks to leadership by EU countries.

The US Department of Energy’s own 2024 LNG Export Study shows that increasing US LNG exports will lead to increased emissions, displacing renewable energy and raising energy costs for EU consumers due to the expense of liquefaction, shipping, and regasification.

Moreover, US LNG—predominantly derived from fracked gas—has been estimated to have a greenhouse gas footprint 33% worse than coal when accounting for methane leaks across the supply chain. As such, long-term purchasing contracts risk failure of compliance with the EU Methane Regulation that will restrict imports of high-methane gas from 2027 onwards. US gas industry attempts at self-regulation have been exposed as deeply flawed and untrustworthy, and have led to misleading branding of some gas streams as “certified” or “responsibly-sourced.”

Despite the Commission’s push, this deal is far from finalized. Movements across Europe and the U.S. are mounting resistance to LNG expansion, challenging permits, blocking construction, and demanding environmental justice. These communities, along with a growing coalition of environmental groups, climate scientists, economists, and progressive lawmakers, are highlighting the environmental racism inherent in many LNG projects and their incompatibility with Paris Agreement goals. Their unified message is clear: investing in fossil fuel infrastructure that would operate for decades is neither economically sound nor aligned with the urgent climate action needed to protect life on this planet. The EU should instead develop a concrete plan for phasing out fossil fuels entirely, a key step towards energy affordability, security and a liveable planet.

Statements:

Laurie van der Burg, Global Public Finance Program Manager at Oil Change International, said:
“With this plan the EU is not supporting energy affordability or security, it is bowing to pressure from the Trump administration and lining the pockets of the fossil fuel industry. By increasing investments in US LNG to replace Russian gas, the EU would be trading a volatile, expensive and polluting energy source from one unreliable regime for another, deepening its reliance on risky LNG imports. These investments will lock Europe into unstable energy prices for decades while jeopardizing our climate goals. It would also unravel recent progress in restricting international finance for fossil fuels. This plan must not become a reality. The EU should instead focus on real solutions for energy affordability and security: accelerating investments in renewables, energy efficiency and phasing out fossil fuels.”

Roishetta Ozane, founder of Vessel Project of Louisiana and Co-Director of Gulf Fossil Finance Hub, said:
“In my community, LNG has brought more than just terminals and pipelines; it has ushered in a wave of health crises, environmental degradation, and economic disparities. My children are struggling with respiratory issues, eczema and my son has epilepsy. Our water is contaminated and we’re forced to purchase water in plastic bottles. All while the promise of jobs feels hollow against the backdrop of our poisoned land. We deserve better than to be collateral damage in the pursuit of energy profits. Enough is enough.”