Is there an LNG revolution happening on Europe’s shores? At the start of 2024, it certainly seems so.

Liquified natural gas (LNG) terminals are popping up all along European coasts. Supplied with LNG imported from the U.S. (as well as Qatar and Australia), they are ensuring that Europe’s decoupling from Russian gas is not a temporary fad, but a permanent feature. Whether the terminals will help the EU become green and energy-independent, however, is a different matter.

The role of LNG is becoming crucial in Europe’s energy mix. As recently as a year ago, two dozen new or expanded LNG terminals were planned across the European Union as Russia’s invasion of Ukraine made Russian gas unpalatable for Europeans. Now, the terminals are becoming operational, and more LNG is flowing into the EU. LNG imports to Europe had already shot up 60% in 2022, the International Energy Agency said. In 2023, growth continued, albeit at a much lower pace. (Overall, natural gas represents about a quarter of the EU’s overall energy consumption, the EU calculated.)

The trend is most apparent in Germany, Poland, and the Baltics. Germany alone is responsible for well over a third of the newly installed LNG capacity. And combined with Poland and the Baltic states, it’s added more than half of Europe’s new LNG capacity in recent years. (The EU’s total gas demand is 400 billion cubic meters; 50 bcm in new capacity is planned in those few countries alone through 2026.)

If Russia is the loser in this new scenario, the U.S. is the winner. The United States overtook Qatar to become Europe’s most important supplier of LNG. And Europe is now the U.S.’s most important LNG export market. That relationship will only grow more important in coming years, a BCG partner specializing in geopolitics and trade, Tim Figures told me over the phone from London this week.

“What we’re looking at is the diversification of European energy imports. The U.S. will play a much greater role [in it] than before. It’s the rebalancing of not buying gas from Russia,” Figures said. By 2032, EU imports of U.S. energy are predicted to almost double, to around $114 billion, he said. 

What does this all mean for the future of the EU economy? In the near term, allies like the U.S. will make up for the drop-off of Russian gas in the form of LNG. But in the long run, it’s unclear whether the LNG rush is all so favorable.

Imports are imports; they don’t do much to improve energy security and independence. And while natural gas may be cleaner than oil or coal, it is still a fossil fuel. If Europe is serious about becoming energy-independent and building a sustainable economy, it will need fixes beyond a plethora of new LNG terminals.

More news below. 

Peter Vanham
peter.vanham@fortune.com
@petervanham

TOP NEWS

Is PepsiCo engaging in shrinkflation?

Carrefour and PepsiCo are breaking up over “shrinkflation.” Last week, Carrefour halted sales of PepsiCo products in four countries, blaming the food manufacturer for “unacceptable” price increases. PepsiCo later claimed that the suspension was due to the failure to agree to a new contract. Amid the drama, E.Leclerc, France’s largest supermarket chain, has promised to keep stocking PepsiCo products. Fortune

French brandy comes under fire

A tit-for-tat trade war between the European Union and China is now coming for French brandy. Last week, China said it would launch an anti-dumping investigation into European brandy. Beijing’s order follows a European investigation into Chinese electric cars to determine whether Chinese-made vehicles from companies like BYD are unfairly supported by state subsidies. Fortune

Macron reshuffles

French prime minister Elisabeth Borne resigned on Monday ahead of an expected cabinet reshuffle. Gabriel Attal, formerly the country's education minister, will now be France's youngest and first openly gay prime minister. President Emmanuel Macron had a difficult 2023, struggling with mass protests around proposed pension reforms and left-wing discontent over a tough immigration bill that would, among other measures, limit state benefits for recent immigrants. In his New Year’s address, Macron characterized his reforms as “unpopular,” yet “necessary.” Politico

AROUND THE WATERCOOLER

Commentary: Despite Europe’s economic woes, consumers are sticking to their guns on sustainability by Thomas Körmendi

Britain’s richest businesswoman—who earns more than Mark Zuckerberg and Sundar Pichai—sees salary rise to $280 million despite her betting firm making a $76 million loss by Eleanor Pringle

‘What planet does he live on?’ Bank boss sparks fury after saying it’s ‘not that difficult’ to buy a home in cost-of-living crisis-hit U.K. by Prarthana Prakash

‘Europe’s Detroit’ fears EV impact as nearly 750,000 auto workers exposed to a market ‘changing dramatically’ by Bloomberg

Shipping giant Maersk’s stock buoyed by halt of Red Sea journeys following Houthi rebel attacks—but it may be bad news for inflation by Prarthana Prakash

Supermarket boss says thieves are becoming more ‘sophisticated’ as losses from shoplifting exceed profits: ‘You sometimes fall over in shock to witness how creative people are’ by Ryan Hogg

This edition of CEO Weekly Europe was curated by Nicholas Gordon.