Germany warns Canada that Europe's appetite for natural gas is set to shrink

A top German envoy is pouring cold water on calls for Canada to ramp up natural gas exports to Europe.

In a briefing for journalists at Germany's embassy in Ottawa on Friday, Jennifer Morgan, the country's state secretary and special envoy for international climate action, warned that Germany and Europe will require less natural gas from countries like Canada in future.

"All studies show that the market is going to shrink," Morgan said. "Germany will be driving forward on renewables, and gas demand will decline."

Morgan, a U.S.-born former head of Greenpeace International, is Germany's first special envoy for international climate policy. She represents Europe's biggest economy and largest emitter and works frequently with her Canadian counterpart, Environment and Climate Change Minister Steven Guilbeault.

Morgan said that, like Canada, Germany has a binding law on reducing emissions — but it intends to achieve net-zero by 2045, half a decade before Canada expects to hit that target. She suggested the role natural gas plays in Germany's economy is set to diminish.

"It is a part of the transition, but it is not the long term," Morgan told reporters.

She cited studies and projections showing that Germany is expected to reduce its gas imports by 30 per cent by 2030 and 96 per cent by 2050. She said Europe is also expected to reduce natural gas imports by about 25 per cent by the end of this decade.

Morgan said these are projections, not targets.

Europe's waning appetite for natural gas can be attributed in large part to Russia's war on Ukraine. Russia was once a significant supplier of natural gas to Europe; it has been accused of throttling that supply in retaliation for crippling sanctions imposed by Germany and other Western allies.

More than 40 per cent of Europe's natural gas came from Russia before it launched its full-scale invasion of Ukraine in 2022. That share of the European natural gas market has now plummeted to less than 15 per cent. Norway became the EU's top gas supplier in 2023, followed by the United States and North Africa.

When asked whether Germany needs Canadian natural gas to replenish its stockpiles, Morgan said her country increasingly relies on renewables.

"We need to continue to have imports on LNG in the future, but currently, our gas reserves are full," Morgan said.

Morgan cited Germany's growing reliance on energy efficiency measures and renewables in its electricity grid, saying these now account for 60 per cent of electricity output.

The envoy's remarks would come as no surprise to energy market experts, who have argued that Canadian liquefied natural gas won't address the European Union's short-term energy needs.