Apr 9, 2025
The EU may combine its demand for US natural gas during trade negotiations.
The European Union may think about consolidating the demand of its member states for U.S. liquefied natural gas (LNG) during negotiations with President Donald Trump to avoid a trade conflict, Lithuania's energy minister informed Reuters on Tuesday.
When EU ministers gathered on Monday to discuss the bloc's reaction to Trump's proposed 20% tariffs on most EU goods, EU trade commissioner Maros Sefcovic mentioned that LNG could be included in the negotiations.
On the same day, Trump stated that the EU would need to purchase American energy, which could help lessen the U.S. trade deficit with the EU.
The U.S. has already become the largest supplier of LNG to Europe, accounting for 45% of the EU's LNG imports last year.
Zygimantas Vaiciunas noted that the EU's strategies to encourage the acquisition of U.S. LNG might involve "demand aggregation," in which the European Commission would gather LNG requests from various EU nations or the entire bloc to make a more substantial demand for supplies.
"I believe that would be a topic for future discussions regarding demand and potential management of demand in the regions or across the whole EU," Vaiciunas explained.
The EU does not directly purchase gas; this is handled by companies and traders through commercial agreements. However, since 2023, Brussels has implemented a collective gas purchasing initiative aimed at enhancing the negotiating power of member countries.
While individual firms finalize contracts, the EU initiative collects demand from European companies and aligns it with offers from global gas suppliers.
U.S. LNG has become increasingly vital to the EU following Moscow's invasion of Ukraine, which compelled Europe to lessen its reliance on Russian pipeline gas.
Ukraine is also seeking to import significant amounts of U.S. gas this year through terminals located in countries like Germany, Poland, and Lithuania, a senior Ukrainian energy official disclosed to Reuters last month.
Vaiciunas mentioned that the EU might also contemplate revising its methane emissions regulations that some U.S. firms claim pose compliance challenges.
"There are new regulations that have additional thresholds for U.S. LNG to enter the European market. So, this is a potential area for change," Vaiciunas said, referring to the EU's methane law.
He added that the European Commission has yet to initiate discussions with EU governments about how LNG could play a role in trade negotiations with the U.S.
Starting this year, the EU requires importers of oil and gas to report the methane emissions linked to those imports. Some U.S. LNG exporters have indicated that the fragmented structure of the country's gas industry prevents them from tracking emissions along their supply chains, all the way back to the extraction sites.
When EU ministers gathered on Monday to discuss the bloc's reaction to Trump's proposed 20% tariffs on most EU goods, EU trade commissioner Maros Sefcovic mentioned that LNG could be included in the negotiations.
On the same day, Trump stated that the EU would need to purchase American energy, which could help lessen the U.S. trade deficit with the EU.
The U.S. has already become the largest supplier of LNG to Europe, accounting for 45% of the EU's LNG imports last year.
Zygimantas Vaiciunas noted that the EU's strategies to encourage the acquisition of U.S. LNG might involve "demand aggregation," in which the European Commission would gather LNG requests from various EU nations or the entire bloc to make a more substantial demand for supplies.
"I believe that would be a topic for future discussions regarding demand and potential management of demand in the regions or across the whole EU," Vaiciunas explained.
The EU does not directly purchase gas; this is handled by companies and traders through commercial agreements. However, since 2023, Brussels has implemented a collective gas purchasing initiative aimed at enhancing the negotiating power of member countries.
While individual firms finalize contracts, the EU initiative collects demand from European companies and aligns it with offers from global gas suppliers.
U.S. LNG has become increasingly vital to the EU following Moscow's invasion of Ukraine, which compelled Europe to lessen its reliance on Russian pipeline gas.
Ukraine is also seeking to import significant amounts of U.S. gas this year through terminals located in countries like Germany, Poland, and Lithuania, a senior Ukrainian energy official disclosed to Reuters last month.
Vaiciunas mentioned that the EU might also contemplate revising its methane emissions regulations that some U.S. firms claim pose compliance challenges.
"There are new regulations that have additional thresholds for U.S. LNG to enter the European market. So, this is a potential area for change," Vaiciunas said, referring to the EU's methane law.
He added that the European Commission has yet to initiate discussions with EU governments about how LNG could play a role in trade negotiations with the U.S.
Starting this year, the EU requires importers of oil and gas to report the methane emissions linked to those imports. Some U.S. LNG exporters have indicated that the fragmented structure of the country's gas industry prevents them from tracking emissions along their supply chains, all the way back to the extraction sites.