The Role of Natural Gas in the Socio-Technical Transition to a Carbon-Neutral Society and a Review of the European Union’s Framework

Abstract

The urgent need for a significant reduction in global greenhouse gas emissions indicates that the change in the world’s energy mix is inevitable. In the power production sector, this would be achieved through decarbonization with renewables, and within the transport sector, this would be achieved by switching to alternative fuels and electric vehicles. However, this transition is neither fast nor cheap, and it will be gradual. The main goal of this article is to propose a feasible change in the present energy mix and to compare natural gas with other fuels used in power production and transport. The strengths, weaknesses, opportunities, and threats of the current system (traditional fossil fuels) and the potential future system (higher share of natural gas) in energy generation and transport were identified, and the influence of recent global trends was analyzed. Natural gas seems to be a viable solution that can help in the transition to a zero-carbon-emissions society.

1. Introduction

The currently prevailing public perception of fossil fuels as having negative environmental impacts poses pressure on the present world energy mix, with it being declared as unsustainable and unacceptable in the long run. The present energy mix is often mentioned in the context of climate change, global warming, and poor air quality.

Replacing fossil fuels is not a simple task. In some branches of industry or in agriculture, a viable replacement is virtually non-existent. However, that is not the case for electricity production and transport. For these, a solution exists: decarbonization and a switch to alternative fuels, respectively [1,2,3]. It is, nevertheless, paramount to understand that these processes take time. It is impossible to jump to a new energy mix in the snap of a finger. It is therefore necessary to go through a transitional period, in which fossil fuels will probably still be in use, but their share in the energy mix will continuously decrease.

Natural gas can be seen as a viable fuel for the above-mentioned transitional period [1,4,5]. Natural gas has a significant role within the sectors of electricity production and transport, and in this study, the status of natural gas within the European Union will be further analyzed, along with the socio-technical feasibility of transition to natural gas in electricity generation and transport sector, with a special focus on heavy road and marine transportation. Europe sees natural gas as a means of achieving security of supply, strengthening industry competitiveness, and supporting economic growth; therefore, it plans to finance liquefied natural gas (LNG) as a fuel. There are several drivers that influence the increased use of LNG in marine transportation, and in Europe, some of them are directed towards the acceptance of LNG as a marine fuel, while others inhibit its wider use. For example, from an environmental aspect, emission control regulation favors the use of LNG, as stricter regulations related to regional shipping promote cleaner fuels such as LNG. Likewise, from the point of view of infrastructure and technology, domestic natural gas consumption guarantees that the infrastructure is developed across the fuel cycle. However, the social (climate) driver, which is greenhouse gas (GHG) policy activity, favors an even more radical (but less realistic) fuel switch, negatively affecting the further introduction of LNG as a marine fuel. Natural gas prices may or may not favor fuel transition to LNG in marine transportation, depending on its competitiveness. From a maritime demand aspect, growth in major port activity caused by the increasing demand for goods trading will lead to growth in marine fuel consumption [5].

It is expected that the gas industry will undergo some significant changes as the EU develops into a low-carbon economy. The two main drivers of the stable gas demand foreseen by 2030 are the chain substitution of coal with gas in power plants and the stability that gas provides when combined with variable renewables. However, the gas demand by 2050 will greatly depend on the emission reduction target. Biogas, synthetic methane, blue and green hydrogen, and biomethane are all viable replacement fuels for natural gas. While biomethane and biogas can readily be used, significant infrastructural adjustments should be made in order to enable wider hydrogen usage. Additionally, the production of blue hydrogen is not a carbon-neutral process, no matter the carbon capture and storage (CCS) technology applied. The biggest challenge in green hydrogen production is ensuring enough feasible renewable electricity. Low- and zero-carbon gaseous fuels can be used in the industrial, building, transport, and power sectors, and the level of use will depend on the availability, costs, acceptability, convenience, and the infrastructure option that the EU and its member states will opt on [4].

It can be assumed that low global natural gas demand, caused by slow economic growth, along with increased supply, lead to low prices. In the long term, low gas prices affect the supply. Despite the predictions of a decrease in gas consumption, Europe is projected to be more than 80% dependent on gas imports by 2035. This is mostly because domestic reserves are being depleted, and it is not highly likely that Europe will pursue unconventional resources [6]. A significant cut in the gas supply after Russia’s invasion of Ukraine led to instantaneous gas price increases but actually resulted in 13% reduced demand in the EU compared to 2021. Part of this reduction can be attributed to mild weather, but it was also observed that, probably due to record high gas prices, there has been a certain fuel switch in the residential and commercial sectors. Fuel switching in the most gas and energy-intensive industries accounted for 30% of the overall decline, but this switch primarily concerned oil products [7].

Despite efforts and wishes to reduce our environmental footprint, it is still not feasible to completely switch to renewable energy sources. One of the obstacles of relying solely on renewable energy sources in the future is the existing electric network, which is not adjusted for production–consumption balance issues that burden most sources of renewable energy production. This economic aspect still limits the wider use of renewable energy sources [8].

One aspect that should be analyzed in more detail is the social price of the transition, i.e., the impact on the general population, not only in the economic sense but also on the overall quality of life. This also includes jobs lost and jobs created as a result of a certain change. For example, one estimate [9] suggests that it is possible to achieve an addition of 410,000 job positions in the EU by implementing policies that support renewables. Another example can be that of emerging cheap air travel (the result of subsidies and tax exemptions), leading to the growth of airline industry and eventually to more job losses in the case of climate policy strengthening, including a stronger lobby against it [10].

Natural gas simply stands out as the best transitional fuel, and it makes sense to analyze the feasibility of reduction in traditional fuel use in electricity generation and truck and ship transport, as well as its replacement with the cleanest fossil fuel. The relationships between current political, economic, market, and regulatory frameworks relevant for electricity generation and transport, as well as a potential future system more reliant on natural gas, are examined in this paper.

2. Materials and Methods

The full background (including geopolitical and global pictures) of the status of natural gas as a fuel is given in this section in order to observe and analyze all possible strengths, weaknesses, opportunities, and threats in the current landscape that dictate the share of natural gas in energy generation and transport systems. The method used for combining all the findings and analyzing their relationships is described in the last part of this section.

2.1. The Role of the World Energy Mix in Greenhouse Gas Emissions

Anthropogenic emissions of greenhouse gases (GHGs) are one of the most prominent problems of the modern world. Countries around the world are thus required to achieve significant cuts in their GHG emissions (50–80%, according to most publications) in order to mitigate all the irreversible effects on the climate [11,12,13].

The last two decades were the warmest in recorded history. Global warming has also increased the frequency of extreme climate-related events. In the past several decades, vast parts of Europe suffered droughts, while others struggled with floods. We do not need to look far back in the past to list a few examples of extreme weather in Europe and in the world. Hurricane Ophelia from 2017 was the first in history to strike Ireland. Only a year later, Hurricane Leslie struck Spain and Portugal, countries that had not experienced such weather-related phenomena in over two centuries. In the year 2017 alone, weather-related incidents affected the European economy, with a staggering EUR 283 billion in various expenses, affecting about 5% of the population. And both the number of expenses and the affected population are predicted to drastically rise in the future if no further actions are taken.

The summer of 2023 hit record high temperatures globally, and wildfires destroyed over 460,000 hectares of forest [14]. Floods in Somalia and Kenya; Storm Cirian in Europe; Hurricane Otis in Mexico; a landslide in Cameroon; Cyclone Mocha in Myanmar; torrential rainfall in Italy; floods in India, many parts of Africa, and Libya; wildfires in Chile; ice storms in Texas; and rainfall that caused landslides and floods in Brazil all caused a significant number of deaths only in the last twelve months, in addition to a list of other weather events that luckily only caused material damage [15].

Scientists and other experts agree that the average temperature of the atmosphere has already risen by 1 °C (compared to the pre-industrial era). They have also come to a conclusion about the trend of the temperature increase: 0.2 °C per decade. In other words, if we maintain the status quo, the average atmospheric temperature will have risen by 2 °C by the year 2060 [16].

This would have catastrophic consequences on the world as we know it. Coral reefs would vanish, the melting of the ice caps in Greenland and in the northern and southern-most parts of the world would cause average sea levels to rise by about 6 m, and deserts would rapidly spread [17]. One thing is clear—we must do something, preferably by changing the present energy mix.

But despite the urgency expressed above, it is still important to try to remain realistic. The world cannot just jump to a new energy mix, and there are plenty of reasons why. Those reasons can be examined within the sectors of electricity production and transport.

2.1.1. Natural Gas in Electricity Production

With the current state of technology, it is impossible to economically convert existing power plants from mostly fossil fuels to mostly (or completely) renewable resources. There are still technological and economic barriers to cross with renewables, and natural gas can help in overcoming them. It is paramount to note, however, that these barriers should not be used as arguments against renewables, but rather be perceived as negative feedback to a beta test—something that would tell us how to better a product.

First and foremost, there is energy output. Renewables still yield (much) less energy than conventional plants.

Table 1. Average energy outputs for different types of power plants, as well as their average capital costs in 2021 [18].

Fuel and Plant Technology	Average Power Output [MW]	Average Capital Cost per kW ($/kW) of Installed Power	Power-to-Unit-Investment Ratio Multiplied by 1000
Coal/30% sequestration	650	$5633	115
Coal/90% sequestration	650	$7319	89
Natural gas/Combined cycle	418	$1330	314
Natural gas/Advanced, combined cycle	1083	$1176	921
Natural gas/Advanced, combined cycle with sequestration	377	$3140	120
Fuel cells	10	$7291	1
Nuclear	2156	$7777	277
Battery storage	50	$1270	39
Biomass	50	$4998	10
Geothermal	50	$3403	15
Hydropower	100	$3421	29
Wind/On-shore	200	$2098	95
Wind/Off-shore	400	$6672	60
Solar PV/Tracking	150	$1448	104
Solar PV/Fixed tilt	150	$1808	83

shows average power outputs for different types of power plants in the USA, as well as average capital costs. The green color shows the fuel and technology that has the highest average power output, lowest average capital cost per kW of installed power, and the highest (the best) power-output-to-investment-cost ratio.

As shown in Table 1, the average power output of conventional plants is significantly higher than the one of renewables. Judging by this table alone, it seems as if natural gas is the best option across the board (the one with the best power-to-price ratio). However, this analysis does not reflect the influence of the operational cost, i.e., the cost of fuel supply, which is dependent on its price.

Next, there is the problem of intermittency. Putting aside the need for a smart grid and its cost and imperfections for a moment, a more fundamental problem lies here. There are presently two conceivable solutions to the intermittency problem: (1) energy storage in times of great production; and (2) producing electricity in conventional plants in times of need. Energy storage basically continues to remain at its technological/commercial inception and does not seem to be a viable option at the moment, but it will be increasingly significant, especially after 2030. Therefore, we must have a squadron of conventional plants as a back-up in order to ensure that the entire system works at all times. And the best fuel for these plants is natural gas, being the cleanest of all the fossil fuels (as well as technologically simpler and less controversial than nuclear energy).

Furthermore, it is a fact that various rare-earth metals are required for building the technology for renewables. These and some other materials used for building typical wind or solar farms are, at present time, very much non-renewable. Metal recycling is a process still at its inception; therefore, for the most part, mining for new amounts of metals is constantly required. More often than not, global reserves of these metals are scattered across different countries in the Global South, where mining is not conducted under good practices, and workers are at times exploited [1].

Finally, there are some negative (or rather controversial) effects that renewables have on the environment and on living beings. With regard to the environment, there is a problem of gross acreage that renewable plants occupy. A study was undertaken [13] where the concept of “power density” was used (how many watts of energy a plant produces compared to how many squared meters of land it occupies). As it turned out, an average wind or solar farm occupies about 90 to 100 times more space than an average gas power plant (for the same power output). The study came to the conclusion that natural gas has the best “power density” of all fuels. Regarding living beings, wind farms are responsible for the deaths of tens of thousands of birds each year—many of which fall into an endangered species category (for example, the American bald eagle). Moreover, there is a phenomenon connecting wind farms and certain ailments that people report experiencing (once a new wind farm has been established near them). These ailments include insomnia, high blood pressure, dizziness, partial hearing loss, and nausea. Even though experts claim that there is no direct causality between those ailments and wind farms, the fact remains—people are experiencing health problems they have not previously experienced [19,20].

These are just some of the reasons why the world cannot just momentarily become 100% renewable. There must be a certain transitional period, which, in all honesty, may last for years and in which we will still use mostly conventional fuels. However, in that period, effort must be made to continuously increase the share of renewables and cut the share of coal and oil in electricity production, because these remain the biggest polluters. Natural gas seems to be the best option for helping renewables take the stage.

2.1.2. Natural Gas in Transport

Natural gas as an alternative fuel is not a viable option in every branch of transport. Airplanes and rockets at the present time cannot use anything other than kerosene and rocket fuel, respectively; the technology is just not available yet. Trains have mostly switched to electricity; therefore, the reduction in emissions is being satisfied in that regard. Cars are also slowly transferring to electricity, with more and more hybrid models and companies like Tesla and Rimac focusing solely on developing electric cars. Although research [3] has shown that the total cost of ownership (TCO), i.e., cost of acquisition and the cost of maintenance of an electric vehicle is currently higher than the TCO of a conventional vehicle, the perception of electric cars as greener compared to traditional ones make them attractive. The “greenness” of electricity used in cars can be questioned [21], but, for now, the support for the electrification of cars is growing, with China’s large economy being the best example [22]. This leaves us with trucks and ships—and there lies a great potential for natural gas. The existing plans for improving the compressed natural gas (CNG) and LNG network are proof that Europe still relies on gas [3].

Due to its size, it is, at present, impossible to manufacture an electric truck; the batteries are not satisfactory for that heavy a vehicle. The majority of the trucks today are fueled by diesel, and there are plans to stop using diesel for trucks after 2040 in the EU. However, there is a more ecological solution now—natural gas. Indeed, trucks can be fueled by either CNG or LNG. Therein lies the first question: how much “more ecological” is natural gas propulsion?

Table 2. Comparison of GHG emissions from trucks, depending on propulsion fuel and technology [23].

	Low Upstream Emissions (18.8 g CO2 e/MJ)	Medium Upstream Emissions (19.4 g CO2 e/MJ)	High Upstream Emissions (24.6 g CO2 e/MJ)
BAT diesel truck	948 g CO2 e/km
HPDI LNG truck	−2.7%	−2.0%	+4.4%
SI LNG truck	+4.4%	+5.1%	+11.5%
SI CNG truck	−2.4%	−0.7%	+7.9%
Average diesel truck	1001 g CO2 e/km
HPDI LNG truck	−7.9%	−7.2%	−1.1%
SI LNG truck	−1.1%	−0.4%	+5.6%
SI CNG truck	−7.5%	−6.0%	+2.2%

BAT = best available technology. HPDI = high-pressure direct injection, the best available technology for natural gas trucks. SI = spark ignition, a common technology for natural gas trucks.

shows a comparison between diesel and natural gas trucks when it comes to emissions. Three outlined scenarios take natural gas upstream emissions into account as well.

It is important to note that the numbers vary greatly from one publication to another, and the presented one is more on the critical side towards natural gas. Even still, natural gas technology yields lower emissions in almost all of the cases when compared to an average diesel truck. Natural gas technology is young when compared to diesel; therefore, it is reasonable to expect further developments and an even wider gap between the two when it comes to emissions. Further developments would also, of course, be encouraged by promoting and investing in the increase in natural gas shares in the energy mix.

The current constraints, when it comes to natural gas trucks and their outreach, are twofold: infrastructure and capital costs. Infrastructure-wise, the problem is that there are not enough filling (bunkering) stations for natural gas trucks (especially for LNG). The players in the gas sector do not want to develop a substantial bunkering grid without the matching demand, and trucking and truck-producing companies do not want to invest in and develop natural gas trucks without the possibility to fill them anywhere. Although much is being done in recent years (with the project EU Blue Corridors and others), there is still much work to be done if a more significant presence of natural gas trucks is to be achieved. Regarding the capital costs, an average natural gas truck is about $20,000 to $40,000 more expensive than an average diesel truck. However, natural gas was, until the European energy crises in 2022, a much cheaper fuel in most countries; therefore, it has this advantage, and gas prices have been declining again since the beginning of 2024. It is hard to perform the exact calculations, but assuming a truck travels about 100,000 km in a year, the return on investment for a natural gas truck would happen within two to four years [12].

By 2019, more than 80% of the entire world’s ship fleet was fueled by marine fuel. The remainder was fueled mostly by marine gas oil (MGO). LNG as a fuel was used almost exclusively on LNG carriers. In the MARPOL Annex VI, dealing with air pollution from ships, the IMO prescribed a maximum of 0.5% of sulfur in ship’s fuel, a measure that has been in force since 1 January 2020 (with some parts of the sea having an even tougher regulation, with a 0.1% maximum). In the next stage of international shipping regulation changes, the foreseen measures include the Energy Efficiency Existing Ship Index (EEXI), the enhanced Ship Energy Efficiency Management Plan (SEEMP), and the Carbon Intensity Indicator (CII) rating scheme. These are believed to help reduce the carbon emissions intensity of all ships by 40% by 2030 compared to 2008 [24]. In order to meet those stringent benchmarks, shipping companies have three options: (1) switch to LNG as a fuel; (2) add special cleaners to ships’ exhaust lines (scrubbers); (3) use additionally refined MGO. The latter is really only a short-term solution, because even additionally refined MGO creates emissions in quantities which will probably soon become unsatisfactory. Similar to trucks, LNG is cheaper than marine fuel or MGO, but capital costs for LNG-fueled ships are greater (even when the price is corrected for scrubbers). The positive difference is that the bunkering grid for ships is more ubiquitous than the one for trucks. Ultimately, it is up to the shipping companies to make a choice.

However, there is a significant difference when emissions are taken into account.

Table 3. Comparison of GHG emissions from ships depending on propulsion fuel and technology [23].

	Low Upstream Emissions (18.8 g CO2 e/MJ)		Medium Upstream Emissions (19.4 g CO2 e/MJ)		High Upstream Emissions (24.6 g CO2 e/MJ)
Methane slip	Low methane leakage	Double methane leakage rate	Low methane leakage	Double methane leakage rate	Low methane leakage	Double methane leakage rate
	1.8%	3.5%	1.8%	3.5%	1.8%	3.5%
LNG compared to Marine fuel + cleaners	−10.4%	−0.6%	−9.6%	+0.3%	−7.9%	+1.5%
LNG compared to MGO	−4.7%	+5.7%	−3.7%	+6.8%	−0.9%	+9.3%

shows a comparison between LNG and marine fuel with the added cleaners, as well as between LNG and MGO. In addition to upstream emissions, methane slip is also taken into account (the amount of methane that ends up in the atmosphere due to technical imperfections in the system).

As Table 3 shows, the difference between LNG and other fuels is significant (especially when compared to marine fuel, which powers most of the world’s fleet). Methane slip plays a huge role, and that is an important issue to address. By advancing technology and training the personnel working on ships, methane slip could likely be decreased even more (even to under 1.8%). However, Table 3 shows only GHG emissions, and there are other sources of pollutant emissions. An LNG-powered ship produces, on average, 90% fewer emissions of NOx compounds than a ship powered by marine fuel (even if the latter has all the built-in cleaning technology). It also produces fewer particulate matter emissions [23]. Further emission reduction can be achieved by mixing the fuel with liquefied bio-methane [25].

From everything shown and for the time being, it seems that natural gas is the best ecological solution for heavy trucks and long-distance ships; at the same time, it is acceptable from an economic standpoint too. While air travel for technological reasons remains fossil-bound, and cars and trains switch to electricity, the only ecological option for trucks and ships remains natural gas.

2.2. The Status of Natural Gas in the European Union

Natural gas should be recognized as an environmentally acceptable fuel in the European Union’s legislative framework, in order to encourage the fast deployment of natural gas-fired power plants and trucks and ships, especially considering that the EU is a significant importer of natural gas, meaning that the stronger penetration of natural gas in the existing world energy mix is beneficial for both the EU and natural gas-producing regions. Figure 1 shows the evolution of electricity (EEX DE) and natural gas (TTF) prices in the last couple of years, along with associated relevant events affecting price trends. Natural gas and electricity prices depend on supply and demand, just like in any other market, but unlike other markets, supply is much more susceptible to geopolitical events, and demand is driven by weather conditions and the price of alternative energy sources.

2.2.1. Natural Gas in the Present-Day EU

When it comes to reserves of natural gas within the EU, the statistics are admittedly not optimal. In 2020, the approximate proven natural gas reserves were 440 billion cubic meters (bcm) (or 15 trillion cubic feet) [27], and in 2022, natural gas reserves (proven and probable) were estimated to be 695 bcm [28]. Most EU countries fall into the category of having only 0 to 20 bcm of natural gas in their reserves. Many of them, however, are actually close to 0—like Portugal, Sweden, Belgium, Finland, Slovenia, Luxemburg, Greece, etc. The only EU member state which has significant natural gas reserves is The Netherlands. Of the above-mentioned 695 bcm of natural gas reserves, around 25% are The Netherlands’ reserves. The Netherlands could, in theory, supply their neighboring countries with some natural gas, but earthquakes remain a huge obstacle. After numerous earthquakes affected the province of Groningen (where the Groningen gas field is located), the experts came to a conclusion that the activity on the field is at least in part correlated with earthquake frequency—making the earthquakes, in a way, anthropogenic. This information triggered large protests across The Netherlands, with many demanding a total shutdown of the production from the Groningen field. The government, in an attempt to save the extremely gas-dependent economy, managed to continue production initially, but declared the closure of the wells in October 2023 because the neighboring residents continued to complain. However, the option is retained to reactivate the wells in exceptional cases in winter [29,30]. Domestic production in the EU is in decline, and the most recent decrease (i.e., increase in gas import dependency) can be explained by the lower production cap in The Netherlands and the reduction in production volumes across other EU countries, such as Romania, Germany, Italy, and Denmark [31].

Figure 2 shows the EU and UK gas supply portfolio with detailed information on the origin of import in 2021 and the first half of 2022.

As it can be seen, in 2021, the EU and UK together imported about 84% of the total natural gas supplied, which indicates a great dependency on natural gas imports. All the projections for the future show that domestic production will continue to fall until it completely ceases, making the EU more and more dependent on imports. Many natural gas critics use this fact as an argument against it. It should be noted that Japan, for example, has always imported all of its natural gas, but nevertheless remains one of the strongest economies in the world. Many countries around the world import all kinds of goods—which does not automatically make them weak. So, even though it is better if a country can simply tap into its own reserves for any given natural resource, there is nothing shameful or inherently bad about being dependent on imports.

As shown above, the EU’s import portfolio was very diverse before the Russian–Ukrainian war. Russia, Norway, and northern Africa (or rather Maghreb) all provided plenty of options for LNG imports at any given time and yielded a secure supply. However, since April 2022, there has been a significant reduction in imports via Russian pipeline, which was partially offset by a notable reduction in natural gas demand [32]. On the other hand, gas trade in various physical and virtual hubs located inside the EU, paired with the great interconnectivity, allows individual member states to easily and quickly overcome any sudden shortages of natural gas—by, if necessary, even directly contacting the suppliers.

Table 4. Europe’s primary energy consumption by source in 2022 [33,34].

2022
Oil	Natural Gas	Coal	Nuclear	Hydro	Renewables	Total
478.1	267.0	150.8	118.4	56.2	186.5	1257
[mtoe]

shows the primary energy consumption by source within Europe in 2022.

As can be seen, natural gas provides the second-highest amount of energy in the total mix. But, the problem is the high share of coal and oil. Even though coal is by far the biggest polluter, it still remains strong in third place—a source for about 12% of the total energy consumed in 2021. Furthermore, oil, being the second-biggest polluter in the table, is still a source for about 33% of the total energy consumed. So, two of the biggest polluters still hold almost half of the energy mix. The data for 2022 show an increase in oil share, where fossil fuels comprise 70% of the primary energy consumption mix [34]. Therein lies the gravest problem of Europe’s (and, in turn, the EU’s) energy mix.

Renewables’ share in the energy mix grows yearly. The EU is enacting strong measures to implement renewables as much as it can across the board—which is certainly admirable. However, when it comes to natural gas, some EU member states have made some questionable decisions. One example is Energiewende, Germany’s clean energy program. From its inception in 2010, Energiewende significantly increased renewables’ share in the country’s energy mix. However, GHG emissions, even a decade later, remain almost the same as in 2010. In the past decade, Germany closed numerous gas and nuclear power plants (the cleanest of the conventional plants) and opened coal plants instead. So, even though they increased renewables’ share, they completely missed the actual, fundamental goal behind Energiewende—to reduce emissions [1].

Similar situations arose in other member states as well (Spain, The Netherlands, Bulgaria) [1], all of which undoubtedly had good intentions, as did Germany. As a country tries to implement more renewables, it places a serious strain on its budget, while at the same time, it is still in need of its conventional plants, at least as back-up. There are two solutions to the economic strain: cut costs elsewhere within the energy sector, or increase taxes on all forms of energy and every possible aspect of the energy sector. Member states mostly pursued both, but the former solution—coal, being the cheapest of all the fuels—prevailed. Coal plants overtook gas and nuclear plants in numerous places. An important lesson, it seems, arises as follows: increasing renewables’ share in the energy mix is merely a defeat masquerading as a victory, if there is not a consequent decrease in GHG emissions.

It seems that not only Europe faces difficulties in its attempts at phasing out coal, as research shows that Turkey will continue to use coal for some time unless market-driven (geo)political decisions come into force [35].

There are two means of mitigating coal and oil emissions. The first one is the EU Emission Trading System (ETS). The EU ETS is a “cap and trade” system, meaning that it aims to enforce the following principle: the polluter pays for the pollution. Currently, the EU ETS covers approximately 40% of EU’s GHG emissions by establishing a carbon pricing mechanism, or, in other words, by monetizing GHG emissions. The traded commodity within the EU ETS is the EU allowance (EUA) which represents a permit to emit one ton of CO₂ equivalent. There is an arbitrary, limited number of EUAs (a cap) within any given year in the EU that decreases by a linear reduction factor in order to comply with the EU climate goals. Each actor in the EU ETS receives, on January 1st, a certain number of freely allocated EUAs. That number, in essence, delineates how much one can pollute free of cost. The aforementioned quantity is defined by applying the benchmarking approach. In other words, each unit of product has a defined carbon footprint (benchmark) based on the average GHG emissions from the top 10% of EU ETS actors that manufacture that product. This implies that actors who meet the benchmark will receive all EUAs without charge. In contrast, actors failing to meet the specified criteria will be allocated a reduced amount of EUAs, necessitating them to reduce their emissions, acquire EUAs, or a combination of the aforementioned options. Even though the ETS had some performance problems in the past, the EU Council committed to changing and fixing the problems in this decade. We strongly anticipate their compliance, as there is no stronger incentive for changing inappropriate business practices than experiencing financial consequences.

The second option is the IED (Industrial Emissions Directive). It promotes the following principle: the polluter should pay for the pollution they cause. It prescribes to the member states how they should control and reduce GHG emissions, or, in other words, how they should force their industrial sectors to go green. However, the IED is still imperfect and needs further improvements; so, in 2022 the Commission adopted proposals to revise the IED. The proposals mainly refer to energy, water, and material efficiency and reuse, but also to promoting the use of safer, non-toxic (or less toxic) chemicals in industrial processes [36].

After the signing of the Paris Agreement in late 2016, it became apparent that the EU’s laws regarding ecology are a bit outdated—the EU was not going to fulfil its long-term promises regarding emission cuts. So, the gradual change began. Immediately after signing, the EU Commission proposed “Clean Energy for All Europeans”—a set of legislations which shaped the EU’s climate and energy policy until 2020 and beyond. In the spring of 2019, the last part of the legislation was accepted by the EU Council and implemented into EU law. The basis of that set of legislation was renewable energy, energy efficiency, and ecology—they are an underlying theme in every piece of legislation within the set. However, there is no mention of any conventional fuel whatsoever. It is highly unlikely that the transition toward renewables would happen without the use of conventional fuels. Despite the failure of “Clean Energy for All Europeans” to even mention conventional fuels, a rumor started to circle around the European gas sector that the new EU Commission would take care of the gas sector by including them in the plans for the future [1].

However, this first set of legislation does not guarantee the success of the transition process, and it can be argued that the current low-carbon transition pathways at international and national scales are limited by communities rejecting technology and the lack of financing. The risks of transitions must be identified, and the potential impact of those risks must be assessed in order to increase the chance of a successful transition [37]. Research [38] has shown that economic growth and the increase in energy demand (consumption) have a strong positive correlation with CO₂ emissions and should be first offset by increasing energy efficiency. Considering the limitations of this research, these results are only applicable for countries in the north Africa region and the Middle East.

For the time being, all the known benefits of stronger renewables implementation have proven insufficient to stimulate greater interest in such projects, meaning that a seamless transition to a zero-carbon economy is virtually impossible without a deep mindset change in the final consumers [39].

In support of that, it was found [40] that a successful increase in renewables’ share is a matter of the whole system, including industry, policy, and education. On the other hand, a study [41] showed that interest in environmental issues among the young population exists, meaning that effort must be made today to enable a gradual transition to tomorrow’s sustainable community.

Furthermore, a study [42] revealed that most transition goals will barely be achieved through the support of green infrastructure projects such as wind power and photovoltaic systems, meaning that the efficiency of each green technology is highly area-sensitive and, therefore, cannot be easily transferrable. This is to prove that a well-established and readily available energy supply/demand chain such as a natural gas network (with the addition of CCS technologies) currently represents a reasonable compromise between secure energy supply and environmental impact, at least until more favorable conditions occur for the full transition.

2.2.2. The Future EU’s Energy Mix

It is always difficult and inaccurate to predict the future, especially when considering 10, 20, or 30 year predictions. To generate an even remotely accurate prediction about the future energy mix, one has to have ample knowledge not just about the energy sector, but also the economy, politics, ecology, and even social studies like psychology and sociology (which study the creation of trends and consumer behavior). Therefore, it is better to analyze the programs/documents that are already in place to pave the way or, rather, to steer the future in a certain direction. One such program is the EU’s Green Deal, proposed by the new EU Commission and Mrs. von der Leyen.

In examining the EU’s Green Deal text [43], it seems that conventional fuels have once again been left out. The gas sector was mentioned only once, in a sentence: “...the decarbonization of the gas sector will be facilitated, including via enhancing support for the development of decarbonized gases, via a forward-looking design for a competitive decarbonized gas market, and by addressing the issue of energy-related methane emissions”. The document speaks in great volumes about renewables and climate neutrality—a goal that the EU has set for itself by the year 2050. While that is certainly admirable, little is said about how such a complex project will be technologically achieved or funded. It is said that the program will require “approximately EUR 260 million a year of additional investments, to complete 2030 climate and energy targets”. So, these investments are additional to all of the ongoing energy-related investments. How much will it cost to achieve the 2050 targets (climate neutrality)? The 2030 targets (50 to 55% reduction in emissions of GHGs compared to 1990’s levels) are rather conservative when compared to “climate neutrality”. In various parts of the document, it is said that the policy reforms that are about to come into effect will “encourage changes in consumer and business behavior and facilitate an increase in sustainable public and private investment”. Hopefully, “encourage” and “facilitate” will not be changed into “force”, considering the entirety of the document. Next, one of the suggestions is a “carbon border adjustment mechanism”. Basically, this mechanism would ensure that if an entity buys energy from outside of the EU (say, from Ukraine), then that entity would have to pay more than it usually would for importing that energy—because Ukraine likely does not follow the EU’s new and strict rules regarding ecology. That would, in turn, force (or “encourage”) entities to buy solely from the EU’s energy producers, regardless of the fact that it might be cheaper to import the energy. Such policies directly affect the free market and were rightfully recognized as dubious by the World Trade Organization—their potential implementation will be thoroughly monitored, so that the market truly remains free. Regarding transport, the document states that emissions of GHG from the sector must be reduced by 90% by the year 2050. The document suggests eliminating any tax exemptions for aviation and maritime fuels, as well as reducing the number of EUAs which airline companies receive for free inside the ETS. This measure seems rather harsh, considering that the transport sector accounts for only about 20% of the total GHG emissions in the EU, and any specific branch of transport accounts for, logically, even less. In addition, there simply are not any ecological solutions for the aviation sector, and punishing them for it seems short-sighted—because the only consequence will be that the prices for plane tickets will increase, and that will affect millions of regular people who fly above the EU every year. However, since the deliverance of the Deal, a series of laws, rules, and packages of measures were adopted to address each sector in more detail, such as European Climate Pact, rules for renewable hydrogen, the Net-Zero Industry Act, FuelEU Maritime, the REPowerEU Plan, regulations for the deployment of alternative fuels infrastructure (AFIR), the ETS Directive, MRV shipping regulations, the ETS Aviation Directive, regulations establishing a Social Climate Fund, regulations establishing a Carbon Border Adjustment Mechanism, ReFuelEU Aviation, etc. Finally, Member States are finalizing their National Energy and Climate Plans (NECPs), where the “Fit for 55” legislation should be implemented to demonstrate how the 2030 climate and energy targets will be met at national levels [44]. Although within these packages, hydrogen is mentioned as an alternative fuel due to its great potential to help meet climate goals [42], its wider use is not likely in the short run, considering the currently inadequate infrastructure, incomplete standards, and safety regulations [45]. Individual Member States have to decide on specific measures, and this decision certainly depends on the current technological, economic, market, and many other conditions. As natural gas use is already acceptable according to these criteria, it could also be seen as a viable option for achieving the emission reduction goals if combined with CCS. A higher share of natural gas in energy consumption should be encouraged through measures defined at national levels according to each Member State’s needs and possibilities. Of course, those measures should not be in contradiction with the EU’s regulation; however, the implementation of any technology must result in emission reduction considering the whole life cycle of a certain product, and the technology itself should be reliable, energy efficient, and, most of all, profitable or at least affordable. All of this is to say that the most realistic solution for the time being is natural gas, as reliance solely on renewables carries many risks that make that scenario unimaginable.

Some measures refer to sustainable solutions in cities, and infrastructure development plays an important role in the overall sustainability of cities and regions, meaning that strategic spatial planning is crucial in the energy transition process [46]. The political regime context should also not be neglected [47].

2.3. The Reaction of the European Gas Sector to Global Turmoil

From political, economic, market, and other points of view, the last few years have been rather eventful. After barely recovering from the shock caused by the forced adjustment to a new way of life during the COVID-19 pandemic, the world experienced further disruptions such as Russian–Ukrainian war and the most recent war in the Middle East. These circumstances influenced the economic and market landscape in general, and the energy sector was affected to a significant extent. The term European energy crisis is often used among professionals to refer to these circumstances.

2.3.1. Energy Sector and COVID-19 Pandemic

At the start of 2020, the European gas market was over-flowing with natural gas. An unusually mild winter had rendered domestic heating demand relatively low. This was coupled with previously unseen amounts of US LNG entering the European market. Gas prices fell to uncommonly low levels. This was the state of the gas sector when the pandemic struck the continent.

When various EU countries started declaring lockdown states, gas demand plummeted [48]. The shut-down of different businesses, shops, and office buildings erased their need for heating, so the heating-linked demand remained focused on households. However, with the weather remaining relatively mild throughout March and further, demand fell and stabilized at extremely low levels.

Gas-fired power plants also began operating at new lows. Electricity demand fell across the EU as well, with businesses shutting down and people remaining confined to their homes. The clean spark spreads for gas-fired plants hit multi-year lows in April. This means that in the short term, there was very limited opportunity to earn a profit from running gas-fired power generation [26].

With all of this happening, the major EU pipeline suppliers (mainly Russia’s Gazprom and Norway’s Equinor) released supply strategies for 2020, which indicated a purposeful cut in supply—because of the limited earning potential. North African suppliers also cut their volumes going toward Spain and Italy. Even the shipments of LNG from the US, which had started to arrive in greater volumes at the beginning of the year, were cancelled (shipments arriving in late May and June). All of the physical traders were looking for insurance by buying storage space across the continent. The European storage sites hit full capacity very early on in the summer—an unprecedented dynamic [26].

However, a few silver linings for natural gas in the EU existed. First, European hub liquidity soared. The Dutch TTF recently broke the record for the monthly traded volume—the highest of any European hub ever [49]. However, this was mostly due to an extremely high churn rate, created by the physical traders scrambling to adjust their hedges and financial players moving to exit positions and reducing exposure. However, high liquidity is a good and healthy sign on any market, no matter the cause.

Second, the TTF is strengthening its position as a global gas benchmark. This is mostly due to the decoupling of gas and oil prices—an effort that the EU gas market has been trying to achieve for some time. Since the beginning of the pandemic, gas prices have not suffered nearly as much as oil prices. Also, it was noted that Asian LNG prices started to correlate with the prices on the TTF—meaning that the players on the Asian market were starting to index their contracts to the TTF.

Finally, the transition to renewables took a hit with the pandemic. It is reasonable to expect that the pandemic would slow down the implementation of various legislations throughout the EU. However, with the pandemic behind us, clean energy generation is becoming a stronger priority for governments, and new regulations are regularly delivered. For the time being, the full transition to renewables seems unlikely; however, what can be achieved is a laying of the foundation for the subsequent energy transition to even cleaner energy generation. This could give natural gas its 15 minutes of fame, considering that the infrastructure is already in place and the costs of maintaining it are relatively low, the prices of gas itself are low, and it is the cleanest of all the fossil fuels.

In 2021, gas demand recovered, and in 2022, it fell below the 2021 level but was above the 2020 level [50]. The market reacted with a natural gas price increase in 2022. At the beginning of the year, the price at the TTF was well below 100 EUR/MWh, and after Russia’s invasion of Ukraine, it jumped to 200 EUR/MWh but soon levelized to around 100 EUR/MWh. The next price increase occurred in Summer 2022 with a maximum of over 300 EUR/MWh. Since then, the prices have been generally decreasing [26]. In August 2022, the European Union agreed to reduce natural gas demand by 15% by March 2023, but the deadline was extended first to March 2024 and then to March 2025 [51] despite the already significantly decreased natural gas consumption due to the reduced import of Russian pipeline gas and improved energy efficiency.

2.3.2. Energy Sector and Currently Raging Wars

Due to natural gas source diversification and the gas market’s globalization, it seems that natural gas is replacing oil as a macroeconomic and geopolitical asset. Gazprom lost its domination in the European market after Russia’s military invasion in Ukraine in 2022, and the biggest European gas supplier is now Norway. LNG’s share in European gas supply is on the rise, and one of the main consequences of this war is a dramatic change in market rules and dynamics [52].

The recent conflict in the Middle East has had a significant impact on natural gas prices, and at one point, they increased by 40%. In the case of a full-blown war, gas prices would likely skyrocket; however, they are not expected to stay at an excessively high price for long if the war is confined or at least if no further escalations occur [53].

Compared to the oil market, the natural gas market rises faster and falls slower. Although it will take some time to feel the full consequences of this turmoil, the current landscape is favorable for advancing toward green, or at least greener, energy. Expectations regarding the transition dynamics should be kept realistic, which makes natural gas the most logical choice of fuel during the transition to the low-carbon energy era. While energy producers are under pressure to promote renewable energy sources, it is still believed that the oil and gas industry will remain dominant in the following period [54]. Furthermore, the unknowns regarding the “climate-friendliness” of electricity production via renewable sources in the long run are still some of the most limiting factors preventing their stronger penetration into the energy mix.

2.4. The Method Applied for the Socio-Technical Transition Analysis

While many quantitative socio-technical energy transition models can be found in the literature, the quantification of model elements and the validation of the results remain the two most prominent challenges [55,56]. So, it was decided to try an approach that is reminiscent of an SWOT analysis, which is a widely accepted tool for strategic planning. Although the method is also burdened with quantification issues, the concept of applying the principles of SWOT analysis is attractive, as energy planning surely is a type of strategic planning.

By following a tool for analyzing the socio-technical transition [57], the transition process to cleaner fuel, i.e., natural gas, was systematically evaluated, resulting in graphical representations of the incumbent systems represented by traditional fuels in transport and electricity generation and niche systems represented by converting fully to natural gas in the stated sectors.

Having examined all the elements of socio-technical systems (actors, institutions, and infrastructure) and the socio-technical landscape (gradual factors and exogenous shocks), along with the relevant interactions as described, the strengths, vulnerabilities, and strategies of each system were easily identified.

Figure 3 shows the key elements and their interactions, identified strengths and vulnerabilities, and possible strategies for achieving the transition goal of replacing traditional fuels in transport with natural gas.

Although both systems have almost equally convincing pros and cons, the strategies of the niche system seem to offer more possibilities for development, which gives a reason for optimism that natural gas will indeed be recognized as a great alternative fuel.

Similarly, Figure 4 shows the key elements and their interactions, identified strengths and vulnerabilities, and possible strategies for achieving the transition goal of replacing traditional sources in electricity generation with natural gas.

When comparing these two systems, the strengths of the niche system seem to prevail over the strengths of the incumbent system. The strategies of the niche system might appear weaker at first sight, but the financial benefits are certainly the most significant factor in feasibility assessment.

It can be seen that the strengths of both incumbent systems (traditional fuels in trucks and ships transport and the use of coal and hydropower in electricity generation) are similar and can be attributed to the well-developed and established supply–demand chain. Likewise, the main vulnerability of both incumbent systems can be attributed to extremely negative environmental impact. Therefore, similar strategies could be applied to defend the existing systems and to inhibit the niche systems. Similarly, both niche systems (complete transition to natural gas use in trucks and ships transport and electricity generation) rely on almost the same strengths, meaning that, again, similar strategies can be applied to realize the transition.

3. Results and Discussion

Once all the elements were defined and analyzed in terms of the effect they are expected to have on the energy transition process, the relations among the observed elements were established. It was concluded that many strengths of the niche systems justify the transition, while the detected vulnerabilities are not any more critical than those of the incumbent systems, both in the case of the replacement of traditional fuels in transport with natural gas in trucks and ships and in the case of the replacement of coal and oil in electricity generation with natural gas.

With a slightly different graphical representation of the elements previously identified in model canvases, some relations are more obvious and can be easily detected, which helps in the analysis and discussion of the results.

Figure 5 shows traditional fuel use in transport (incumbent system), as well as its strengths and vulnerabilities.

The consumers in the incumbent system, sensitive to the security of supply, contribute with their demand (supported by their habits but endangered by emerging strict emission legislation and the perception of their environmental impact) for affordable and reliable fuel. Fuel producers and retailers provide a well-established supply chain (supported by a well-developed filling stations network and accumulated profit available for further investments and endangered by its slow reactions to changes), while the government helps by setting the price ceiling, making the fuel affordable to end consumers.

Figure 6 shows natural gas use in transport (the niche system), as well as its strengths and vulnerabilities.

The main drivers of the niche system are large consumers, i.e., big companies owning trucks and ships. The relationship between them and natural gas producers and retailers is supported by a well-developed market enabling diversification and emerging strict emission legislation, and it is endangered by the public perception of natural gas as “dirty” and the significant influence of traditional fuel-producing companies. Natural gas producers and retailers will likely be inclined to support the switch to natural gas because it is very easy for them to incorporate more gas considering the current infrastructure. The only vulnerability that would normally be worrying is the dependency on only one energy source; however, the fact that the supply today is usually diversified diminishes the seriousness of this threat.

Figure 7 shows traditional sources use in electricity generation (incumbent system), as well as its strengths and vulnerabilities.

In this incumbent system, the consumers constantly need at least a bit more electricity, meaning that the demand for electric power will remain high. Coal and natural gas suppliers currently offer a reliable supply for a high profit (but also at a high environmental price) to power plants, while power plants offer stable (and also reliable) electricity production and delivery to end consumers.

Figure 8 shows natural gas use in electricity generation (the niche system), as well as its strengths and vulnerabilities.

The similarities in strengths (and also vulnerabilities) of both incumbent systems (Figure 5 and Figure 7) arise from features that these systems have in common. Regarding the niche systems (Figure 6 and Figure 8), as natural gas is the main “actor” in both of them, similar strengths and vulnerabilities are applicable.

Considering the increasing worry about the environmental impact of the produced energy, the demand for cleaner electricity is on the rise, and natural gas could make a big difference. This is supported by the well-developed and growing natural gas market and the funding possibilities that are expected to appear in the future, encouraged by some of the European measures reviewed in Section 2. Natural gas suppliers, as one of the parts of the supply chain, would surely benefit, as their main customers would be large power plants that consume high amounts of energy. This relationship is supported by lower average capital cost per unit of installed power compared to other power plant types and by less pollution. Power plants, on the other hand, would be offering proven and reliable technology that already exists in the energy mix and, in addition, yields higher power output with minimal infrastructure adjustment needed. The identified vulnerabilities can be attributed to the slowness of the change implementation, meaning that the transition to fully gas-fired power plants is not likely currently. Furthermore, even if it started in this moment, the end result would not be seen immediately. However, just a small change in the policy direction could accelerate this transition, especially when acknowledging that natural gas is the most realistic choice, considering the costs and efficiency in general. There are countries that tried pushing more renewable energy into their energy mix, but there are still no examples that have been successful enough to be ground-breaking, which further shows that natural gas must be taken into account more seriously.

These results can be supported by real examples of developed EU countries with the fastest growth in the renewable energy sector. In the 2000s, Denmark, Germany, and Spain were the first countries to enter the energy transition, and 20 years later, some conclusions can be drawn. Of course, the influence of the global financial crisis that struck in 2007 cannot be neglected—the consequences were felt much more strongly in Spain (and some other countries relying heavily on tourism) compared to Germany, meaning that the energy transition was led by Spain’s elite, while Energiewende was driven by civil society. There is a lack of a profound understanding of the political economy’s influence on new (renewable) energy infrastructure. The influence of the overall economic context conditions on the support policies adopted and on the regulatory framework should also be more carefully analyzed, the question of ownership should be answered, and related funding issues of energy-related investments must be solved. Finally, there are some implications of the resistance of certain interest groups who are skeptical of climate change on the growth of new energy infrastructures [58]. An example can be found in Hungary’s slow energy transition, where it can be argued that the regime’s actions were unfavorable for a stronger renewables’ breakthrough [59]. Regional energy transitions have three phases of increasing stability, but each of them bears certain risks, making the transition fragile to a certain extent in each phase. In the initiation phase, the main challenge is a potential lack of capacity and interest in early initiatives. In the expansion phase, the competitiveness increases, which might lead to some conflicts. Finally, in the consolidation phase, actors might lose interest as technology becomes overlooked. All this means that the response of the system elements is crucial [60].

Although in the EASAC’s report [61], it is pointed out that all unabated fossil fuels, including natural gas, should be phased out by 2050, maintaining secure energy supply and affordable energy services to all consumers is set as an imperative. This implies that the seamless switch to a completely non-fossil energy system is virtually impossible, meaning that natural gas, as the cleanest fossil fuel and as a fuel with an exceptionally well-developed supply and transport network, is currently the most feasible option for emission reduction, and it should be considered the main actor in the gradual transition to a zero-carbon-emissions society. Finally, the EU’s energy transition will not be uniform throughout the Member States due to different energy supply and demand mix and infrastructure; however, acknowledging all these factors, natural gas again stands out as the most logical solution to all energy transition challenges.

4. Conclusions

The objective of this paper was to propose a feasible change in the present energy mix by comparing natural gas with other fuels used in power production and the transport sector. Based on the method applied and the conducted analysis, the results showed that many strengths of both niche systems (the replacement of traditional fuels in transport and electricity generation with natural gas) justify the transition, while the detected vulnerabilities are not any more critical than those of the incumbent systems (traditional fuels in transport and the use of coal and hydropower for electricity generation).

The transition to so called “net-zero society” will not be possible without the help of conventional fuels and conventional technologies. Regardless of the public discourse, the undebatable fact is this: it is not possible to immediately adopt a new, green energy mix. There ought to be a transitional period that will differ from country to country depending mostly on their economic development. It is obvious that more economically developed regions like northwestern Europe will transition faster, followed by less developed economies in one or more decades. In any case, all countries will have to be cautious to ensure that the transition does not negatively affect national economies. However, there are differences between conventional fuels. We should, globally, strive to cut the share of coal and oil in the sector of electricity production. Current technological options are recognized mostly in terms of natural gas or nuclear energy. A broader switch to natural gas would decrease GHG emissions and, simultaneously, would not hurt the economy (because it is a known and technologically safe energy source).

The European Union should be careful about its relationship with natural gas. The European gas sector is well developed, and very little spending is needed to maintain the infrastructure at the present high level of efficiency. Also, reducing GHG emissions to help the climate is (or should be) a global goal. The Union by itself can reduce emissions (and even achieve “climate neutrality”); however, it still would not help to avoid the consequences of climate change. The climate knows no country borders [62].