As winter approaches, the European Union faces a stark social challenge: nearly 50 million citizens cannot adequately heat their homes, according to EU Energy Commissioner Dan Jørgensen. The warning came as energy ministers gathered in Luxembourg on October 29 to confront a crisis driven by geopolitical tensions and soaring wholesale gas prices, which have climbed to nearly €100 per megawatt-hour.
The EU does not anticipate physical shortages of oil or gas, but the real threat is an economic shock that makes basic utilities unaffordable for millions. Between 2021 and 2023, 62% of companies reported operational bottlenecks due to volatile energy costs, while 80% of EU enterprises faced supply-chain constraints or reorganisation, according to Commission data.
Why gas prices are climbing
Europe's energy markets have tightened significantly. Russia once supplied about 45% of EU gas imports, but after its invasion of Ukraine, that figure fell to around 12% by 2025. The expiry of the Russia-Ukraine gas transit agreement on 31 December 2024 ended a route that carried roughly 15 billion cubic metres of Russian gas in 2024. European countries have had to replace cheap pipeline gas with more expensive liquefied natural gas (LNG), exposing prices to global competition and geopolitical shocks.
The Middle East conflict has compounded the problem. The Strait of Hormuz carries almost 20% of global LNG supplies, and shipping disruptions have reduced exports from major producers such as Qatar and the United Arab Emirates. According to the International Energy Agency, LNG shipments from these countries fell by approximately 35 billion cubic metres between March and June 2026 compared with the same period a year earlier.
Storage levels reflect the strain. As of 26 October 2026, EU gas reserves stood at only 75% of capacity, down from 83% the previous year. Germany's storage was about 62% full, the Netherlands around 65%, while Italy boasted over 90%. Countries with lower reserves may need to buy additional gas during winter, when heating demand and prices typically peak.
Deadlock over consumer protection
The Luxembourg meeting ended without agreement on protecting consumers. Ministers split over a European Commission proposal to raise gas taxes to promote green energy, with 13 countries, including Germany and Italy, demanding its withdrawal to shield low-income citizens. A ban on Russian LNG remains on track for January 2027, while countries like Italy are pursuing independent price caps. The Council has delayed further action and is eyeing a compromise in December 2026.
One key proposal, introduced on 17 July 2026, aims to lower electricity bills by changing how consumers pay for electricity networks. These charges cover the cost of building, operating and maintaining power lines and other infrastructure, accounting for around a quarter of the average EU household electricity bill. The plan encourages operators to use smart meters, digital systems and improved management to make better use of existing infrastructure, rather than relying solely on costly new construction. It also promotes off-peak consumption, such as charging electric vehicles overnight, to ease grid pressure.
However, ministers raised concerns that the rules could give the EU too much control over decisions currently made by national governments, calling for greater flexibility to reflect national circumstances.
Structural challenges remain
Gas often drives electricity prices in Europe, because the EU dispatches power from cheapest to most expensive sources, starting with renewables and ending with gas. Since renewables cannot meet all demand, member states use gas-fired plants, and the last plant needed—usually gas—sets the market price. This means global gas-price increases raise electricity prices even when most power comes from cheaper sources.
Europe has made progress in decoupling gas and power prices, but as long as it "doesn't have enough energy storage (pumped hydro or batteries) […] it will need gas to meet peak demand," said Noah Gordon, senior policy fellow at the European Council on Foreign Relations. Better energy grids and stronger cross-border connections are essential to reduce reliance on gas, but these investments take time.
Ministers also discussed preparing for possible winter 2026–2027 gas-supply disruptions, stressing the importance of diversifying supplies, reducing reliance on fossil fuels and investing in home-grown clean energy. They emphasised closer EU coordination, information-sharing and solidarity, particularly with Ukraine and Moldova. Gas storage remains a key part of winter preparedness, with EU countries generally required to reach 90% capacity between 1 October and 1 December, though rules allow flexibility under difficult market conditions.
The Council also stressed the need to strengthen the long-term resilience of energy infrastructure, including against climate-related risks. Without decisive action, the gap between those who can afford to heat their homes and those who cannot will only widen.
