Gas prices in Europe have nearly returned to pre-war levels, currently standing at around €27 per megawatt hour. For comparison, at the start of 2021 the price was €20, while at the peak of the 2022 energy crisis it rose to €345. Thus, prices have plummeted more than tenfold compared to the worst period. However, the drop in gas prices has not led to industrial recovery, as the consequences of the energy crisis are long-lasting.
During years of high prices, entire sectors of the European economy exited the market. Factories that shut down have not reopened, and those that moved production abroad are unlikely to return, even if energy becomes temporarily cheaper. Significant investments have been directed outside Europe, making reversal difficult.
In 2023, nearly 190,000 companies went bankrupt in Western Europe—the most in over ten years. High energy costs are cited as a major reason. In Germany, more than 20,000 bankruptcies are expected for the last year, while industrial output declined by 4.5%. The automotive and chemical industries have been particularly affected.
These changes have led to large-scale layoffs and factory closures, with production shifting overseas. Gas consumption in the EU remains 20% below pre-war levels, not due to conservation, but because part of the industry has disappeared.
Despite lower gas prices, European manufacturers still pay three times more for energy than U.S. competitors, and face additional expenses from carbon quotas and regulations. Europe relies on imported LNG, primarily from the U.S., keeping prices higher compared to domestic U.S. levels.
Increased competition from China, declining investment, and external pressures have further reduced the appeal of manufacturing in the EU. The main positive has been accelerated development of renewables, though they cannot completely replace gas as energy reserves are still needed.
Experts note that investment, political will, and structural reforms are required for recovery. For now, low gas prices do not solve the underlying problems facing European industry.
