Gas Displaces Coal and Oil and Paves the Way for Climate-Neutral Molecules

• Gas Displaces Coal and Heating Oil: The share of gas in primary energy consumption is growing.
• Indispensable for Power and Heat: Natural gas safeguards electricity supply during periods of low wind and solar output, shapes the heating market, and makes a significant contribution to reducing CO₂ emissions and costs.
• Kehler: “Gas is system-relevant—today for security of supply and competitiveness, and tomorrow as a carrier of climate-neutral molecules.”

In 2025, gas was once again Germany’s second most important energy source, with a growing share. Alongside solar and wind, gaseous energy carriers are driving the energy transition and will continue to gain importance in the future. At a press conference held by the industry association Die Gas- und Wasserstoffwirtschaft at the opening of the energy trade fair “E-world” in Essen, Executive Director Dr. Timm Kehler emphasized that gaseous energy carriers will continue to play a central role in our energy system.

Gas consumption in Germany increased again in 2025. After the sharp declines during the crisis years, consumption rose by around three percent year on year to 835 TWh (2024: 813 TWh), accounting for 26.9 percent of primary energy consumption (2024: 25.9 percent). Industry continued to account for the largest share, with gas consumption of 305 TWh—1.3 percent above the previous year.

The increase in consumption can be observed across all sectors. Growth was particularly pronounced in commerce, heat supply, and power generation. This development shows that, after the extremely high price levels of 2022 and 2023, companies and consumers are once again increasingly relying on natural gas.

Dr. Timm Kehler, Executive Director of Die Gas- und Wasserstoffwirtschaft, commented: “The figures show very clearly: gas is not a sunset technology, but system-relevant—today for security of supply and tomorrow as a carrier of climate-neutral molecules. Anyone who wants to decarbonize power generation, heat, and industry must think molecules and electrons together and ensure consistent investment certainty.”

Power System: Flexible Gas Power Plants Safeguard Supply

In 2025, around 509 TWh of electricity were generated in Germany, about 56 percent of which came from renewable energy sources. At the same time, the gas balance data show that during periods of low wind and solar generation, gas provides the largest share of firm capacity.

For example, in calendar week 3 of 2025, around 72 percent of electricity generation had to be covered by dispatchable power plants such as gas- and coal-fired units. Gas-fired power plants are available at short notice, highly flexible, and—with around 392 g CO₂ per kWh—cause significantly lower emissions than hard coal power plants (860 g CO₂/kWh) and lignite power plants (1,120 g CO₂/kWh). Accordingly, the CO₂ intensity of the German electricity mix, at 344 g CO₂ per kWh, remains higher than in countries without a coal share such as the United Kingdom (around 180 g CO₂/kWh).

With the ongoing coal phase-out, more than 30 GW of firm capacity will be lost in the coming years. This brings the federal government’s power plant strategy to the forefront of security of supply. It must be implemented swiftly and complemented by a reliable capacity mechanism that enables investment in new, flexible, hydrogen-ready gas power plants.

“Without new controllable generation capacities, electricity supply cannot be secured. The power plant strategy must now be implemented quickly and underpinned by a viable capacity mechanism. Otherwise, rising electricity prices and real supply risks threaten—with tangible consequences for the economy and consumers,” Kehler said.

Gas Storage: Proven Safety Anchors in Need of Reform

After the cold winter, Germany’s gas storage facilities are filled to around 27.9 percent—well below the long-term average. However, the 30 percent filling requirement for February 1 was met. Gas volumes for the current heating season are foreseeably secured. Nevertheless, Germany will emerge from the winter with comparatively low storage levels.

With a working gas volume of around 256 TWh, German gas storage facilities remain a central stability anchor of the energy system. At the same time, the traditional business model of seasonal storage is coming under increasing pressure, as higher LNG imports are reducing the winter–summer spread. Against this backdrop, statutory filling requirements need to be further developed to ensure security of supply without generating unnecessary costs for the state and consumers.

Heating Market: Significant Emission Reductions Through Gas

Natural gas remained the dominant energy source in the heating market in 2025. Around 56.2 percent of homes in Germany are heated with natural gas, and gas accounts for around 50 percent of district heat generation. Long-term trends show clear shifts: the market share of heating oil has fallen from 23.3 percent in 2000 to 17.3 percent. Heat pumps currently account for 4.3 percent of the existing building stock. The switch from heating oil to gas in recent years has made a major contribution to reducing CO₂ emissions in the buildings sector.

At the same time, market figures show that boiler replacements have recently declined sharply. In 2025, only around 627,000 heating systems were sold—a decrease of twelve percent year on year. Against this backdrop, Kehler warns of further delays in modernizing the building stock and calls for a more CO₂-oriented, technology-open regulatory framework: “Especially in the heating market, it is clear that climate protection only works with pragmatic and affordable solutions,” Timm Kehler emphasizes. “What is needed, therefore, is a pragmatic and technology-open evolution of the Building Energy Act toward a Building Modernization Act that places CO₂ reductions at its core, enables hybrid solutions, and systematically integrates renewable gases.”

Hydrogen Ramp-Up Needs a Reliable Framework

The hydrogen ramp-up is progressing more slowly than planned. While electrolyzer projects with a capacity of more than 11 GW by 2030 were still announced in 2024, currently concretely planned capacities amount to only around 7.2 GW. Numerous projects have been postponed or abandoned.

At the same time, important progress was made in infrastructure development in 2025: with around 525 kilometers of hydrogen pipelines realized—predominantly through the conversion of existing natural gas pipelines—the launch of the hydrogen core network has succeeded. The gas balance thus clearly shows that the technical foundation for the ramp-up is being created, but the market is waiting for reliable rules and competitive framework conditions.

Biomethane: Consistently Unlocking Its Potential

In 2025, around 11.5 TWh of biomethane were fed into the German gas grid, primarily for the heating market, but increasingly also for industry, power generation, and transport. Around 260 biomethane upgrading plants are in operation in Germany—despite a significantly larger sustainably accessible potential.

Despite the considerable potential of this renewable gas, biomethane has so far played only a minor role in the national implementation of the EU gas and hydrogen internal market package. Unclear regulations on grid access, mass balancing, and certification are jeopardizing investments.

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