High natural gas prices in Europe could see curbs on industry and/or switching to coal
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Combustion Industry News Editor
Natural gas prices in Europe and the UK are currently at record highs (being five times their 2019 levels), and prices and supply are expected to worsen over the coming Boreal winter, possibly forcing activity curbs on energy-intensive businesses due to supply issues (if high prices do not curb them first). A long 2020/21 winter drained storage levels in Europe and Asia, and the prioritisation of gas over coal is also playing a role. In addition, in Europe, supply from Russia has been muted in recent months, with a suspicion raised in an opinion piece in the Financial Times that Gazprom has lowered supply (filling storage in the country instead) to demonstrate the need for the Nord Stream 2 pipeline. With that pipeline expected to come online in December or January, prices in Europe could ease; in the meantime, however, high gas prices are likely to see more coal fired, as carbon permit prices have not risen as fast as gas prices, tipping the financial balance in favour of coal for the time being.