Europe enters a new energy stress test: more expensive energy commodities are once again putting pressure on industry, logistics and households
In the spring of 2026, Europe is once again entering a period of heightened uncertainty on the energy market, at a time when euro area economies have still not fully repaired the consequences of previous shocks. The new rise in tensions on the gas and electricity market is not coming under the same circumstances as in 2022, but that is precisely what makes the problem more complex: European countries today have more experience, more developed crisis mechanisms and more elaborate safety protocols, but at the same time they have less fiscal room for broad and long-lasting interventions. This means that the new surge in energy commodity prices threatens not only heating and electricity bills, but also investments, exports, industrial competitiveness and the overall pace of growth.
At the core of the problem is the fact that Europe remains highly sensitive to movements on the global gas market, primarily liquefied natural gas, while high electricity prices continue to burden the production sector. In its report for the first quarter of 2026, the International Energy Agency warns that the gas market was tight throughout 2025, and that 2026 brings somewhat higher growth in global LNG supply, but also stronger demand, especially in Asia. In other words, Europe is entering a new storage-refilling season without any guarantee that procurement conditions will be calm and predictable, which increases market nervousness and sensitivity to any geopolitical or logistical disruption.
Gas storage facilities are no longer an alarm, but they are not a reason to relax either
In recent years, the European Union has built a stronger system of security of supply than it had before the major energy crisis. The European Commission states that gas storage facilities were around 83 percent full at the beginning of winter 2025, that is, with approximately 85 billion cubic metres of gas, which corresponds to around a quarter of the Union’s annual consumption. At the same time, the Commission reminds that during the winter months storage facilities provide between 25 and 30 percent of the gas consumed in the EU during the heating season. This figure shows why the state of reserves remains one of the key indicators of the resilience of the European energy system.
But the situation at the beginning of March 2026 is no longer the same as it was at the beginning of winter. In an updated overview published in mid-March, the Council of the EU states that reserve levels during 2025 were lower than in previous years, partly because of a relatively harsh winter, although they mostly remained above the average from 2021. At the same time, it recalls that five countries – Germany, Italy, France, the Netherlands and Austria – account for the bulk of storage capacity, which means that the Union’s energy security still largely relies on several key hubs. That is precisely why Brussels insists on extending the rules on storage filling levels and on additional flexibility for member states, in order to reduce the risk of panic buying under unfavourable market conditions.
This is an important change compared with earlier phases of the crisis. Two or three years ago, the main debate focused on whether Europe would have enough gas at all. Today, the question is more nuanced, but no less important: can Europe replenish reserves at prices that will not further worsen inflation, endanger industrial production and exhaust public finances. It is precisely in that difference that the new energy stress test lies. A physical supply disruption is no longer the only threat; equally important is the cost shock spilling through the entire economy.
Industry is still paying the price of Europe’s energy vulnerability
The biggest problem for the European economy is not only the level of prices, but their persistent gap compared with competing markets. In the analysis “Electricity 2026”, the International Energy Agency states that electricity prices for energy-intensive industries in the European Union during 2025 remained more than twice as high as those in the United States of America and almost 50 percent higher than in China. This is a figure that directly explains why the energy issue in Europe is no longer only a social or security issue, but is increasingly becoming a matter of industrial strategy, investment attractiveness and long-term productivity.
For steel producers, the chemical industry, ceramics, cement, paper, fertilisers and a series of processing sectors, energy is not a marginal cost, but a fundamental element of the business model. When the difference in the price of electricity or gas becomes permanent, companies lose room for investment, margins shrink, and decisions on new plants are increasingly shifting towards markets with cheaper and more stable energy. This is precisely why the European Commission openly acknowledges in documents on the Clean Industrial Deal that industry is facing high energy costs and strong global competition and that urgent measures are necessary if the Union wants to retain production and jobs.
The problem is not limited only to large factories. Higher energy costs also spill over into logistics, cold supply chains, distribution centres, rail and road transport, and small and medium-sized entrepreneurs who do not buy energy under the same conditions as large industrial players. When the cost of operations, storage, transport and cooling systems rises simultaneously, input costs for a wide range of goods and services also rise. This then becomes a macroeconomic problem, because more expensive energy no longer remains confined within the energy sector but enters the price structure of almost everything households and companies buy.
Households are no longer at the peak of the crisis, but bills remain sensitive
Eurostat data show that part of the direct pressure on households did indeed ease during 2025, but not enough to speak of a return to the old normal. The average gas price for households in the European Union in the first half of 2025 fell to 11.43 euros per 100 kWh, from 12.44 euros in the second half of 2024, which is a decline of 8.1 percent. At the same time, the share of taxes and levies in the final price rose from 30 to 31.1 percent, which Eurostat links to the further withdrawal of subsidies and tax relief introduced in previous crisis periods. In other words, part of the price decline came alongside a simultaneous reduction in state protection.
The picture is similar for electricity as well. At the end of 2025, Eurostat announced that the average electricity price for households in the EU in the first half of the year amounted to 28.72 euros per 100 kWh, which is only a slight decline compared with the previous half-year. This means that households have moved away from the most dramatic peaks of the crisis, but are still paying for energy at levels significantly higher than those before 2022. In such circumstances, any new increase in wholesale prices or worsening of market expectations can very quickly spill over to end users, especially where states are no longer willing or are not fiscally capable of intervening broadly.
For politicians, this is a particularly sensitive issue because energy pressure is not felt equally in all countries and among all consumers. Eurostat’s data show large differences among member states, so the burden of the crisis is distributed unevenly. This increases political pressure on national governments to intervene, but at the same time reduces the space for a coordinated and simple European response. After years of emergency measures, many countries can no longer repeat the same support models without consequences for the budget, public debt and deficit.
Fiscal room is narrower than in the previous crisis
It is precisely the fiscal dimension that is one of the reasons why the new energy wave is being discussed with more caution than before. In projections published in December 2025, the European Central Bank expects euro area real GDP growth of 1.2 percent in 2026, after 1.4 percent in 2025, while the euro area budget deficit in 2026 is projected at 3.3 percent of GDP, with a further rise in the public debt ratio. The ECB explicitly states that energy support measures from earlier years were mostly reduced, which is one of the sources of fiscal tightening during 2025. This means that European governments are entering a new phase of energy uncertainty with fewer available, politically sustainable and budgetarily acceptable tools for broadly cushioning the shock.
Such a framework significantly changes the logic of the response. If energy commodity prices rise sharply again, states will have to choose between targeted measures for the most vulnerable groups and broader support for the economy, while neither is easy to finance anymore. Large support packages can calm social pressure in the short term, but in the long term they worsen the state of public finances. On the other hand, overly narrow measures may leave part of industry and the middle class exposed to costs they cannot easily absorb. That is precisely why a new energy shock, even if it is milder than the one from 2022, can have a more serious economic effect than it may seem at first glance.
In the same projections, the ECB estimates that inflation measured by the HICP should slow from 2.1 percent in 2025 to 1.9 percent in 2026. But that projection assumes relatively controlled energy developments. Any new and stronger deterioration on the gas and electricity market could slow the process of calming inflation, and thus make monetary and fiscal decisions more difficult. Translated, Europe does not have the luxury of viewing energy as a separate problem of one sector; it remains one of the main channels through which pressure is transmitted to prices, interest rates, investments and consumption.
Brussels is trying to respond structurally, but the market is seeking faster solutions
Aware that emergency measures cannot be a permanent policy, the European Commission is placing ever greater emphasis during 2025 and 2026 on a structural response. The Clean Industrial Deal, presented on 26 February 2025, is conceived as a combination of competitiveness and decarbonisation, with the explicit objective of lowering energy prices, strengthening domestic production and creating conditions for industrial investment. Alongside this framework, the Commission also presented the Action Plan for Affordable Energy, with which it aims to reduce bills for citizens and businesses in the short term and structurally, and to improve security of supply.
On paper, the direction is clear: more renewable sources, stronger grids, faster permits, greater system flexibility, stronger electrification and lower dependence on imported fossil fuels. But the problem of European energy policy remains the gap between medium-term reforms and short-term market pressure. Factories, carriers and households are paying bills now, while the benefits of new grids, batteries, interconnections, hydrogen or additional renewable capacities arrive gradually. That is why every new instability on the gas market still has a disproportionately strong effect on the European economy.
Particular sensitivity is also created by the fact that Europe simultaneously wants to accelerate decarbonisation and reduce geopolitical dependence. The International Energy Agency states that the European Union has made a historic decision to phase out imports of Russian gas by no later than November 2027. Strategically, this is an understandable and politically expected direction. Economically, it is an additional demand on a system that has not yet fully cushioned the previous shock. Any acceleration of the energy transition without a sufficiently rapid fall in prices easily becomes a political and industrial problem.
Why this is a stress test for both growth and social stability
When people speak of an energy stress test, they often think only of the question of whether the lights will stay on and whether there will be enough gas. In the European case, the test is broader. First, it is a test of competitiveness: can European industry withstand a situation in which energy costs are structurally higher than those of its main competitors. Second, it is a test of fiscal resilience: can states help without a new wave of borrowing and long-term pressure on public finances. Third, it is a test of social cohesion: how long can households accept high bills and the indirect rise in living costs without stronger political consequences.
That is precisely why the current situation does not look like a repetition of the same crisis, but rather like a new phase of it. Europe is more resilient today in the technical and institutional sense than it was four years ago. It has stronger storage rules, better coordination mechanisms and a clearer understanding of geopolitical risks. But at the same time it is more vulnerable in the political-economic sense: growth is still weak, industrial nervousness greater, and budgetary room narrower. That is why a new increase in energy commodity prices does not need to cause a spectacular collapse to leave a deep mark on investments, production and consumer sentiment.
The question of whether Europe can withstand a new energy round without a more serious blow to growth therefore has no simple answer. According to the available data, it is more likely that the Union can avoid the darkest scenario of a physical shortage than that it can completely avoid the economic cost of new instability. In other words, the European system today is more resilient to a supply disruption than to prolonged high energy costs. And it is precisely on that that it will depend whether 2026 will be remembered as a year of stabilisation after major energy upheavals or as the beginning of a new phase in which Europe is no longer fighting only for secure supply, but also for its own industrial and social sustainability.
Sources:- IEA – report on developments on the global gas market in 2025 and the outlook for 2026, including tensions on the LNG market and Europe’s exposure to imported supply- European Commission – official data on gas storage levels in the EU at the beginning of winter 2025 and the role of storage facilities in security of supply- Council of the EU – updated overview of the state of gas storage facilities and the rules on mandatory filling, with data up to 8 March 2026- European Commission – clarification of the proposal to extend the Gas Storage Regulation and explanation of the importance of storage facilities for the EU’s winter needs- IEA – analysis of electricity prices and competitive pressure on energy-intensive industries in the European Union- European Commission – overview of the goals of the Clean Industrial Deal and measures to strengthen competitiveness with lower energy prices- European Commission – Action Plan for Affordable Energy with short-term and structural measures for citizens and businesses- Eurostat – data on gas prices for households in the first half of 2025 and changes in the share of taxes and levies- Eurostat – statistics on electricity prices for households and businesses in the EU, including differences among member states- European Central Bank – analysis of the role of electricity prices in European decarbonisation and the effect on industry and households- European Central Bank – macroeconomic projections for the euro area, including expectations for growth, inflation, the deficit and the effect of reducing energy support
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