The Strategic Role Of Natural Gas In Italy's Energy Security

Essay By Bill Dirks | Executive Director | AleAnna  

Natural gas is central to Italy’s energy strategy, ensuring reliability, flexibility, and geopolitical stability in an evolving global energy  landscape. Compared to renewables, natural gas provides consistent energy output unaffected by weather variability, making it a  dependable backbone for grid stability. Unlike nuclear energy, which involves lengthy development timelines and political contention,  natural gas infrastructure offers faster deployment and adaptability to fluctuating energy demands. As a country heavily reliant on  energy imports, with 73% of its natural gas demand met through imports in 2022, Italy’s focus on natural gas is pivotal to balancing  economic growth, energy security, and environmental commitments. 

Italy’s Natural Gas Dependency and Infrastructure  

Italy consumed 68 billion cubic meters (bcm) of natural gas in 2022, making it the second-largest consumer in Europe. Its domestic  production accounts for only 3.5 bcm annually, necessitating extensive imports. Key suppliers include Algeria, Azerbaijan, and liquefied  natural gas (LNG) sources: 

• Algeria: Supplies 25 bcm annually via the Trans-Mediterranean (TransMed) pipeline, meeting 36% of Italy’s natural gas demand. • Azerbaijan: Provides 10 bcm annually through the Trans Adriatic Pipeline (TAP), accounting for 15% of imports.

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• LNG Imports: Italy’s LNG terminals handle 15 bcm annually, with plans to expand capacity to 25 bcm by 2025 through new  terminals in Piombino and Ravenna. 

Italy’s extensive pipeline network, spanning over 33,000 kilometers, and its strategic location as a transit hub for Southern and Central  Europe further underscore the importance of natural gas to the country’s energy framework. 

Enhancing Energy Security  

Natural gas plays a critical role in diversifying Italy’s energy supply and mitigating risks associated with geopolitical tensions. Following  the Russia-Ukraine conflict, Italy reduced its dependence on Russian gas from 40% in 2021 to 15% in 2023. This reduction significantly  improved Italy's energy security by diversifying its supply sources and minimizing its exposure to geopolitical risks. The success of this  transition highlights the importance of establishing partnerships with multiple suppliers, such as Algeria and Azerbaijan, and  expanding LNG infrastructure to ensure a resilient energy system. These lessons can be applied to other dependencies by prioritizing  diversification and investing in flexible infrastructure to mitigate vulnerabilities. This shift has been achieved through strengthened  partnerships with Algeria and Azerbaijan, as well as increased LNG imports from the United States and Qatar. 

Strategic investments in gas storage facilities have further bolstered Italy’s energy security. With a storage capacity of 20 billion cubic  meters, these facilities provide a critical buffer against supply disruptions, allowing Italy to maintain steady energy availability during  geopolitical crises or seasonal demand spikes. For example, during the winter months, when demand typically surges by 30%, the  storage infrastructure ensures reliable gas distribution without over-reliance on immediate imports. With a storage capacity of 20  bcm, Italy can cover up to 30% of its annual natural gas demand during emergencies or peak consumption periods. The government’s  recent €2 billion investment in expanding storage facilities reflects its commitment to enhancing resilience against supply disruptions. 

Economic and Environmental Considerations  

Natural gas supports Italy’s industrial sector, which contributes 23% to the country’s GDP. Industries such as ceramics, chemicals, and  steel heavily depend on natural gas for energy-intensive processes. For instance, the ceramics industry in Emilia-Romagna consumes  approximately 3 bcm of natural gas annually, highlighting its economic significance. 

From an environmental perspective, natural gas is considered a transitional fuel, emitting 50% less carbon dioxide than coal. The shift  from coal to natural gas in power generation has contributed to a 30% reduction in emissions from Italy’s energy sector over the past  decade. Additionally, Italy is investing in renewable natural gas (RNG) and hydrogen technologies to further decarbonize its natural  gas supply chain. 

Challenges and Opportunities  

Despite its strategic importance, natural gas dependency poses challenges. Rising global gas prices and geopolitical instability in  supplier regions increase vulnerability. To address these risks, Italy is: 

• Diversifying Supply Sources: Expanding LNG infrastructure and exploring new partnerships with countries in Africa and the  Eastern Mediterranean. 

• Investing in Renewable Alternatives: Aiming to produce 10 bcm of RNG annually by 2030, equivalent to 15% of current natural  gas consumption.

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• Integrating Hydrogen: Developing hydrogen-ready pipelines and pilot projects for blending hydrogen with natural gas, reducing  emissions and fostering energy innovation. 

The Future of Natural Gas in Italy’s Energy Mix  

As Italy transitions to a low-carbon economy, natural gas will continue to play a strategic role in ensuring energy security. The Italian  government’s €25 billion allocation from the EU Recovery and Resilience Facility emphasizes investments in energy efficiency,  renewable energy, and modernized gas infrastructure. 

Moreover, natural gas’s compatibility with emerging technologies, such as carbon capture and storage (CCS), will enable Italy to  balance energy security with its climate goals. Pilot CCS projects in Lombardy aim to capture and store 1 million tons of CO₂ annually  by 2030, demonstrating the potential for sustainable natural gas use. 

Conclusion  

Natural gas is indispensable to Italy’s energy security, supporting economic growth, industrial productivity, and environmental  sustainability. Through diversification, innovation, and strategic investments, Italy is navigating the challenges of global energy  markets while positioning natural gas as a cornerstone of its energy strategy. These strategies enhance energy security by reducing  reliance on single suppliers, mitigating risks from geopolitical conflicts, and ensuring a steady supply of energy during global market  disruptions. For example, investments in LNG terminals and partnerships with diverse suppliers such as Algeria and Azerbaijan provide  critical buffers against potential supply shocks. As the country embraces a cleaner energy future, natural gas will remain a vital bridge,  ensuring stability and resilience in the transition to renewable energy.