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. With domestic production contributing only 3.5 bcm annually, the country relies heavily on imports to meet its energy needs. Key suppliers include Algeria, Azerbaijan, and liquefied natural gas (LNG) sources. Algeria supplies 25 bcm annually through the Trans-Mediterranean (TransMed) pipeline, covering 36% of Italy’s natural gas demand. Azerbaijan contributes 10 bcm annually via the Trans Adriatic Pipeline (TAP), accounting for 15% of imports. Additionally, Italy’s LNG terminals process 15 bcm per year, with capacity expected to increase to 25 bcm by 2025, supported by new terminals in Piombino and Ravenna.

Italy’s energy framework is further bolstered by its extensive pipeline network, which spans over 33,000 kilometers, and its strategic position as a transit hub for Southern and Central Europe. These factors underscore the critical role of natural gas in Italy’s energy landscape, supporting both domestic consumption and regional energy distribution.

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, Italy's reliance on natural gas presents significant challenges. Rising global gas prices and geopolitical instability in supplier regions leave the country vulnerable to supply disruptions and market volatility. To mitigate these risks, Italy is implementing a multi-faceted strategy focused on diversification, sustainability, and innovation.

Italy is diversifying its supply sources by expanding LNG infrastructure and forging new partnerships with countries in Africa and the Eastern Mediterranean. These efforts aim to reduce dependence on traditional suppliers and enhance energy security. Concurrently, the country is investing heavily in renewable alternatives, with a goal to produce 10 billion cubic meters (bcm) of Renewable Natural Gas (RNG) annually by 2030—equivalent to 15% of current natural gas consumption. This initiative supports both emissions reduction and the transition to a sustainable energy future.

Italy is also integrating hydrogen into its energy mix by developing hydrogen-ready pipelines and piloting projects that blend hydrogen with natural gas. These advancements reduce emissions while fostering energy innovation, positioning Italy as a leader in the adoption of clean energy technologies. Collectively, these measures highlight Italy’s commitment to addressing the challenges of natural gas dependency while advancing toward a more resilient and sustainable energy system.

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.