What's New

Azerbaijani leader Ilham Aliyev wants the European Union to ease regulatory hurdles and improve financing conditions to enable an expansion of natural gas exports. But recently published data raises doubts about whether Azerbaijan can meet a commitment of exporting 20 billion cubic meters (bcm) of gas annually to the EU by 2027.

Azerbaijani gas exports are now trending in the wrong direction, according to data published by Bruegel, a Brussels-based think tank dedicated to improving “the quality of economic policy with open and fact-based research, analysis and debate.” Azerbaijani gas exports to the EU declined to 2.84 bcm during the first quarter of 2025, down from 3.2 bcm during the same period the previous year, according to Bruegel’s data. In 2023, the first quarter export total was 3.07 bcm.

Export volume has been stagnant for the past three years, the data shows. The overall Azerbaijani-to-EU volume for 2024 was 12.66 bcm, marginally higher than 2023’s annual total of 12.39 bcm and 2022’s 12.26 bcm.

According to Bruegel’s daily import tracker, last updated April 11, the EU is still receiving slightly more gas from Russia per day than from Azerbaijan.

The figures appear to deepen the chicken-or-egg type of dilemma in Azerbaijan’s energy relationship with the EU. Azerbaijan says the EU must facilitate robust investments to add pipeline capacity to meet the 20 bcm by 2027 goal. At the same time, the EU’s skepticism over whether Azerbaijan can fill any new pipelines with gas has policymakers in Brussels leery of authorizing large outlays for added infrastructure.

On April 9, Aliyev tried to turn up the heat on Brussels, threatening that if the EU did not arrange for an expansion of the Southern Gas Corridor, a transit route currently operating at near-capacity, Azerbaijan would start looking elsewhere, “to the East, to the South,” to export its gas. He added that new discoveries and a domestic renewable energy program would free up added gas volumes for export.

Speaking at an academic forum in Baku, Aliyev highlighted the dichotomy of Brussels’ immediate need for new fossil fuel suppliers to ease the EU’s dependence on Russian gas with the longer-term ambitions of having net-zero greenhouse gas emissions by 2050 via a transition to renewable energy sources. He complained that EU customers will not commit to supply contracts beyond 2049, and that the European Investment Bank (EIB) had “stopped completely financing fossil fuel projects,” going on to hint strongly that the European Commission had sufficient influence to get the EIB to support Southern Gas Corridor expansion.

“The European Commission should take off its glasses, look at the world from a realistic point of view, and appreciate countries like Azerbaijan,” Aliyev said, according to a transcript of his comments posted on the presidential website.

Some EU experts are already taking a hard look at the union’s gas import needs and are concluding that Baku’s gas is not such a vital element for Europe’s energy future.

“The EU’s natural gas demand has been declining since 2022 due to a combination of the drop in industrial consumption, efficiency gains and the faster deployment of renewables,” wrote Yana Zabanova in an analysis published by the Germany-based Heinrich-Böll-Stiftung. 

Zabanova noted the EU’s climate-friendly goals for 2050 would continue to exert pressure for lower gas imports in the coming years. In addition, an expansion of liquefied natural gas imports, mainly from Qatar, expected to begin in 2026, makes it “far from certain how much gas Europe will actually need from Azerbaijan by the end of the decade.”

“Azerbaijan is an important but by no means an indispensable energy supplier for Europe,” Zabanova concluded. “Finally, with its alarming human rights track record, Azerbaijan has been a controversial partner for the EU politically, and many voices – including in the European Parliament – have called for a critical reassessment of the relationship.”

By Eurasianet.org