Gas in Transition: An ARDL Analysis of Economic and Fuel Drivers in the European Union

This study investigates the short- and long-run drivers of natural gas consumption in the European Union using an ARDL bounds testing approach. The analysis incorporates GDP per capita, liquid fuel use, and solid fuel use as explanatory variables. Augmented Dickey–Fuller tests confirm mixed integration orders, allowing valid ARDL estimation. The results reveal a statistically significant long-run relationship (cointegration) between gas consumption and the energy–economic system. In the short run, the use of liquid fuel exerts a strong positive influence on gas demand, while the effects of GDP materialise only after a two-year lag. Solid fuels show a delayed substitutive impact, reflecting the ongoing transition from coal. An error correction model confirms rapid convergence to equilibrium, with 77% of deviations corrected within one period. Recursive residual and CUSUM tests indicate structural stability over time. These findings highlight the responsiveness of EU gas demand to both economic and policy signals, offering valuable insights for energy modelling and strategic planning under the European Green Deal.