Germany said it would raise the alert level under its emergency gas plan to secure supply following the recent reduction of pipeline supplies from Russia.
"Gas is now a scarce commodity in Germany," Economy Minister Robert Habeck told reporters.
Triggering phase two brings Germany a step closer to the third and final stage that could see gas rationing in Europe's top economy.
The Phase 2 "alarm stage", planned for when the government sees a high risk of long-term supply shortages of gas, theoretically enables utilities to pass on high prices to industry and households and thereby help to lower demand.
Germany, has since the end of March been at Phase 1 of its emergency plan, which includes stricter monitoring of daily flows and a focus on filling gas storage facilities.
A move to Phase 2 has been the subject of speculation since Russian supplier Gazprom cut flows via the Nord Stream1 pipeline to just 40% of capacity last week, blaming equipment that cannot be sent because of sanctions.
In the second stage, the market is still able to absorb missing volume without the need for state intervention that would kick in in the final emergency stage.
Mr Habeck called on Germans to reduce their gas consumption in a national effort to conserve energy for the winter.
"We are in an economic confrontation with Russia," he said.
A dozen European Union countries have been affected by cuts to gas supply from Russia, EU climate policy chief Frans Timmermans has said.
Mr Timmermans said ten of the EU's 27 member countries have issued an "early warning" on gas supply - the first and least severe of three levels of crisis identified in EU security of energy supply regulations.
EU countries are required to have plans in place for how they would manage a supply disruption at the three levels.
"The risk of full gas disruption is now more real than ever before," he said.
Mr Timmermans repeated Brussels' assertion that Russia has weaponised energy supplies. Russia has denied the cuts are premeditated.
The EU relied on Russia for 40% of its gas before Russia invaded Ukraine.
With Russian supply dwindling and gas prices soaring, some countries have increased use of coal power plants, while insisting this is temporary and will not thwart climate change targets.
Russia's cuts have raised concerns that Europe will struggle to fill gas storage - now at 55% - enough to cope with any further supply shocks during the peak winter heating season.
The EU last month agreed an emergency law requiring countries to fill gas storage 80% by 1 November.