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EU on manoeuvres? Dividends and challenges for REPowerEU

This article is the second of a two-part series investigating Europe’s potential post-Russia energy policy. Find part one here.

The first dividends of REPowerEU appear promising. It is difficult to disagree with the overall principle of shifting from protracted dependency on a few, volatile energy suppliers to a structure of energy self-sufficiency. This requires a delicate balance of suppliers, energy type, and modes of transport, but one which also ensures no new dependencies are permitted which could have negative implications for foreign policy. If the former undermines the latter, then the entire self-sufficiency philosophy driving REPowerEU falls apart.

Nailing down initial benefits and successes is therefore key. The first and best example thus far has been the approach to collective energy security amongst European Union (EU) Member States via the new EU Energy Platform. The platform facilitates the aggregation of gas demand required across the EU and enables the coordinated purchasing of natural gas at a European level. Something of a latter-day replica to the European Coal and Steel Community, the EU Energy Platform is designed to increase the EU’s bargaining power in the global energy market as a single entity, thereby consolidating the EU as an international energy ‘actor’, coordinating its negotiations with international exporters, and reducing the sum total of regional dependence on any single supply source. The prospective energy security benefits of the EU Energy Platform are clear – coordinated energy purchases externally, and the gradual establishment of a ‘secure energy zone’ domestically for Europe. Equally, the platform currently operates only as a matchmaking mechanism rather than a direct purchasing platform, so requires further development to be fully collective. 

Whether the benefits of the EU Energy Platform can translate into material and sustainable diplomatic wins for the EU is the crucial question, one which goes to the heart of the rationale to tie in energy security with foreign and security policy. Arguably, for both effective diversification of medium-term natural gas suppliers, and the securing of dependable alternative energy sources, strong diplomatic efforts are essential. Indeed, the entire endeavour of integrating the EU’s highly complex and largely unintegrated energy market and its security needs within one of the least integrated EU frameworks – foreign policy – is a significant challenge, institutionally and practically. This process has demanding requirements across the entire EU, both internally and externally. Externally, skilful diplomacy will be required to establish and maintain robust partnerships and ensure safe and developing transport routes for energy supplies. Such an approach in turn underscores the need for a cohesive strategy internally, where both the EU’s foreign and energy security policy are not merely aligned, but visibly symbiotic, with one reinforcing the other on the basis of self-sufficiency. 

Keeping REPowerEU on course

A recent Centre for European Reform report analyses how the energy price spike of 2021-22, triggered by Russia’s renewed aggression against Ukraine, catalysed changes in the EU’s approach to energy policy, aligning it more closely with its climate objectives. While this shift has led to a considerable increase in renewables within the EU’s energy mix, it has also produced tension between the EU’s ‘medium to long-term climate goals’ and its immediate need to find alternatives to Russian pipeline gas.

While consensus remains across the EU that transitioning to renewable energy could in time lead to energy self-sufficiency, the feasibility of accomplishing this in the medium-term is challenging due to the significant time and financial commitments involved. As a result, diversifying EU energy sources presents itself as a more practical medium-term strategy. This in turn may require the EU to reframe its climate goals as a medium-term solution to both its green ambitions and its energy security. To mitigate these interdependent challenges, the EU may opt to compartmentalise these aims, viewing them as separate but interconnected facets of the EU’s broader energy strategy. Within this framework, the diversification of energy suppliers is likely to remain a priority in the EU’s diplomatic efforts.

The REPowerEU initiative, with its focus on decreasing dependency on Russian gas, has the potential to significantly mitigate the effects of energy dependence in both the short- and long-term. Nonetheless, the broader issue of dependency persists as an ongoing challenge, even with a full transition to renewable energy sources. As one of the largest global economies, the EU will continue to rely on the critical raw materials essential for its economic framework, potentially creating new diplomatic and foreign policy constraints.

This evolving situation was recognised by the EU’s leading diplomats, Josep Borrell, the High Representative of the EU for Foreign Affairs and Security Policy, and Wopke Hoekstra, European Commissioner for Climate Action, in a recent op-ed reflecting on COP28. Borrell and Hoekstra highlighted that: 

The green transition will shake up the global balance of power. For the EU, this process implies both benefits and risks. On one hand, it will reduce our dependence on fossil fuels – a dependence that, as Russia’s war against Ukraine has demonstrated, carries high political and economic costs. On the other hand, it could create new dependencies, such as on producers of critical raw materials. Avoiding that outcome – and bolstering our security – requires us to ensure diversity of supply. To that end, we must strengthen our ties with Africa, Latin America, and South Asia, developing tailor-made partnerships that allow for value-addition and job creation in our partner countries.

In light of these challenges, it is imperative for the EU to develop a more robust multilateral diplomatic strategy. This strategy should focus on mapping out the risks and opportunities associated with climate change to mitigate its impact effectively. Such a diplomatic approach would not only address the immediate challenges but also position the EU as a leader in global efforts to combat the broader effects of climate change.

REPowerEU architects need to think carefully about the high stakes of pursuing the policy to its logical conclusion, amending some of its goals, and the risks of abandoning it in the face of increasing challenges. Coordinating and strengthening EU Member States’ energy requirements is a good start, but the entire process needs to be institutionalised at the EU level and systematised within the global energy market. Would additional – possibly supranational – powers agreed amongst the Member States and endowed to an appropriate EU institution (as with trade) assist in this goal? Granting the Commission such powers begins with the goal of self-sufficiency, but could spur on the necessary diversification of EU energy markets. An additional dividend would be to further refine EU energy diplomacy as a clearer component of its overall foreign and security policy. And this is not merely about gas purchasing, but the strategic interaction with markets and suppliers to tackle the terrain of energy geography: including pipelines, liquid natural gas (LNG) terminals, shipping routes, as well as further diversifying the supply chain of renewable energy sources, and their accompanying technologies.

When it comes to fossil fuels, states involved in large-scale pipeline construction are an obvious start, particularly for the EU’s ring of neighbouring states to the east and south. Azerbaijan has supplied increasing amounts of natural gas to the EU (particularly southern and southeastern Europe) via the Trans-Anatolian Natural Gas Pipeline (TANAP) and the Trans-Adriatic Pipeline (TAP). The Southern Gas Corridor, transportation of natural gas from the Caspian Sea region via Azerbaijan, Georgia, Türkiye, Greece, Albania and Italy, became fully operational in late 2020. The EU’s strategic diplomatic re-engagement with these regions would likely involve reconfiguring its relationship with Türkiye, considering its pivotal geographical position as a potential energy transit route. Linking gas from Iran and Iraqi Kurdistan to the TANAP, which traverses Türkiye, may be an option which presents itself in the medium-term. Successfully undertaking such endeavours requires a robust diplomatic framework, capable of navigating the intricate interplay of energy security, foreign policy, and regional geopolitics. 

Africa is also emerging as a vital alternative in the EU’s diversification strategy. As of January 2023, the continent represented 20% of Europe’s gas imports, with the Medgaz pipeline, a 210 kilometre subsea connection between Beni Saf in Algeria and Almería in Spain, playing a leading role. The Medgaz route bolsters supply security to Southern Europe by avoiding third or transit countries. Numerous African countries are also gaining prominence as major gas producers, thereby enhancing their role in Europe’s energy landscape, with Senegal, Nigeria, and Angola representing potential sources. Senegal itself, along with Mozambique and Tanzania, have recently uncovered large natural gas reserves, which is likely to spark increased investments in their gas infrastructure. The Greater Tortue Ahmeyim LNG Project near the coasts of Senegal and Mauritania exemplifies Africa’s potential as an energy provider for the EU. This gas field is believed to contain about 15 trillion cubic feet of gas, a volume five times greater than Germany’s total gas consumption in 2019. 

Following the 2022 Russian invasion of Ukraine, Egypt and Israel have also stepped up as significant energy partners for the EU. In June 2022 for example, the EU reached an agreement to transport natural gas from Egypt, as well as from Israel, and other Eastern Mediterranean sources to Europe via Egypt’s LNG export facilities. As a result of this agreement, Egypt has now directed 80% of its gas exports towards the EU. The recent ratcheting up of tensions in the Middle East has adversely affected gas production and export volumes in the region; equally, the overall potential of the area’s natural gas resources, as well as the need for more visible support from the EU as a whole, may induce the bloc into considering an active role in regional post-conflict reconstruction. 

Knocking REPowerEU off course

Externally, REPowerEU’s primary challenges encompass many of its opportunities, from both an energy security and energy diplomacy perspective. However, two other challenges need to be considered. The first is whether there is a need to re-establish relations with Russia, both during and after the conclusion of hostilities with Ukraine. Here, divisions across EU Member states in terms of attitudes towards Russia, the role and scope of sanctions, and the challenges of reducing their use of Russian oil and gas have begun to affect the domestic composition underwriting REPowerEU. Divisions which produce actual opposition to a given EU approach, or policy, are paradoxically a key part of EU integration and a method of identifying the limits to a given approach. Some of these visions will be predicated on how to deal with reintegrating Russia into some sort of relationship with the EU, both politically and from an energy perspective. The question therefore is whether the ending of hostilities in Ukraine would continue to align with the EU’s permanent drawdown of Russian fossil fuel imports, and whether this in turn might see Russia continue to sell its oil and gas to other markets? Or would a peace settlement somehow see a limited amount of Russian natural gas flowing back to the EU? 

Whilst most EU member states back the EU’s ambitious climate change goals, their material implementation, and consequential commercial and political knock-on effects, may be the difference between REPowerEU being a short-term approach to Russia’s aggression against Ukraine, or a permanent feature in a new drive for EU self-sufficiency. Then there are considerations around the position of Ukraine as a strategic energy actor within the EU and the European energy ecosystem. Integrating Ukraine into the EU’s energy framework, considering its status as a key transit state with extensive pipelines, would significantly reshape the European energy landscape. This integration would not only diversify energy routes but also solidify Ukraine’s strategic role in European energy security. However, this move is intertwined with the complex issue of Ukraine’s potential EU accession, a process fraught with geopolitical nuances. Navigating this delicate balance will be crucial for the EU as it seeks to strengthen its energy independence while managing intricate diplomatic relations. 

REPowerEU faces multifaceted external challenges. The parameters of relations with Russia post-conflict, addressing divisions among EU Member States, and considering Ukraine’s role in the European energy ecosystem are pivotal. REPowerEu’s future lies in balancing these complex dynamics, ultimately determining whether the initiative remains a temporary response to current crises, or evolves into a lasting pillar of the EU’s post-Russia energy strategy.

Mustafa Demir is an Associate Research Fellow at the University of Surrey. Prof. Amelia Hadfield is the Head of the Department of Politics at Surrey University and Founding Director of the Centre for Britain and Europe.

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