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EU on manoeuvres? Managing the geopolitical energy environment

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

In the wake of Russia’s invasion of Ukraine in 2022, the European Union (EU) found itself at a critical juncture in redefining both its energy and foreign policy. The drastic reduction in Russian gas imports from 41% in August 2021 to a mere 8% by September 2022 underscores this pivotal shift in material terms. However, the EU has also carved out REPowerEU, an ambitious, all-in approach which aligns its energy security policy firmly within the remit of its foreign and security policy. Some time has passed since these developments, so it is worth asking whether the EU is still in the foothills of navigating the complexities of today’s European energy landscape, or whether it is attempting an innovative form of ‘multi-level’ foreign policy. 

REPowerEU: A tripartite strategy to secure EU energy supplies

The first major policy response by the EU to Russia’s renewed aggression against Ukraine was its REPowerEU plan, set up in May 2022. With its three goals of saving energy, producing clean energy, and diversifying energy supplies, RePowerEU represents an integrated approach which aligns technological solutions with geopolitical considerations. Critics argue that there is little new with the first two goals of energy efficiency and carbon-free energy production, as they essentially align with the overarching goals of the European Green Deal. What is new, however, is the EU’s determination to diversify energy supplies, radically redrawing its own energy security composition in terms of both non-fossil fuel use overall and a gradual shut-off of Russian gas, the latter upending its relations with Russia at a stroke. Josep Borrell, the High Representative of the EU for Foreign Affairs and Security Policy, could not have been clearer in his insistence that REPowerEU would have significant energy security and foreign policy impacts in a blog in early March 2022: 

We will not abandon the defence of human rights and freedom because we are dependent on Russian gas…This tremendous conflict can only end positively with a return by Russia to basic international norms and principles…We have mobilised our energy capacities and we have to continue doing so, pooling the capacities of the member states and the EU institutions. We have to increase renewables and build green hydrogen production capacities.

This stance was echoed on the Commission’s website in May 2023:

When Russia invaded Ukraine, it became even more clear that the EU needed alternative ways to ensure its energy supply. While it is true that some Member States historically imported more Russian gas than others, the consequences of possible disruptions would be jointly suffered by all. This is why it is imperative that all Member States are in this together, ready to share gas with their neighbours in case of need.

Borrell’s pugnacious language notwithstanding, other international bodies, including the International Monetary Fund, concur, arguing that the EU’s post-February 2022 energy security policy represents ‘a coordinated effort by governments to reduce energy demand, augment supply, maintain open internal energy markets, and protect vulnerable consumers.’  

Nearly two years after Russia’s renewed aggression, two questions present themselves: why did the EU feel the need to bundle three goals together within the policy umbrella of REPowerEU? And how has the policy fared in both energy security and foreign policy terms in its first 18 months? 

A trinity of REPowerEU goals

In tackling the first question, from the EU’s perspective, the trinity of REPowerEU goals align around the overall goal of decarbonising the EU’s energy ecosystem. Ambitious energy efficiency and savings commitments fosters demand-side reductions, while the production of clean, increasingly carbon-free energy supports supply-side reductions. 

Weaning the entire European energy ecosystem off fossil fuels is effectively the end-goal for Europe; decoupling energy producers, industry, business and consumers from oil and gas use in a way which finally aligns with the earliest principles of the EU’s climate change commitments, while simultaneously reducing both its material vulnerability on, and political sensitivity to, Russia. In this way, reduced vulnerability equates to enhanced self-sufficiency. This aligns not only with foreign and security goals premised on increasing the strategic autonomy of the EU in key areas, including energy security, but also those striving for less overall dependence on certain strategic partners, such as Russia. 

Natural gas, despite its environmental impacts, operates within REPowerEU (and related policies) as a key transition fuel

To be clear, REPowerEU accelerates the EU’s role in global environmental stewardship by achieving climate neutrality at home in tandem with COP commitments, as well as a long overdue strategic response to its historic dependence on external – and principally Russian – oil and gas imports. Achieving these two goals alone represent a considerable policy win for the EU. A third win may also be achievable, namely a more coordinated structure of collective energy security amongst EU Member States, increasingly (and possibly permanently) managed by the European Commission itself. This goal, however, rests entirely upon the sustainability of the first two in terms of both energy and foreign policy. 

New partners, new challenges? 

The initial sanctions against Russia driving down imports have led to a significant net-drop in oil and gas purchase, transit and use from Russian sources. However, diversifying the entire EU network, whilst aiming for an eventual wholesale fossil fuel turn-off, presents a mammoth challenge; various reports suggest that such a shift could not feasibly happen before 2050. Diversification may therefore require the EU to go down multiple paths. First, in terms of preferred suppliers, diversification will entail favouring suppliers from Norway, Qatar, and North and sub-Saharan Africa over Russia. Second, in terms of sequencing, oil supplies will need to be reduced first and natural gas continue to be relied upon, and there should also be reductions in pipeline gas in favour of liquid natural gas (LNG) to minimise disruption to Europe’s energy infrastructure. 

Therefore, natural gas, despite its environmental impacts, operates within REPowerEU (and related policies) as a key transition fuel, underwriting the EU’s energy supplier, energy type, and energy transport method preferences. The consequence, however, is that the EU – at least in the medium-term – is ever more firmly embedded in the highly competitive global gas market, with its own inbuilt vulnerabilities regarding LNG terminals, shipping, and supply chain issues. In this area, key countries, including the United States (US), Qatar, and Russia, together account for around 70% of EU LNG supplies.

In the past two years, the market has responded favourably to the EU’s goal of diversifying away from Russian gas, with countries like Norway having ramped up exports, and Qatar, Algeria, and Egypt emerging as significant LNG suppliers to the EU. The US, driven by its extensive domestic shale gas production, is also now firmly on the EU’s radar. The challenge for the EU beyond merely securing alternative energy sources is establishing a strong and competitive presence in a market largely controlled by long-dominant suppliers, and not just as a buyer, but as an investor, and indeed as a transit location to other natural gas customers.

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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