From Crisis to Power Play: The EU’s Energy Struggle in a Shifting World

Among its many objectives, a primary goal of the European Commission is to ensure energy security across Europe. This encompasses not just the secure and diversified supply and storage of gas, oil, and electricity, but also entails the common procurement of resources and effective management in times of crisis and political instability. Recent challenges, notably the COVID-19 pandemic and the Russian invasion of Ukraine, have exacerbated these issues. These events have led to a surge in energy prices and have made the supply chain on which the European Union relies on increasingly fragile. Such escalating energy insecurity has consequently diminished the bargaining power of President von der Leyen and the European Commission at large. This has resulted in a weakened European Union, struggling to advance its interests both within the Eurozone and beyond. This article contends that bolstering energy security is imperative for the European Union to establish itself as a formidable player on the global stage.

According to a study conducted by the European Parliament, Europe’s susceptibility to energy supply disruptions is particularly high due to its reliance on imports, stemming from limited indigenous resources. In 2017, more than half of the EU’s energy requirements were met through imports. Malta and Cyprus rank as the most dependent EU member states on imported energy, while Estonia and Denmark boast the greatest levels of self-sufficiency. The EU’s import statistics are significant, comprising 87% of its crude oil (the predominant element in its energy composition), 70% of its natural gas, 40% of its coal, and 40% of its nuclear fuels. A trend of escalating dependence has been observed over the past two decades, with import reliance surging from 44% in 1990 to an unprecedented peak currently.

Over the past decade, oil and coal consumption across Europe has diminished, a shift attributable to an increase in natural gas usage coupled with a rise in EU renewable energy production and substantial advancements in energy efficiency.

Projected over a longer term, these trends portend a reduction in energy dependence: enhanced energy efficiency signifies lower consumption, hence a reduction in imports, while renewable energy has the potential for predominantly local production. Nonetheless, the EU’s imported gas consumption remains substantial. Given the challenges in swiftly transitioning to alternative gas suppliers, it is prudent to mitigate the risk of supply disruptions by diversifying supplier nations and supply routes. Diversification is indeed the linchpin of the 2014 European energy security strategy. However, as of the first half of 2019, the EU’s progress towards this objective has been minimal; nearly 40% of its gas imports were sourced from a single supplier, marking an increase over recent years. Following the Russian incursion into Ukraine, Europe was compelled to reconfigure its gas supply chain. This reconfiguration precipitated an energy crisis that reverberated throughout the EU member states. Concurrently, it incited a more nuanced foreign policy crisis with potential for enduring repercussions.

The implications of an energy crisis on the credibility of European Union foreign policy are multifaceted. Unlike the more assertive foreign policies of nations such as the United States, China, and Russia, the EU’s approach has historically been perceived as neither aggressive nor particularly coherent. This perception can be attributed to the EU’s composition of multiple sovereign states, each prioritizing national interests, often at the expense of the Union’s collective objectives. The resultant internal conflicts and power struggles inevitably have spillover effects, manifesting in a foreign policy that is perceived as fragmented and inconsistent over time. However, the situation has recently deteriorated. The downturn commenced with the EU’s enactment of severe and unparalleled sanctions against Russia, following the onset of Russia’s offensive against Ukraine on 24 February 2022, and the subsequent unlawful annexation of the Donetsk, Luhansk, Zaporizhzhia, and Kherson regions of Ukraine.

The sanctions encompass targeted restrictive measures, comprehensive economic sanctions, and specific visa restrictions. Individual sanctions include travel bans and the freezing of assets, while entity sanctions involve asset freezes. Since February 2022, an estimated 350 billion euros of Russian assets have been immobilized within Europe. In addition, the economic sanctions have introduced various import and export restrictions on Russia, precluding European entities from selling certain commodities to Russia and barring Russian entities from supplying specific goods to the EU.

The compilation of prohibited products is curated to maximize the punitive impact on the Russian economy while mitigating adverse outcomes for EU businesses and citizens. As per the European Commission, the EU has proscribed over €43.9 billion worth of potential exports to Russia and €91.2 billion worth of potential imports from Russia since February 2022. This translates to 49% of exports and 58% of imports, relative to the volumes in 2021, now being under sanctions. The list of sanctioned products encompasses crude oil (effective from December 2022), refined petroleum products (from February 2023), coal, other solid fossil fuels, steel, and iron products.

Prior to the invasion in February 2022, Russia was the principal energy trade ally of the European Union. This relationship has diminished substantially post-invasion. Compelled to diversify their energy sources due to the sanctions, Europe found its response to the aggression in Ukraine to be robust and immediate. Nonetheless, this stance has inadvertently led to a diminution in leverage over partners who have progressively become more strategically significant.

As a result, in the second quarter of 2023, Russia plummeted to the 12th position among the EU’s energy suppliers, accounting for a mere 2.7% share—a decline of 13.2 percentage points compared with the previous year. Conversely, nations such as Kazakhstan, Saudi Arabia, and Libya are emerging as significant partners in the crude oil sector. For natural gas, Algeria and Azerbaijan are increasingly important, while the Gulf states are becoming pivotal for liquefied gas. This shift has pronounced ramifications for EU foreign policy. Historically, the EU’s leverage over a vast and influential nation like Russia has been limited, with minimal bargaining power or political influence. In contrast, the EU has wielded greater sway over countries like Libya or Azerbaijan. As these nations ascend to the role of strategic energy suppliers, their bargaining power surges dramatically and rapidly. Consequently, these countries might leverage their newfound influence to assert national interests more forcefully. The shifting balance of power augurs political tension and escalates the risk of conflict. This context elucidates the heightened assertiveness of Azerbaijan in the Nagorno-Karabakh region, an aggressiveness that the EU observed without comment or intervention, deferring the issue to the United States. Such political frailties are not novel, yet they are exacerbated by energy crises at an untenable pace.

In conclusion, Europe’s ambition to attain energy self-reliance is imperative, with the path forward lying in a green transition and energy independence. Absent this autonomy, Europe’s influence on the global geopolitical stage will remain marginal, perpetually vulnerable to the political leverage exerted by energy-exporting nations, which, understandably, employ their natural resources as strategic assets to advance their national interests.

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Edoardo Epifori

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