Energy sovereignty in Europe: what's at stake?

On 24 February 2022, as Russian troops set foot in the Donbas region, the world held its breath. After the annexation of the Crimean peninsula in 2014, Vladimir Putin took another decisive step in restoring the Federation of Russia on the European continent. The reactions from the international community were swift. The same day, the European Union, perceiving in the annexation of Ukraine a direct threat to its own security, issued a package of economic and diplomatic sanctions against the Federation of Russia.

A few days after the attack, a plenary meeting was also summoned within the walls of the United Nations General Assembly, exhorting a full withdrawal of the Russian forces from Ukrainian soil. Quick to grasp the gravity of the situation but inefficient in halting Putin's advance in Ukraine, these measures marked the end of an era of peaceful, although not appeased, coexistence between Europe. A nation and an increasingly threatening Russia.

Several months after the initial attack, as the Russian troops crept towards Western Europe, the necessity for European nations to reassess their own ties with the Federation of Russia became evident. In the spirit of similar discussions to counter China's growing global influence, Europeans began to envision a "decoupled" relationship with Russia, no longer bound by a dependence on fossil fuel imports. In 2021, the EU was importing a staggering 45 percent of its natural gas reserves from Russia¹, highlighting a concerning trend given these recent years' focus on "European sovereignty. As such, when energy prices surged dramatically in early 2022, directly impacted by the economic sanctions issued against Putin's regime, the topic of energy autonomy emerged as a central issue. In May 2022, the European Commission consequently drew up the RePowerEU plan, which outlined a complete phaseout of Russian exports by 2027.

And one must admit, great strides have been taken to reach that goal, both at the national and communitarian levels. Ongoing projects, such as the construction of the Nord Stream 2 pipeline connecting Germany and Russia, were abandoned despite substantial investments from private stakeholders. In line with the RePowerEU objectives, the European Union drastically reduced its reliance on Russia, decreasing its share of total gas imports from 45 percent to 15 percent between 2021 and 2023². Nonetheless, according to a report published by the Center for the Study of Democracy, "Western energy sanctions against Russia are failing³.” The publication points to loopholes through which Russian fossil fuels still make their way to Europe, notably through India.

Energy, therefore, stands at the epicenter of a plethora of issues, whether economic, geostrategic, or environmental. As the geopolitical chessboard becomes increasingly unstable, the topic of a sovereign Europe is bound to resurface, shedding light on the European Union's structural weaknesses. Energy dependence represents one of these frailties and will subsequently garner attention from institutional actors. The question is now the following: Is the European energy plan realistic to safeguard Europe's energy independence?

According to a study released in November 2024 by the European Council on Foreign Relations, the European Union scores poorly in terms of energy independence, stagnating at a mere 4.0 out of 10 ⁴. Despite some visible progress in the wake of the sanctions issued against Russia, the European Union still imports a great deal of its petroleum oils and liquefied natural gas from trade partners such as the United States, Kazakhstan, and Algeria ⁵. Much of the consumption of fossil fuels in Europe, therefore, relies on foreign supply, a fact that should worry policymakers in today's context of growing geopolitical disarray.

To remedy this structural weakness, the RePowerEU plan highlighted three strategies to foster a sovereign energy market in Europe: promoting energy efficiency measures, increasing national energy outputs, and diversifying supply sources.

The ideal of an energy-efficient Europe

To quote the European Commission, “Saving energy is the cheapest, safest, and cleanest way to reduce our reliance on fossil fuel imports from Russia.” The logic behind such a statement is simple: lowering demand naturally reduces the need for supply. European policymakers came to this realization pretty early on, adopting in October 2012 the first Energy Efficiency Directive. This text, of a binding nature, established a first set of energy efficiency targets within the European Union, with the objective of reducing primary and final energy consumption by 20% by 2020.

As the 2020 deadline came around the corner, the experiment was a blazing success: not only did the European Union as a whole reach its goal, but most member states also exceeded the Commission's expectations. Successful but heavily influenced by the Covid-19 crisis, which forced the global economy into a slowdown, these results prove that energy efficiency measures can have a tangible effect. The question, however, remained: could the same experiment be replicated without the specific context of the sanitary crisis?

The adoption of a revised Energy Efficiency Directive in October 2023 made that thought a reality. The 2023 directive mirrored the 2012 framework, aiming to further reduce energy consumption by 11.7% by 2030. To achieve this goal, a series of policies pertaining to building renovation, smart mobility, and energy-efficient technologies have been adopted by European institutions, ensuring participation from both the public and private stakeholders.

The development of the ESG (Environment, Society, Governance) legislation provides, in this regard, an additional regulatory framework to incentivize the corporate world to contribute to the energy transition. And although it is still early to appreciate the magnitude of these changes, experts are confident in the potential of energy efficiency measures. For instance, according to estimates from the Buildings Performance Institute Europe (BPIE), renovation of European residential buildings could bring about a 44% reduction in energy demand for heating ⁶.

Whether the European Union manages or not to achieve the expected reductions to its consumption, only time will tell. However, experts seem optimistic. The high score provided by the European Council on Foreign Relations' Sovereignty Index 2024 in terms of energy efficiency (7.5 out of 10) gives credence to the European Union's ability to achieve its targets.

Power generation and self-sufficiency

The second path explored by European states is the logical tangent of the energy efficiency program: rather than decreasing demand, increasing the supply. In practice, it means that an enhanced energy generation at the national level would translate to a lower dependence on foreign supply. Yet, such an assertion ignores the complex energy disparities within the European Union. While some countries like Denmark, Romania, and Sweden stand out for their ability to support their own energy needs, some others, like Spain, Greece, or Portugal, rely more heavily on foreign supply.

The heterogeneous nature of the European energy landscape represents an obstacle to a unified plan, hence the necessity to build national capacities to reach communitarian objectives. In that regard, the advancement in renewable energies provides a unique opportunity to foster a sovereign energy program at the European level while gradually transitioning to a greener economy.

During the COP28 in Dubai, the international community pledged to triple the global renewable power capacity by 2050. And according to the International Energy Agency, the scaling of such solutions would be more cost-effective than fossil fuel exploitation, with 96% of newly inaugurated solar photovoltaic and onshore wind installations engendering lower generation costs compared to new coal and natural gas plants⁷. In fact, the International Energy Agency anticipates a substantial increase in the European renewable energy capacity, surging from 190.1 gigawatts in 2023 to an expected 426.9 gigawatts in 2028 ⁸. As a leader in renewable energy in Europe, Germany already derived 22.5% of its energy from wind and solar sources in 2023 ⁹.

The development of the solar and wind energy sectors would, nonetheless, face the evergreen problem of scalability. In the wake of the most recent wave of tariffs, China imposed a ban on certain rare earth minerals, which are essential in the construction of solar and wind farms. The limited supply of such materials may prove to be a genuine ordeal in the realization of the European Union's energy transition plan. Whether the European grid can sustain such an increase in power and keep up with the expansion of renewable energies may represent another challenge.

Energy independence, a matter of sovereignty

The last piece of the puzzle is more straightforward. The third strategy consists of diversifying the European Union's energy suppliers. By multiplying trade partners, the organization could hedge its investments, thus effectively reducing its own exposure to macroeconomic and geopolitical shocks. As of 2024, the European Union sources most of its petroleum oils—16.1% of its total petroleum oil imports—from the United States, followed by Norway (13.5%) and Kazakhstan (11.5%). The same goes for its natural gas in gaseous state imports, with Norway as the first trade partner (45.6%), Algeria in second (19.3%), and Russia in third (16.6%) ¹⁰.

The shift in European imports between 2023 and 2024 reflects the geopolitical context, with a slight decrease in Russian exports in favor of other trade partners such as Algeria and Kazakhstan. Benefitting from large energy resources, these countries provide an interesting alternative to Russian fossil fuel imports. Nonetheless, that strategy may face some similar challenges as China allocates more resources to the development of the New Silk Roads, in particular with Kazakhstan, whose share in the European energy imports increased by 2.1% between 2023 and 2024.

As Alexander Cooley and John Heathershaw illustrate in their essay entitled "Dictators without borders: Power and money in Central Asia," Central Asian elites have used energy deals to enhance their fortunes, to the detriment of powerless and destitute populations. Engaging further with these regimes may very well broaden the scope of action of these kleptocracies, providing tax havens in the West for corrupt Central Asian government officials.

Moreover, ever since it launched the Belt and Road Initiative in 2013, China has financially contributed to more than 200 projects with more than 150 countries. Much of the infrastructure in Central Asian countries has thus been directly funded by the Chinese government. These vast investments raise questions about the potential dependence the European Union could be exposed to as it continues to expand energy deals in the region. Future energy policies will therefore need to consider the weight of such geopolitical implications.

The inherent limits to the RePowerEU plan

Despite the scope of the RePowerEU plan, energy independence only represents one of the many aspects that the European energy policy framework will have to face in the upcoming years.

Aside from self-sufficiency and autonomy, energy transition and climate policy have also been a core focus of European energy policy. Alarming data coming from the Intergovernmental Panel on Climate Change (IPCC) points to fragilized ecosystems, looming climate-induced migrations, and rising sea levels. Energy transition, as a catalyst for the mitigation of climate-related risks, occupies a central role in that framework.

Simultaneously, in spite of energy efficiency measures, European energy consumption is bound to increase in the upcoming years. The advancement in cutting-edge technologies such as artificial intelligence, quantum computing, and electric vehicles will require tremendous amounts of energy, which the European grid will have to keep up with in order to safeguard the continent's competitiveness internationally.

In other words, while energy sovereignty is definitely on the European agenda, advancements in that area will have to occur alongside continued innovation in energy infrastructure, grid modernization, and cross-border energy cooperation. Only through a holistic approach that integrates technological, regulatory, and market-driven solutions can Europe hope to meet its growing energy demands while maintaining its sustainability and geopolitical standing.