The European Commission is shifting the way it talks about the demise of fossil fuels. The framework is no longer the energy transition as a means to prevent climate change. That was the argument that propelled the Green Deal during the period from 2019 to 2021. Since then, when discussing hydrocarbons, the Commission emphasizes that the European Union is left at the mercy of others. The transition has moved from being an ideal political goal driven by a very real urgency to a geopolitical objective. It is a sign of the times.
The Russia-Ukraine war that began in February 2022 was the main driver of that change in emphasis. But the recent crisis in the Strait of Hormuz, triggered by the war waged by the United States and Israel against Iran, which effectively closed one of the key logistical hubs for global energy trade, has demonstrated Europe’s vulnerability. In response to both crises, the EU has reinforced its rhetoric in favor of electrification, though now wrapped in geopolitical and strategic autonomy arguments rather than in climate goals.
Nevertheless, dependence remains a short-term reality. The end of Russian energy has led to a very significant rise in purchases of liquefied natural gas (LNG) from the United States and from Gulf countries as well. The Middle East crisis compels Europe to compete with Asian markets and is driving prices higher for consumers and industries across the Union.
“The energy crises no longer consist of grinding through the moment and waiting for them to pass.” One of the key points of this crisis is to assess how much the European psyche has adapted to a new reality: energy crises no longer consist of bracing and waiting for them to pass. That was the case in the past, but new energy crises linger for a long time within the European economy. As Francesco Corsello and Andrea Foschi, both economists at the Bank of Italy, argued in May in an article published in VoxEU, “until about a decade ago, energy crises affecting the euro area were essentially oil crises, and their inflationary effects, though abrupt, tended to fade away relatively quickly.” “The 2021-22 energy crisis shattered that premise: gas and electricity became autonomous and powerful drivers of inflation, with effects that proved more persistent and widespread than those of oil,” they noted.
Dan Jørgensen, the Commissioner for Energy, has long been trying to convey the same message: what is happening in Hormuz will have long-lasting and far-reaching effects. For weeks there was hope that a cooling of the conflict would allow a relatively quick return to normal, but the resumption of hostilities between the United States and Iran points toward a scenario of high uncertainty in the weeks ahead. And all of this unfolds in the very year when Member States confront winter with the lowest levels of strategic gas reserves.
According to calculations made in April by ACER, the European Union will need to increase LNG imports by 13% in the coming weeks to keep the strategic gas reserves at 90% full for the winter.
As long as we need hydrocarbons
The other question arising in the European debate is how the Union can better manage hydrocarbon flows while it still needs them. And they will need them for a long time: according to data from the Commission itself, last year 57% of the energy consumed within the bloc came from imported fossil fuels. “The EU has spent two decades developing policies to reduce demand for fossil fuels. It does not have a comparable policy to manage the supply it will continue to need during the energy transition,” argued Thijs Van de Graaf of the Brussels Institute for Geopolitics, a think tank based in the capital.
“The other question that is emerging in the European debate is how the Union can better manage hydrocarbon flows while it still needs them.”
“Member States are signing bilateral agreements, companies are signing long-term contracts, and investments in infrastructure are fixing certain routes and suppliers. What is missing is a common framework to assess how well those decisions align with demand declines, energy security, and climate policy,” Van de Graaf continued. “Europe now faces two tasks at once: it must reduce its dependence on fossil fuels as soon as possible and manage the imports it still needs. So far, there is a plan for the first objective, but no strategy for the second,” he noted.
There is indeed a path to do what Van de Graaf requests. In 2022, following the Russian invasion of Ukraine, European leaders commissioned the Commission to create AggregateEU, a platform designed to facilitate the purchase of hydrocarbons, without becoming a joint purchasing platform. This system operated until 2025, and there are already many political groups in the European Parliament who believe the Executive should reactivate it. In an action plan presented this spring, Brussels pledged to play a more active role in coordinating among Member States for crisis management, though in a less ambitious manner.
