For a stable energy supply, Europe must wean itself off unpredictable partners

One of the key challenges for European Union policymakers in the early weeks of 2023 has been how to respond to the United States’ Inflation Reduction Act (IRA)
2022 was a wake-up call for Europeans on their over-dependence on Russia for energy | Photo: Alamy

By Susi Dennison

Susi Dennison is a senior policy fellow and the leader of the European Power programme at the European Council on Foreign Relations

02 Mar 2023

After the initial shock over the breadth of the proposed act, European capitals have been divided on the extent to which the EU should emulate this green protectionism and support the competitiveness of their own businesses as they decarbonise, or take a stance in defence of a global free trade system and refuse to follow Washington’s lead.

Just as 2022 was a wake-up call for Europeans on their over-dependence on Russia from an energy perspective, so too should it have underlined the limits of transatlantic climate partnership in a highly competitive global environment.

However, the European Council on Foreign Relations’ EU Energy Deals Tracker, which shows the energy deals the European Commission and EU Member States conclude with third countries, indicates the EU has not yet digested this reality.

When the Energy Deals Tracker was launched in autumn 2022, there were some warning signs regarding the concentration of new deals around Algeria, Azerbaijan, Egypt, Norway and Qatar. But the US, in particular, had already emerged as the EU’s largest provider of liquefied natural gas.

Fast-forward a few months and the latest version of the Energy Deals Tracker, which now covers 72 agreements, shows reliance on the US has only grown; 15 of the deals made by the EU since January 2023 are with the US.

“It is only by building up our own sustainable energy security that the EU can hope to create resilience to global players’ willingness to weaponise everything”

The shock of the IRA is only one of the various latent frictions in transatlantic relations, from China policy to sharing the burden of aid to Ukraine. And these tensions may intensify if the occupant of the White House after the 2024 elections comes from Donald Trump’s wing of the Republican party.

In light of this, a growing EU dependence on the US in the energy sphere could be seen as a failure to have learnt the lessons from the bloc’s experience with Russia.

It is only by building up our own sustainable energy security – which draws on a mix of reliable partnerships but, crucially, relies increasingly on clean and renewable sources of which Europe is a key provider – that the EU can hope to create resilience to the new reality of global players’ willingness to weaponise everything.

In the run-up to the 2024 European Parliamentary elections, the challenge will be to stay this course, remaining focused on decarbonisation and shoring up energy security in the long term, not only near-term supplies.

Europeans are fearful, for a range of very good reasons – from hard-security questions and rising living costs to the prospect of increased migration against the backdrop of the long-term reality of Vladimir Putin’s war on Ukraine. And nationalist parties are capitalising on these fears and arguing that the EU and international co-operation more broadly are the source of these problems.

In this environment, it is incumbent on EU leaders to demonstrate the importance of European co-operation – and deep diplomatic ties to shore up supply chains and eliminate nasty surprises – and to build longer term stability and security in the bloc’s energy supplies.

It is only by supporting international co-operation – despite the competitive environment – that European leaders can retain, and grow, the permissive consensus for the European project in a frightening world.