What progress is the EU making on ending its reliance on Russian energy? Source: World Economic Forum

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What progress is the EU making on ending its reliance on Russian energy?

Jun 29, 2022

Moscow’s invasion of Ukraine over 100 days ago led to EU demands to dramatically cut the bloc’s use of Russian energy.

Image: REUTERS/Dado Ruvic/Illustration

Stefan Ellerbeck

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  • European Union leaders say they will block Russian oil imports arriving by sea by the end of 2022.
  • The EU has also committed to reducing gas imports from Russia by two-thirds within a year.
  • The bloc is also looking at accelerating its clean energy transition by setting aside “go-to areas” of land or sea for renewables.

Moscow’s invasion of Ukraine over 100 days ago led to EU demands to dramatically cut the bloc’s use of Russian energy. But what has the European Union actually done since then?

Russia has historically been the world’s leading exporter of natural gas and the second-largest oil supplier after Saudi Arabia. It has also been the EU’s leading supplier of imported oil, gas and coal, accounting for two-fifths of gas supplies, a quarter of crude oil deliveries and almost half of all shipments of solid fuel, such as coal.

Around half of Russia’s crude oil exports went to Europe in 2021, including to non-EU members the UK and Norway. EU countries paid €99 billion ($105 billion) for Russian energy imports last year, according to the European Commission – two-thirds of the total value of goods the bloc imported from Russia.

EU countries and the UK have regularly paid more than $100 billion a year for Russian energy supplies. Image: Statista

EU bans on Russian energy

But at the end of May, the EU said it would block all Russian oil imports by sea by the end of 2022. That will cut off around two-thirds of Russian oil supplies to the bloc.

  • Poland and Germany have also said they will end pipeline imports, but not all member states have agreed to this. Hungary and Slovakia are dependent on receiving oil from Russia through pipelines.

The move is part of a sixth round of sanctions approved at a summit in Brussels. European Council President Charles Michel says this will cut off a huge source of financing for Russia’s war on Ukraine.

Share of Russian energy resources in total oil and petroleum product imports in the European Union (EU) and the United Kingdom (UK) in 2020, by country. Image: Statista

EU countries are now looking to buy more oil from other producers. More oil is also being put into world markets – members of the International Energy Agency, which include the US, said in April that they would release 120 million barrels of crude and oil products from emergency stockpiles to try to keep prices down.

Alternatives to Russian gas

The EU also committed in March to reducing gas imports from Russia by two-thirds within a year, but it has proved difficult to get agreement on further measures such as an outright import ban.

Germany relies on Russia for almost half of its gas supply, and has recently had to limit gas use in electricity production and appeal to citizens to conserve energy after Moscow cut some supplies, Al Jazeera and the Financial Times report. The supply disruption is also forcing Germany to use more coal-fired power plants.

The UK is increasing its gas exports to continental Europe in an attempt to help to fill storage sites ahead of the winter, the country’s Office for National Statistics says.

The EU is also planning for longer-term energy independence. Just weeks after Russian forces invaded Ukraine in late February, Brussels announced the REPowerEU plan to end all Russian energy imports by 2030.

“We must become independent from Russian oil, coal and gas,” said European Commission President Ursula von der Leyen. “We simply cannot rely on a supplier who explicitly threatens us.”

Green transition

As well as securing alternative energy supplies, the REPowerEU plan aims to speed up the green transition by increasing investment in renewable energy.

Discover

What’s the World Economic Forum doing about the transition to clean energy?

Moving to clean energy is key to combating climate change, yet in the past five years, the energy transition has stagnated.

Energy consumption and production contribute to two-thirds of global emissions, and 81% of the global energy system is still based on fossil fuels, the same percentage as 30 years ago. Plus, improvements in the energy intensity of the global economy (the amount of energy used per unit of economic activity) are slowing. In 2018 energy intensity improved by 1.2%, the slowest rate since 2010.

Effective policies, private-sector action and public-private cooperation are needed to create a more inclusive, sustainable, affordable and secure global energy system.

Benchmarking progress is essential to a successful transition. The World Economic Forum’s Energy Transition Index, which ranks 115 economies on how well they balance energy security and access with environmental sustainability and affordability, shows that the biggest challenge facing energy transition is the lack of readiness among the world’s largest emitters, including US, China, India and Russia. The 10 countries that score the highest in terms of readiness account for only 2.6% of global annual emissions.

To future-proof the global energy system, the Forum’s Shaping the Future of Energy and Materials Platform is working on initiatives including, Systemic Efficiency, Innovation and Clean Energy and the Global Battery Alliance to encourage and enable innovative energy investments, technologies and solutions.

Additionally, the Mission Possible Platform (MPP) is working to assemble public and private partners to further the industry transition to set heavy industry and mobility sectors on the pathway towards net-zero emissions. MPP is an initiative created by the World Economic Forum and the Energy Transitions Commission.

Is your organisation interested in working with the World Economic Forum? Find out more here.

The EU had already begun a shift away from fossil fuels before Russia’s invasion of Ukraine. Its Green Deal, launched in 2019, aims to more than halve EU greenhouse gas emissions by 2030 and take Europe to net-zero by 2050.

It is now looking to speed this up by allowing some renewable energy projects to receive permits within a year, rather than potentially having to wait two years, Reuters reports. The European Commission will propose that countries set aside “go-to areas” of land or sea for renewable energy, where such projects would have a low environmental impact.

Germany’s cabinet this month approved plans to require all states to allocate a minimum amount of land to onshore wind farms.

And on 27 June, EU energy ministers backed laws to save energy and promote renewables, with aims to derive 40% of renewables sources by 2030 and cut energy consumption by 9% against expected levels.

“Let’s dash into renewable energy at lightning speed,” says Frans Timmermans, who heads the EU Green Deal. “Renewables are a cheap, clean, and potentially endless source of energy and instead of funding the fossil fuel industry elsewhere, they create jobs here.”

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Nine of the top ten countries in the World Economic Forum’s Energy Transition Index 2021 were European. Russia was ranked 73rd.

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