EU’s pipeline politics shows urgency of green energy transition

Chief Europe Correspondent

Russia’s invasion of Ukraine has gotten the European Union scrambling for both political solutions and alternative sources of energy to replace the fossil fuel it’s hugely reliant on: natural gas.

The crisis is accentuating a fraught, decades-long energy dependency on Russia, which provides roughly 40% of the EU’s gas needs. Most of it comes via pipeline through Ukraine, which transits the most gas in the world, according to the International Energy Agency.

This energy security struggle brings an urgent warning, European policymakers tell Cipher: the EU needs to accelerate its green energy transformation.

The war against Ukraine is not only a watershed moment for the security architecture in Europe, but for our energy system as well. It has made our vulnerability painfully clear. We cannot let any third country destabilize our energy markets or influence our energy choices.
Energy Commissioner Kadri Simson said Monday following an emergency meeting of EU energy ministers.

An emerging question is whether the EU will use this crisis as a springboard toward cleaner energy or get hooked on gas from elsewhere.

The EU is seen as a leader on the international stage in terms of its climate ambition.

Its €1 trillion ($1.12 trillion) European Green Deal, proposed at the end of 2019 right before the pandemic, is designed to boost offshore wind projects, green hydrogen, energy efficiency, batteries and electrification. This jumbo package is meant to help the EU reach net-zero greenhouse gas emissions by 2050 and become the first climate-neutral continent.

But some European policymakers have also increasingly seen natural gas as a key transition fuel, and the current geopolitical crisis is a sign of how challenging this transformation could be.

“The European Union and all its member states should realize that in addition to an urgent climate crisis, we need to also increase our energy independence due to the increasing comeback of geopolitical actions,” Ville Niinistö, a Finnish member of the European Parliament (MEP) from the Greens group, told Cipher. “The speed of the transition and the coherence of our actions need to increase.”

The crisis is coming alongside skyrocketing energy prices on the continent, which were driven initially largely by global supply and demand issues and are now being exacerbated by Russia’s invasion.

The European Commission has delayed until at least next week new guidance on how to navigate high energy prices and boost the share of renewables. The announcement, initially expected today, was pushed back to better tackle the bloc’s Russian gas dependency.

It’s not the first time the EU has had a supply scare.

Gas price disputes between Russia and Ukraine have lessened European deliveries twice since 2000, which has compelled the bloc to try to find ways to wean itself from its neighbor’s energy—albeit unsuccessfully.

The Energy Union initiative, a 2015 project of the European Commission that had energy security and Russian gas dependency at the top of the list, is a testament of the challenge. The initiative had limited progress. It helped the bloc diversify some routes and suppliers but left it no better off than it was seven years ago vis-à-vis Russia.

In fact, the EU has increased its dependence on Russian gas over the last decade. (See more details with the below chart.)

“The long-term answer to the short-term challenges is to expand Europe’s renewable energy sources as quickly as possible and ultimately become self-sufficient with energy,” said Morten Petersen, a Danish MEP from the liberal Renew Europe group and vice chair of the Parliament’s Industry, Research and Energy Committee. “The technologies are well known, and investors are ready to scale up production.” What Europe lacks, he added, is enough infrastructure linking EU countries to ensure clean energy can flow freely across borders.

For now, gas is here to stay.

Germany, which gets 50% of its gas from Russia, had planned to double its direct gas route from the country through the contentious Nord Stream 2 pipeline. German leaders put that on ice shortly before Moscow’s invasion of Ukraine.

In response, Berlin announced over the weekend it will fast track the construction of two new terminals to import liquefied natural gas from other countries—a move that left environmentalists disgruntled. The government also announced this week plans for a faster deployment of green energy.

“The current geopolitical context forces us not only to continue [to] further the diversification of routes and sources of gas supply to the EU but also to scale up our production of the renewables,” said Jerzy Buzek, a Polish MEP and former Polish prime minister who is also the lead negotiator on one of two key legislative proposals meant to decarbonize the gas market.

In the long term, he added, the role of gas in lower-emission applications, such as some forms of hydrogen and gas derived from organic material, will grow.

A European Commission assessment shows that these cleaner types of gas are set to replace about two-thirds of fossil natural gas by 2050, based on climate and energy policies outlined in the European Green Deal.

Although the EU will have to look for other gas suppliers in the short term, Energy Commissioner Simson said that “ultimately, the best and the only lasting solution is the Green Deal—boosting renewables and energy efficiency as fast as technically possible.”