The EU's big energy moves show a new order is quickly emerging
The most important shifts — both substantive and symbolic — in the West's energy stance toward Russia unfolded Tuesday on both sides of the Atlantic.
The big picture: The European Union, long dependent on Russian oil and natural gas, unveiled plans to break that reliance for good — and with astonishing speed.
- Meanwhile, across the pond, the U.S. banned imports of Russian oil, gas and coal.
- The U.K. also announced a phase-out of Russian oil imports by the end of this year.
Why it matters: The invasion of Ukraine is costing Russia its largest market for hydrocarbons. But enacting the European plan won't be easy.
- The EU imported about 45% of its gas supplies from Russia in 2021. Europe also relies on Russia for 25% of its oil imports.
1. The EU is seeking escape velocity. The plan would disconnect the bloc from Russia’s fossil fuels “well before 2030."
- Even more aggressively, the EU aims to cut demand for Russian gas by three-quarters by the end of this year.
- It calls for bringing in more LNG from the U.S. and other countries, and replacing gas in heating and power generation.
2. Climate and security priorities have merged. EU leaders recognize the vulnerabilities that come with relying on Vladimir Putin, and see a faster energy transition as a key to solving it.
- “The quicker we switch to renewables and hydrogen, combined with more energy efficiency, the quicker we will be truly independent and master our energy system,” said European Commission President Ursula von der Leyen in a statement.
- The new plan represents a fusing of a slew of new policies with some sped-up aspects of the bloc's climate plan, known as the European Green Deal.
3. A successful break would create big problems for Putin. While Russia could make up for the lost market share in Asia or Africa, its infrastructure is currently better suited for routing natural gas and oil to Europe, with multiple pipelines extending from east to west like veins.
4. Officials must juggle multiple interests. With the cost of natural gas in Europe soaring to record levels, the plan also commits to exploring ways to shield customers from the full extent of energy price increases, through temporary price limits, for example.
5. The EU envisions a big role for hydrogen. The plan includes swiftly creating the necessary infrastructure for manufacturing, importing and storing renewable hydrogen, which could be used for transportation and shipping.
The bottom line: It took just 13 days after Russia's invasion to yield an accelerated European clean energy transition.