Memo

Energy union should be the EU’s next big project

Energy union should be the EU’s next big project

Summary The EU is currently the world’s largest importers of energy, and the EU member states’ growing energy dependency and subsequent vulnerability will be one of the key topics on the agenda at the European Council meeting on 26-27 June. The meeting takes place against a dramatic backdrop. Europe is now heavily dependent on fossil fuel imports from Russia, and there is a growing recognition among EU countries that this will be unsustainable over the long term. It also represents a significant geopolitical risk. During the crisis in Ukraine, Russia has used energy exports as an economic and political weapon against Ukraine and the EU. But what is the solution to this challenge?
 
At the European Council’s meeting, the member states’ and governmental leaders will discuss, among other topics, the European Commission’s new recommendations for a European Energy Security Strategy. However, Think Tank EUROPA believes that these recommendations will be completely inadequate in addressing the challenge that Ukrainian crisis has unveiled. Instead, it requires much more ambitious objectives.
 
There is a need to establish a European energy union that makes EU countries less dependent on imported energy, raises their energy efficiency, reduces Europe’s CO2 emissions and creates long-term stability in its energy policy which yields good returns from investments in energy sources of the future.
 
Today, the EU imports 53 percent of the energy used in its 28 member states, and a significant amount of this energy is bought from countries ruled by authoritarian regimes that do not share the values of the EU countries.
 
If strong steps are not made to find alternative solutions, the EU will end up spending around 600 billion euro per year on coal, oil and gas imports by 2050, compared to the 388 billion euro it spent in 2011. Europe’s security and economic competitiveness will be strengthened in the long term if Europe manages to reduce its energy dependence and transfers less money to the world’s authoritarian regimes.

Main conclusion
  • The EU member states’ and governments’ leaders should take suggestions of a European energy union seriously at its meeting on 26-27 June. Energy dependency and greater energy security for EU countries should be given top priority.  
  • The EU is now the world’s largest importer of energy, importing almost 400 billion euro worth of fossil fuels. The EU countries are becoming increasingly dependent on energy imports from authoritarian regimes and this has put a ticking bomb under Europe’s economy and security.
  • Russia’s threats during the crisis in Ukraine underscore the urgent need for EU countries to convert to other sources of energy.
  • The European Council meeting should set binding and ambitious targets for increased energy efficiency and a greater use of renewable energy sources. The EU countries should raise its target and aim for 40 percent greater energy efficiency by 2030.
  • Shale gas is not a viable, safe or affordable solution to the EU countries’ long-term energy problems, and it can only cover a small portion of Europe’s gas supply. The EU should therefore focus on a broader range of renewable resources and at the same time lower its energy consumption considerably.
  • Denmark could come out as one of the winners from the EU’s energy conversion if the EU countries set higher, binding targets and provide businesses with new incentives to invest in converting to alternative sources of energy.
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