Russian-Ukrainian War: Energy Transition Initiatives in the European Union

Russian-Ukrainian War: Energy Transition Initiatives in the European Union

What is going on?

On July 14th, 2021, the European Commission released the European Green Deal, avowing the reduction of 55 percent of the European Union (EU) net greenhouse gas emissions (GHG) and the decoupling of resource use from economic growth by 2055. The Green Deal includes carbon border adjustment mechanisms, energy taxation, energy efficiency, with renewable energy directives, and a cornucopia of alternatives to reduce the accelerating pace of climatic implications on energy consumption and production (European Union, 2021).  

The war between Russia and Ukraine is rendering energy transition initiatives credible and creating the urgency for decarbonization and emancipation from fossil fuel reliance.  In response the EU  has a projected embargo on Russian oil, as both a punitive and transitional means for energy reliance, which was announced in early May. The president of the European Commission Ursula von der Leyen said, during her speech at the European Parliament, that:  

“We will make sure that we phase out Russian oil in an orderly fashion, in a way that allows us and our partners to secure alternative supply routes and minimizes the impact on global markets.” 

Implications for Landlocked States

 Eastern European nations, namely Hungary, Slovakia and the Czech Republic, and neighbouring nations, such as Croatia, a partner in Hungarian energy capacity, remain substantially reliant on Russian oil.  Their reliance on Russian oil is  derived from their geopolitical positioning; these nations are landlocked by the Russian pipeline trajectory. For Hungary, the Budapest station imports approximately 9 million tons of oil from the Friendship Pipeline (Druzhba Pipeline), while Slovakia imports 97% of their oil.  

Statements made by Hungarian officials stress the economic and timely difficulty for energy transition, stating that a 5-year plan, rather than by the end of 2022, a timeline set by the EU, and giving a few billion  dollars is more sustainable for the country. For the Balkan and Eastern European regions, an immediate embargo on Russian oil seems improbable  for energy transition as the transition itself requires Russian oil to embark on the green movement. 

Consequently, Hungary vetoed the EU embargo proposition, under Prime Minister Viktor Orbán, for economic and energy sustainability reasons. This exemption does not invalidate nor halt the EU pledge to cut 90% of Russian oil imports. As the European Council President, Charles Michel tweeted, the cut on oil carries a substantial financial burden on the Russian “war machine”. 

“Agreement to ban export of Russian oil to the EU. This immediately covers more than 2/3 of oil imports from Russia, cutting a huge source of financing for its war machine. Maximum pressure on Russia to end the war.” 

Energy Transition Means: EU Promises

Financial means drive the adoption of technologies, mainly within the renewable energy industries, and justified under economic diversification initiatives. Economic diversification necessitates, as Chang & Lebdioui states, active resource usage of resource rents as a means of increasing the productivity of exportable sectors by reducing production costs (Chang & Lebdioui 2020). It validates the landlocked states reluctance and the EU exemption for a sustainable transition.

Despite failing to impose a definite embargo on Russian oil imports, a 90% threshold is momentum for the green movement as it entices a form of fossil emancipation,  by utilizing decarbonization efforts as a military strategy. 

The EU pledged 2 billion dollars in resource security measures for their embargo and energy transition efforts for landlocked nations. Resource security efforts do not preclude immediate decarbonization but accelerates renewable energy adoption. A statement by Pawel Czyzak, the Senior Energy and Climate Data Analyst at Ember, reinforces the European green transition by stating that: 

“Europe is not coming back to coal or to gas to ensure security, it’s the actually the opposite. Countries are accelerating renewables.”

Kate Abnett reports that most EU nations have, from 2020 onwards, drafted plans to set renewable energy goals, with pre-War investments for greener energy. The European Commission set 210 billion euros for the green energy transition and Russian oil emancipation by 2027.  

An official Twitter statement by Ursula von der Leyen validates the transition away from Russian oil imports with the adoption of the 6th package on June 3rd, 2022 

“We have just adopted our 6th package of tough sanctions against Russia and will keep the pressure on. Europe will support Ukraine as long as it takes, with all the financial, technical and humanitarian aid possible. We will help them rebuild, reform and modernize.” 

Russian Implications

For Russia, there are numerous consequences. The punitive measures impact the military, economic, energy and climate sectors by creating an infrastructural domino effect on the production and consumption systems.

The EU embargo will affect Russia’s energy security since fossil fuel, crude oil, gas, and other heavy GHG energy resources characterize the Russian economy comprising over 35 to 40% of its revenue. 

Efforts to extract oil in the North Pacific and the Russian Arctic Circle are at risk, especially in the industrial sector of Irkutsk, where energy production and transport are vital economic players. 

Despite Russian historical involvement in international climate negotiation plans, the means for war are heavily reliant, as is their technology, on traditional energy. The decarbonization efforts, specifically under the COP26 pledge for Net-Zero, by 2060 are at risk. The reason is that war efforts render climate-related negotiations deleterious without proper green technologies on a war scale.

Whether or not Russia will pull out of the international climate negotiation promises remains speculative and yet to be determined by officials.