By Michael Cottakis, 89 Initiative Director
For too long, the EU has depended on Russia to keep the lights on. In order to wrest Ukraine from Putin’s grasp, Europe must rapidly transition to a renewable energy economy now.
As Putin’s War rumbles on, the mood in the west is one of defiance and unity. The barring of Russian banks from SWIFT, seizure of oligarchs’ assets, and hobbling of the trade in services are measures unprecedented in the recent history of international sanctions. These will surely bite.
But there is an elephant in the room; a gaping hole in the sanctions armoury of the western alliance. Despite significant moves the guzzle and drip of Siberian hydrocarbons proceeds unwittingly westward. For all the progress, the EU continues to pay nearly $500 million a day for Russian oil and gas. In this, there lies a basic economic reality. So long as Europe’s democracies persist in taking Russian energy, Putin will be able to comfortably fund this and future wars. To prevent his destruction of Ukraine, the EU must immediately block further imports from Russia. It must then go much further.
The EU has long debated how best to shed its dependence on Russian energy. Recently, much store has been placed in the potential of liquified natural gas (LNG). LNG is productive, efficient, and can be prepared in friendly Texas for transport across the Atlantic. Other alternatives include revitalising initiatives to funnel oil and gas from the Caucasus, or switching to cheaper shale energy, as the US has successfully managed. A final option – no doubt the least likely – involves partnership with Saudi Arabia or Qatar for the transport of oil through the Suez Canal. The suspension of Russian energy imports requires a mixture of the above, and this should be effected immediately.
Yet these are no more than emergency measures; part of the frantic effort to cripple Putin’s economy and slow his assault on Ukraine. In the medium-term, reliance on distant Texan LNG or dear Saudi oil involves costs that do not bear fathoming – for households and for governments. These are costs they cannot long sustain. All the while, Putin will dig in, patiently awaiting the moment Europe squirms and strikes a deal. To win a lengthy war of attrition, the EU must chart a bolder course: between the Scylla of Russian hydrocarbon dependency, and the Charybdis of an interminable energy crisis.
The solution for the EU is the lightning decarbonisation of its economy. The aim of this would be to rapidly replace all energy currently provided by Russian hydrocarbons (circa. 40%) with renewable sources. Politically, this might involve the formation of a Renewable Energy Union, administered by the European Commission, with a borrowing and funding capacity. As with Next Generation EU, the Commission would allocate funds depending on need, with ‘exposed’ member states receiving the bulk of the financing. Its budget may form an appendage to the multi-annual financial framework (MFF) or a sequel to Next Gen EU.
Currently, the EU aims by 2030 to meet 40% of its energy needs from renewables (from 22% today). But given the urgency of the situation, Europe’s energy transition must now be fast-tracked. To wean the EU off Russian oil and gas, and deal the Putin regime the lethal blow, a bolder objective would be 60% by 2025.
This represents the sort of turbo-charge effort climate activists like Greta Thunberg have long advocated. A few months ago, such an outcome seemed impossible. Yet war radically redraws priorities, and is the surest impulse for change. Since 2020, a public health crisis produced developments in MRNA technology we were told would take decades. There is no reason why, in the midst of a yet more dangerous crisis, the EU could not achieve a comparable leap.
The European Council will meet this week to discuss ways to scuttle the Putin masterplan. Such bold measures should not be off the table. Putin predicted in the 1990s that Europe’s reliance on Russian energy would be the rope by which he would eventually strangle us. There can be no surer means of defeating the dictator than by slashing it for good.