The Hague 2025

Young Visions of Peace and Security

ITRE

Committee on Industry, Research and Energy (ITRE) 

Three years on from the invasion of Ukraine, the EU has drastically reduced natural gas imports from Russia, but gas and energy prices remain far higher than prior to the invasion, harming the competitiveness of European industry and household finances. As the EU remains highly dependent on fossil fuel imports, what actions should the EU and Member States take to guarantee both energy supply security and affordability?
Anna Frolova (LV)

Executive Summary

In March 2022, EU leaders adopted a historic Versailles Declaration on the Russian war in Ukraine, reaffirming the EU’s support and pledging to reduce energy dependencies.1 As a result, the share of pipeline gas imports from Russia dropped from over 40% in 2021 to about 8% in 2023.2 The sudden decrease in the gas flow led to a sharp increase in energy prices and disrupted the global energy trade flows. Europe was particularly affected –  gas wholesale prices in the EU were higher than in other big industrialised economies like China and the US. Higher gas prices placed an additional toll on household spending and challenged European industries’ competitiveness in the international market.3 Since 2022, the EU and Member States have taken a series of coordinated actions to diversify European energy sources, ensure the security of supply, and alleviate the effects of the energy crisis on consumers and businesses.4 New trade agreements secured the expansion of liquefied natural gas (LNG) imports from reliable partners, such as Norway and the US, leading to a recovery of energy prices from their peak in 2022. However, the crisis is far from over – energy prices remain considerably higher than before, and many other open challenges still lie ahead.5

Table Of Contents
  1. Committee on Industry, Research and Energy (ITRE) 
  2. Executive Summary
  3. Introduction
  4. Key Stakeholders
  5. Measures in place
  6. Fundamental Challenges
  7. Outlook

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Introduction

In February 2022, Russia’s unjustified and unprovoked invasion of Ukraine shocked the world. In response, the EU imposed sanctions to condone the invasion and weaken the economy of Russia, which included import bans on petroleum products and the pledge to phase out all gas imports from Russia by 2027.6 After the invasion, the EU cut off almost all trade relations with Russia and significantly reduced gas imports, further straining the global energy market, which struggled to keep up with the rapid economic rebound after the COVID-19 pandemic.7 Raising energy costs mainly affected private consumers – leading to a record increase in energy poverty.8 Europe has yet to recover fully from the energy crisis while balancing energy security, affordability, and sustainability.

the European Energy Crisis Explained
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Figure 1.9 European natural gas imports (2021-2024).

Key Stakeholders

  • The Directorate-General for Energy (DG ENER) is the European Commission department that develops and supports the implementation of policies on energy, prioritising clean energy, affordability, security, and diversity of the supply. It is also responsible for supervising various projects on technological development and innovation in the energy sector.10
  • Member States are responsible for addressing national sustainability challenges and spurring economic growth. In the energy sector, they share legislative power with the EU. Each country has a variety of energy sources and national energy policies to meet its diverse energy needs, resulting in a varying energy mix and infrastructure across the EU.
  • The US-EU Energy Council is the main transatlantic forum on energy strategy and security cooperation between the US and the EU. In 2022, the Council introduced the EU-U.S. Task Force on Energy Security which aims to reduce the EU’s energy reliance on Russia.11
  • The European Climate Infrastructure and Environment Executive Agency (CINEA)12 is the European Commission agency that supports the European Green Deal through the effective implementation of clean energy projects,  including the Connecting Europe Facility for Energy (CEF Energy).13 CEF Energy project plays a vital role in diversifying the natural gas supply by investing in new liquefied natural gas (LNG) infrastructure.14
  • The International Energy Agency (IEA) is an autonomous intergovernmental organisation that provides policy recommendations, analysis, and data on the energy sector. 15

Measures in place

International Measures

IEA has been actively working towards solving the energy crisis from the start. Some of its actions include various reports and policy recommendations. Moreover, as a response to Russia’s war in Ukraine, IEA Member Countries unanimously agreed to release emergency oil stocks, amounting to 182.7 million barrels, the largest amount ever released.16

REPORT
A 10-Point Plan to Reduce the European Union’s Reliance on Russian Natural Gas
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In 2022, the EU-US Energy Council introduced the EU-U.S. Task Force on Energy Security to reduce Europe’s dependence on Russian gas.17 As a result, the US exported 56 bcm of LNG to the EU, with the EU becoming the main export destination for the US.18

EU Measures

The Trans-European Networks for Energy (TEN-E) policy, launched in 2013, aims to achieve a cohesive energy network in the EU by facilitating investment in cross-border infrastructure.19 Projects of Common Interest (PCIs), identified under TEN-E, include gas corridors like Balticconnector.20 

Launched in 2021 to help countries recover from the COVID-19 pandemic, the Recovery and Resilience Facility for Clean Energy (RRF) is a temporary funding programme with €648 billion allocated to invest in energy reforms and projects through national Recovery and Resilience Plans.21

The REPowerEU Plan presents a comprehensive list of actions to phase out the dependency on Russian gas.22 Recent regulation dictates that Member States must integrate a dedicated REPowerEU chapter into their Recovery and Resilience Plans.23

Gas storage regulation required EU countries to gill their gas storage facilities to 80% in November 2022 and by 90% every following year, with the target achieved in the last 3 years.24 Demand-reduction regulation25 and the subsequent 1-year extension26 aim to reduce the EU gas demand by 15% each year. The Council of the EU approved a recommendation on continued gas demand reduction measures in March 2024.27

Gas solidarity measures,28 and the 1-year extension29 aim to improve solidarity across Member States through better coordination of joint gas purchasing. The regulation provides a legal framework for the EU Energy Platform which aims to coordinate EU action in the global market and ensure efficient use of the existing infrastructure.30 Platform’s projects include the joint purchasing mechanism AggregateEU and the EU action plan to digitalise the energy system.

Emergency regulation on renewables31 and its extension32 is a temporary political agreement valid until June 2025, which imposes time limits for renewable energy infrastructure permit-granting (no longer than 3 months for solar energy equipment).

National Measures

Member States have negotiated new natural gas deals and political commitments, amounting to an additional 7 bcm supply in 2022.33 Moreover, they have allocated €540 billion in funding to support consumers and households with the effects of rising energy costs, through transfers to vulnerable groups and subsidies. Other national measures include reduced taxes, tax levies, and direct government intervention to control prices, such as price caps and producer subsidies.34

Fundamental Challenges

Market Challenge

Increasing energy prices greatly affected private households, leading to energy poverty in the EU. In 2023, 10.6% or over 47 million people in Europe could not warm their homes adequately, compared to 6.9% in 2021, and the number is expected to grow.35 Energy poverty negatively affects health, well-being, social inclusion, and quality of life, leading to far-reaching challenges in the future.36

In the commercial world, energy-intensive industries (EIIs), such as metal and chemical industries, were particularly affected – EIIs account for more than half of the EU industry energy consumption, so even before the crisis, EIIs were under pressure to change their energy usage to meet carbon emission targets.37 EIIs play a crucial role in the EU economy – in 2019, EIIs employed 8 million people and generated around €550 billion.38 Energy prices in Europe are some of the highest globally, posing a fundamental competitive disadvantage compared to other big economies like the US and China.39

POLICY BRIEF
Decarbonising for competitiveness: four ways to reduce European energy prices
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Supply Security Challenge

The energy supply partners of the EU have shifted substantially in recent years. Although EU gas demand has decreased and Russia – the former leading supplier – has been largely cut out of the energy mix, the EU remains heavily reliant on gas imports. Despite a significant diversification of gas suppliers, this continued reliance presents a significant vulnerability to supply security.40 Increased imports from countries supplying non-EU countries expose the EU to greater global competition – scarcer supply and higher prices. Moreover, rising seaborne gas imports present new risks, such as the choke points in the Suez Canal and Strait of Hormuz.41 The security of maritime trade and offshore infrastructure presents an additional challenge, as seen from recent incidents such as the suspected sabotage of the Balticconnector gas pipeline in 2023 and the Nord Stream explosions in 2023.42

Figure 2.43 EU gas import routes (2024)

Renewables Challenges

Nine years after the conclusion of the Paris Climate Agreement in 2016, the EU is considered a forerunner in the green transition.44 The soaring energy prices have comprised the EU climate objectives and added new risks for achieving the EU climate goals outlined in the European Green Deal.45 In 2022, big oil companies made significant profits from fossil fuels, while reducing their investment in renewable energy.46 New gas project investments have also increased – new LNG terminals will require time to recover these investment costs, delaying investment in the green transition. Although government-imposed tax reduction schemes and price caps for fossil fuels alleviate the rising cost burden on consumers, they could lower incentives for using renewable alternatives.47

Connectivity Challenge

TEN-E project aims to achieve a cohesive and interconnected internal energy market. Varying energy mixes across EU countries make this a challenge, as connectivity only works when sharing identical resources. A renewed focus on fossil fuels contributed to a significant shift in cross-border projects – in 2021, there were no new gas or oil cross-border projects. In contrast, PCIs with an additional capacity of 20 billion cubic meters (bcm) per year were commissioned in 2022.48 Moreover, the energy crisis highlighted a lack of solidarity between Member States – many countries are reluctant to sign bilateral energy solidarity agreements. At the same time, some would even consider cutting off their gas supplies to a neighbour in response to an emergency.49

Outlook

EU has a long road ahead to overcome the current energy crisis while trying to emerge stronger in the process. Countries face a choice – should they prioritise short-term solutions that expand fossil fuel energy supply and directly affect energy prices, such as new gas contracts, or more expensive solutions that would bring a more significant benefit in the long term, such as the expansion of renewable energy sources?50 Additionally, it is essential to foster cooperation and solidarity between Member States and promote energy independence to address this crisis more effectively and ensure energy security in the future.51 Can the EU achieve a cohesive energy market and total energy independence? And if so, why has it not happened yet?

SCIENTIFIC FORESIGHT: WHAT IF?
What if the EU were energy independent?
Read more

Footnotes

  1. The European Council (2022). Informal meeting of the Heads of State or Government. Link ↩︎
  2. European Council. Where does the EU’s gas come from? Link ↩︎
  3. Conall Heussaff (2024). Decarbonising for competitiveness: four ways to reduce European energy prices. Bruegel. Link ↩︎
  4. European Commission. EU action to address the energy crisis. Link ↩︎
  5. European Council. Energy prices and security of supply. Link ↩︎
  6. Regulation EU/2022/1369. ‘Council regulation on coordinated demand-reduction measures for gas’. Link ↩︎
  7. Tomasz Rokicki et al (2023). The Impact of the 2020–2022 Crises on EU Countries’ Independence from Energy Imports, Particularly from Russia. Link ↩︎
  8. Aaron Praktiknjo, Jan Priesmann (2023). Impact of the Energy Crisis on Private Households. Link ↩︎
  9. Ugnė Keliauskaitė et al. (2025). European natural gas imports. Bruegel. Link ↩︎
  10. European Commission. Directorate-General for Energy. Link ↩︎
  11. European Commission. US-EU Energy Council. Link ↩︎
  12. European Climate, Infrastructure and Environment Executive Agency. Link ↩︎
  13. European Commission. CEF Energy. Link ↩︎
  14. EU Science Hub (2024). Interactive gas monitoring dashboard to boost EU energy security. Link ↩︎
  15. rInternational Energy Agency. Link ↩︎
  16. IEA (2023). IEA Governing Board concludes 2022 collective actions. Link ↩︎
  17. European Commission (2023). EU-US Task Force on Energy Security: one year on. Link ↩︎
  18. CIRCABC (2025). EU-US Energy Security Report. Link ↩︎
  19. European Commission. Trans-European Networks for Energy. Link ↩︎
  20. European Commission. Projects of Common Interest and Projects of Mutual Interest. Link ↩︎
  21. European Commission. Recovery and Resilience Facility for clean energy. Link ↩︎
  22. Communication COM/2022/230. ‘REPowerEU Plan’. Link ↩︎
  23. Regulation EU/2023/435. Link ↩︎
  24. Regulation EU/2022/1032. Link ↩︎
  25. Regulation EU/2022/1369. Link ↩︎
  26. Regulation EU/2023/706. Link ↩︎
  27. Recommendation C/2024/2476. Link ↩︎
  28. Regulation EU/2022/2576. Link ↩︎
  29. Regulation EU/2023/2919. Link ↩︎
  30. European Commission. EU Energy Platform. Link ↩︎
  31. Regulation EU/2022/2577. Link ↩︎
  32. 2Regulation EU/2024/223. Link ↩︎
  33. Giovanni Sgaravatti et al. (2022). National energy policy responses to the energy crisis. Bruegel. Link ↩︎
  34. Giovanni Sgaravatti et al. (2023). National fiscal policy responses to the energy crisis. Bruegel. Link ↩︎
  35. European Parliament (2023). Energy poverty in the EU. Link ↩︎
  36. Virginia Ballesteros-Arjona et al (2022). What are the effects of energy poverty and interventions to ameliorate it on people’s health and well-being?: A scoping review with an equity lens. Energy Research & Social Science. Link ↩︎
  37. Sander de Bruyn et al (2020). Energy-intensive Industries. Challenges and opportunities in energy transition. Link ↩︎
  38. European Monitor of Industrial Ecosystems (2024). Monitoring the twin transition of industrial ecosystems. Link ↩︎
  39. ERT (2024). Competitiveness of European Energy-Intensive Industries.European Parliament. Link ↩︎
  40. Agata Łoskot-Strachota et al. (2024). Future European Union gas imports: balancing different objectives. Bruegel. Link  ↩︎
  41. Benedetta Girardi et al (2023). What the Indo-Pacific means to Europe. Trade Value, Chokepoints, and Security Risks. Link ↩︎
  42. Kathryn Armstrong & Vishala Sri-Pathma (2023). Finland investigates suspected sabotage of Baltic-connector gas pipeline. BBC. Link ↩︎
  43. Giovanni Sgaravatti (2024). Electricity tariffs dashboard. Bruegel. Link ↩︎
  44. Ignacio Arróniz Velasco (2024). Three key actions to sustain the EU’s climate leadership at COP29. E3G. Link ↩︎
  45. Elisabetta Cornago (2023). EU climate and energy policy after the energy crunch. Centre for European Reform. Link ↩︎
  46. Stuart Braun (2023). Shell, BP boost profit, sink investment in renewable energy. DW. Link ↩︎
  47. European Parliament (2023). Four challenges of the energy crisis for the EU’s strategic autonomy. Link ↩︎
  48. European Commission (2022). REPowerEU Plan. Link ↩︎
  49. European Court of Auditors (2024). Leakages remain in the EU’s gas supplies. Link ↩︎
  50. Ben McWilliams et al (2022). A grand bargain to steer through the European Union’s energy crisis. Bruegel. Link ↩︎
  51. Michael Carnegie LaBelle (2024). Breaking the era of energy interdependence in Europe: A multidimensional reframing of energy security, sovereignty, and solidarity. Energy Strategy Reviews. Link ↩︎