The Green Deal could help Europe reduce its costly dependence on imported fossil fuels.
From the outset, there have been many complaints within the European Union that the ‘Green Deal’, which aims to decarbonise the European economy, is harming the competitiveness of our industries.
Dangerous dependency
The Green Deal is a European plan aimed at making the economy, energy sector, transport and industries more sustainable in order to limit climate change. The objective is to reduce emissions by 55 per cent by 2030 and to achieve full carbon neutrality by 2050.
But could the green transition actually help Europe reduce one of its biggest economic vulnerabilities: its dependence on imported fossil fuels?
Energy prices in Europe are currently significantly higher than in other major economies, at roughly double those in the United States and 50 per cent higher than in China and India. This situation is due on the most part to geopolitical factors. The EU has always been dependent on oil and gas imports, which would not be a problem in a peaceful world of relatively fair trade.
Yet this dependence has proved to be a major weakness against a backdrop of disruptions to the European economy: first, the drop in Russian fossil fuel supplies since 2022, and then the war in the Middle East.
Dimitris Tzanidakis, an expert in international relations and lecturer at BCA College, paints a bleak picture in these times of ‘permacrisis’.
Dimitris Tzanidakis, Professor at BCA College, Interview by Nikos Andritsos & Marianna Pliakostamou, SKAI (in Greek)
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“The new normal, is that crises are no longer exceptions. A war; an energy crisis; an economic crisis, especially since 2008 onwards… This has become the new normal.”
Energy security, therefore, is increasingly intertwined with the question of competitiveness. Europe currently pays significantly more for energy than some of its major competitors, while continuing to depend on external suppliers.
Tzanidakis argues that this dependence is itself a major economic weakness.
Dimitris Tzanidakis, Professor at BCA College, Interview by Nikos Andritsos & Marianna Pliakostamou, SKAI (in Greek)
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“If there is one particularly problematic issue in Europe’s situation, it is this paradoxical energy dependency. Every year, we spend hundreds of billions of euros on imports of oil and fossil fuels; we make agreements with Azerbaijan; we previously relied on multiple pipelines with Russia, such as Nord Stream… and yet we have failed to invest sufficiently in green energy. I believe this is a demand of our times and ought to be a genuine priority rather than a mere ‘strategic plan’ without substance or timelines.”
The Greek expert stresses, therefore, the importance of being able to generate electricity locally, thus preventing both our economy and our well-being from being dependent on the goodwill of foreign suppliers.
And here, there may be hope on the horizon.
Researchers at the International Energy Agency have found that existing wind and solar capacity has reduced Europe’s dependence on fossil fuel imports, lowered wholesale electricity prices and made countries with a higher share of renewable energy less vulnerable to gas-price volatility.
This is why, says Europe’s former environment commissioner Virginijus Sinkevičius, the whole debate about the EU’s use of fossil fuels comes down to one basic point.
Virginijus Sinkevičius, Member of the European Parliament (Lithuania, Greens/EFA), Interview by Augustė Lyberytė, Žinių radijas (in Lithuanian)
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“Why can’t it be dependent on [fossil fuels]? This is elementary – we simply do not have them. If we had oil and gas deposits, everything would be fine and this would be more of an ideological discussion. Now it is not ideological in the slightest. […] But the matter is very simple: our dependence on fossil fuels is what most undermines our competitiveness. […] The Green Deal is actually a competitiveness opportunity, because its basis is to secure energy production in Europe.”
So, could the Green Deal in fact be beneficial for our industrial future? This is the assertion of Romanian MEP Ștefan Mușoiu, from the Socialists & Democrats group in the European assembly.
Ștefan Mușoiu, Member of the European Parliament (Romania, S&D), Interview by Clara Iancu, Radio România (in Romanian)
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“The green transition is a long-term policy anchored in law, financing and sectoral reforms. Crises have only accelerated it and reframed it as a project of security and competitiveness, without changing its strategic direction.”
The phasing out of fossil fuels makes even more sense these days, as data from the International Energy Agency shows that new power plants running on renewables are cheaper than those running on oil or gas, making them the more competitive option.
Electrify, electrify, electrify?
As we lurch from one crisis to the next, most of European industry has accepted that electrification is not a far-fetched extravagance, but rather a necessity. Electrification involves replacing fossil fuel sources with locally produced electricity from – principally – wind and solar power.
It’s not just about replacing fossil-fuel production. In our increasingly digital world, we need to ramp up our electricity production.
Furthermore, says José Azeredo Lopes, a former minister of defence of Portugal, it is not just a case of transitioning from hydrocarbons to renewables, but also upgrading our electricity system so that it is fit for the future. While renewables make up more than 80 per cent of his country’s electricity production, he says more challenges lie ahead to ensure a stable and sustainable grid.
José Azeredo Lopes, Former Minister of Defence of Portugal, ITV by Alexandre Abrantes Neves, Radio Renascença (in Portuguese)
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“We increasingly need to invest in our grids, we increasingly need to invest in flexibility, and we increasingly need to invest in interconnections between countries. […] These are the most important areas of investment where public authorities, at the national and European level, play a decisive role.”
In this context, the debate in Luxembourg over Google’s planned data centre – a project criticised for its massive energy and water requirements – perfectly encapsulates the dilemma of how to expand electricity production without overlooking environmental shortcomings.
Here is Blanche Weber, president of Luxembourg’s Ecological Movement.
Blanche Weber, President of the Luxembourg’s Ecological Movement, Interview by Jean-Claude Majerus, Radio 100,7 (in Luxembourgish)
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“If the Google site were built as planned, Google would account for 15 per cent of the national electricity consumption. That would amount to – brace yourselves – as much as all of Luxembourg’s households combined. And the second thing is that if Google came under these proposed conditions – and this is stated in the dossier – then the company would emit five to seven per cent of Luxembourg’s CO2 emissions.”
Therefore, the challenge is not only to electrify Europe, but also to ensure that energy is transported efficiently and remains affordable.
This could establish the Green Deal as a means of fostering greater economic resilience. However, this will only be possible if Europe puts in place the necessary infrastructure to make clean energy abundant and competitive.
- Hermine Donceel, Euranet Plus News Agency
