- Russia is the EU’s leading supplier of oil, gas and coal imports.
- But the EU has a plan to end its dependence on Russian energy by 2030.
- Accelerating the switch to renewable energy will be key to this strategy.
The war in Ukraine has plunged Europe into an ethical dilemma over energy. Russia is the continent’s leading supplier of imported oil, gas and coal, and politicians across the EU are looking for ways to end that dependence.
Russia accounts for about two-fifths of the EU’s gas imports, 26.9% of its imported crude oil and almost half of its supplies of solid fuel – meaning solid matter, such as coal, that can be used to produce energy. In all, imports from Russia accounted for a quarter of Europe’s energy consumption in 2020, second only to the 42% produced from the EU’s own resources.
Russia is also the world’s largest exporter of natural gas, the second-largest supplier of crude oil after Saudi Arabia, and the third-largest coal exporter behind Indonesia and Australia.
In 2021, three-quarters of Russia’s gas exports and 49% of its crude oil exports went to Europe, including to non-EU members such as Norway and the UK, the US Energy Information Agency says. The biggest customer for Russian coal exports was China.
And EU countries paid $107 billion for Russian energy imports last year, almost two-thirds of the total value of goods it imported from Russia.
What's the World Economic Forum doing about the transition to clean energy?
Moving to clean energy is key to combating climate change, yet in the past five years, the energy transition has stagnated.
Energy consumption and production contribute to two-thirds of global emissions, and 81% of the global energy system is still based on fossil fuels, the same percentage as 30 years ago. Plus, improvements in the energy intensity of the global economy (the amount of energy used per unit of economic activity) are slowing. In 2018 energy intensity improved by 1.2%, the slowest rate since 2010.
Effective policies, private-sector action and public-private cooperation are needed to create a more inclusive, sustainable, affordable and secure global energy system.
Benchmarking progress is essential to a successful transition. The World Economic Forum’s Energy Transition Index, which ranks 115 economies on how well they balance energy security and access with environmental sustainability and affordability, shows that the biggest challenge facing energy transition is the lack of readiness among the world’s largest emitters, including US, China, India and Russia. The 10 countries that score the highest in terms of readiness account for only 2.6% of global annual emissions.
To future-proof the global energy system, the Forum’s Shaping the Future of Energy and Materials Platform is working on initiatives including, Systemic Efficiency, Innovation and Clean Energy and the Global Battery Alliance to encourage and enable innovative energy investments, technologies and solutions.
Additionally, the Mission Possible Platform (MPP) is working to assemble public and private partners to further the industry transition to set heavy industry and mobility sectors on the pathway towards net-zero emissions. MPP is an initiative created by the World Economic Forum and the Energy Transitions Commission.
Is your organisation interested in working with the World Economic Forum? Find out more here.
Getting away from Russian energy
But things are set to change. On 8 March, the European Union announced a plan to end all Russian energy imports by 2030. This could cause energy costs to soar, but the EU said it will protect businesses and consumers in the bloc by using price regulation, state aid and taxation.
“We must become independent from Russian oil, coal and gas. We simply cannot rely on a supplier who explicitly threatens us,” said European Commission President Ursula von der Leyen.
There's been no shortage of advice to the EU on how to break its energy dependence on Russia. The International Energy Agency (IEA) has produced a 10-point plan outlining how Europe could wean itself off Russian gas. This involves a mixture of maximizing gas storage, sourcing gas from other sources and increasing the amount of power generated from renewable and low-emission sources.
Filling the continent’s gas storage to 90% of capacity is a feature of the EU’s own plan, which also calls for a boost to energy efficiency and a rapid increase in the use of renewables.
“Let's dash into renewable energy at lightning speed,” said Frans Timmermans, who heads the EU Green Deal. “Renewables are a cheap, clean, and potentially endless source of energy and instead of funding the fossil fuel industry elsewhere, they create jobs here.”
Launched in 2019, the Green Deal aims to more than halve EU greenhouse gas emissions by 2030 and take Europe to net-zero by 2050. “It is time we tackle our vulnerabilities and rapidly become more independent in our energy choices,” added Timmermans.
In reality, Europe had begun a shift away from fossil fuels even before Russia’s invasion of Ukraine. As a result, it is ahead of many other regions in its preparations for the transition to a low-carbon future.
Nine of the top ten nations in the World Economic Forum’s Energy Transition Index 2021 were European countries. Russia was ranked 73rd.