Energy dependence European countries became evident following the geopolitical upheavals of the two oil crises of the 1970s and the disruptions of Russian gas supplies in 2006, as well as in 2009. In other words, the need for a policy common energy has become an increasingly important priority for the European Union. However, today the Union still lacks a coherent common energy policy and energy continues to be an essential component of national security programs despite major harmonization efforts. According to the European energy security strategy, the The EU imports around 53% of the energy it consumes, which makes it the world’s largest importer of energy, in contrast to the growing demand for energy in the world. The Union needs a consistently integrated energy market to start the transition to a low carbon economy and maintain Europe’s leading role in climate change as well as investment in renewable energies. Since the 1990s, the European Commission has focused on the cost-effective results that can be achieved through harmonized energy supply security policies at a supranational level. For this reason, the framework strategy for a resilient energy union prioritizes the five strategic dimensions: energy security, the internal energy market, energy efficiency, decarbonisation and research, innovation and competitiveness with the ultimate aim of promoting energy security and sustainability throughout the region.

Legal basis of the energy competences of the Member States

Energy, as a policy area in which the EU shares competences with the different Member States, has been of great importance, as evidenced by the clauses of the founding treaty. The Treaty establishing the European Atomic Energy Community (EUROTAM) constitutes the main legal basis for the majority of EU actions in the field of nuclear energy, while Article 194 (1) of the Treaty on the Functioning of the European Union (TFEU) describes the Union’s energy policy with a focus on topics such as security of energy supply, energy efficiency and the interconnection of energy networks with the aim of establishing a common internal energy market. However, the same article recognizes the Exclusive right of Member States to establish the conditions for the use of their own energy resources as well as the overall energy supply against any measures established by the EU institutions. It recognizes the competences of Member States to determine the conditions under which they can exploit their own resources, making decision-making procedures in energy-related matters highly nationalized.

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Member States have distinct domestic energy profiles and needs. More importantly, each state is sovereign over the choice of its energy mix and supply connections. National interests and internal state dynamics will be reflected throughout negotiations at the intergovernmental level. When we look at how energy decisions are made at EU level, another additional point of attention emerges. The current decision-making process of the Union’s energy and climate policy is based on the relevant provisions of the Treaty of Lisbon which introduced the ordinary legislative procedure policy areas too broad with an increased role given to Parliament. The Commission increasingly sees the energy issue as a policy area requiring more supranational governance. However, the transfer of power from national states to EU institutions has been limited – mainly due to the reluctance of member states to transfer sovereignty over energy security, especially with regard to its external dimension.

Prospects for a green economic recovery

The political agenda of the European Union within the framework of the European Green Deal aims to reduce greenhouse gas emissions with an ambitious objective of at least 55% reduction by 2030. Indeed, the impact Decarbonization will be felt differently in each Member State with repercussions on sectoral transformation. the The EU’s iconic Next Generation Stimulus Fund offers the opportunity to rebuild European economies little affected by the Covid-19 pandemic. The European Commission strongly encourages 27 Member States to speed up the submission of their recovery and resilience plans detailing their investment plans under the 750 billion euro stimulus fund. Therefore, Next Generation EU is designed to serve the dual purpose of sustainability and digital transformation. however, bureaucratic and administrative challenges persist as Member States need to show their commitment to using stimulus loans and grants to boost green transition, innovation and digitization.

The strong support given by the EU institutions for a common decarbonisation policy is able to achieve the objectives of competitiveness, security and sustainability vis-à-vis future challenges, in particular climate change. This could change the reluctance of EU members to transfer sovereignty over energy mix preferences and different perceptions of risks. It is imperative to build a bridge between objectives at EU level and national commitments in order to accelerate deployments of renewable energies with its subsequent environmental and socio-economic benefits. Clean energy investments provide a great stimulus for the post-Covid economic recovery. The introduction of clean energy technologies combined with energy efficiency policies can increase energy security and self-sufficiency in the Union. Nonetheless, the EU appears determined to overcome possible drawbacks at a time of great challenges in which it faces internal and external crises.

By Global Risk Insights

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