The European Response to Russia’s Invasion of Ukraine

European-Russian relations reflect a close interweaving of interests. No analysis of European security is complete without a close look at Russia’s role and influence as the European Union’s largest source of energy and its most important trading partner. But these relations are now going through a period of tension and instability due to Russia’s February 24 invasion of Ukraine, which had the stated goal of disarming Kyiv and deposing Ukrainian President Volodymyr Zelenskyy, who is seen by Russian leaders as a threat to their country’s national security due to his desire to join the European Union and NATO.

This paper seeks to explicate the impact of the Ukrainian war on Europe’s energy policies, especially following the COVID-19 pandemic, which caused a global economic recession and a rise in energy prices around the world. The global crisis in turn led the EU to build a collective new energy strategy, particularly following Russia’s use of energy supplies as a political and economic weapon in response to American and western sanctions. These developments are certain to lead to serious changes in international relations and in the geopolitical map of the energy industry on a global scale.

Energy and the Ukraine Crisis

The countries of the European Union have long enjoyed stable energy supplies, despite geostrategic transformations following the end of the Cold War, the fall of the Berlin Wall, and the EU’s eastward expansion. Russian energy supplies remained guaranteed, except during the natural gas crisis of 2009 when Russia suspended its gas deliveries via Ukraine for 13 days following a dispute between the two countries over prices. While the crisis did not last long, it was a warning sign of a potential danger to energy security in the EU. This danger became a threat once Russian military operations commenced against Ukraine last February, operations that were a response to the EU’s economic soft-power expansion to integrate Eastern European countries into the eurozone, and to NATO’s attempt to encroach on an area historically considered to be Russia’s backyard.

The countries of the European Union have long enjoyed stable energy supplies, despite geostrategic transformations following the end of the Cold War, the fall of the Berlin Wall, and the EU’s eastward expansion.

The European response to the Ukrainian crisis has been two-pronged: imposing economic sanctions on Russia to increase the cost of the invasion and seeking alternative sources of energy—an effort that has been dubbed “REPowerEU.” It is worth noting that Russia is the fifth largest consumer of European Union exports, the third largest producer of its imports, and the main source of its energy, with Germany being especially dependent in this regard. This gives Russia considerable influence in the eurozone, as well as in Eastern Europe. EU countries obtained nearly 25 percent of their oil imports and just over 39 percent of natural gas imports from Russia in 2021. As part of the current economic war between Russia and the EU, Moscow cut off gas supplies to Poland, Bulgaria, Finland, and the Netherlands, reportedly because they refused to pay in Russian rubles, which the Kremlin had demanded in response to EU sanctions.

Europe’s Graduated Sanctions on Russia

Europe’s sanctions on Russia because of its invasion of Ukraine are not a new tactic; other sanctions were imposed in 2014 following Moscow’s occupation of Crimea and the failure to implement the Minsk Agreement. The new sanctions that were agreed upon with the United States after the start of the February invasion, however, were unparalleled and clearly intended to increase the cost of the invasion for Russia and curb its capacity to continue the war. These initially included freezing individuals’ assets, limiting their travel, and prohibiting their entry into EU countries. The EU also adopted sanctions against Belarus for its support of the invasion of Ukraine.

Sanctions also included freezing assets and both individual and corporate financial accounts in EU banks. The Union also prohibited any transactions using the assets and reserves of Russia’s central bank, thus preventing the country from accessing its savings in the EU’s central and private banks. Russia responded by demanding payment in rubles from “unfriendly” countries, making clear reference to EU member states. But the Union continued to impose further sanctions, preventing Russian airliners from flying into European airports and through European airspace and banning various channels and outlets belonging to Russian news services Sputnik and RT. A fifth set of sanctions in April barred the importation of Russian coal, in addition to other goods. Then a new round in late May was imposed by the European Council to include imports of Russian oil transported by sea. It is important to note that a large portion of EU imports of crude oil arrive by sea. This is why the Union is currently attempting to replace such imports by using other suppliers, which will in effect ban “almost 90 percent of all Russian oil imports by the end of the year,” as President of the European Commission Ursula von der Leyen said at the European Council’s late-May meeting.

Some EU members, such as Hungary, the Czech Republic, and Slovakia, are landlocked and are dependent on overland deliveries of crude oil via the Druzhba pipeline from Russia.

However, some EU members, such as Hungary, the Czech Republic, and Slovakia, are landlocked and are thus dependent on overland deliveries of crude oil via the Druzhba pipeline. These states, especially Hungary—which imports some 65 percent of its crude oil and 85 percent of its gas from Russia—have succeeded in distancing themselves from efforts to cut supplies through this pipeline. This, in fact, explains Hungary’s recent foreign policy decision, which defies the European consensus to supply Ukraine with arms by not allowing lethal weapons to travel across its borders.

Transporting Russian natural gas is a different matter, however, since about three-quarters of Europe’s imported gas comes via overland pipelines and the rest by sea. Russia supplied the EU with 42 percent of its gas imports in 2020 and 39.2 percent in 2021. It is practically impossible in the short-term to think of a quick replacement for the 155 billion cubic meters of gas imported overland from Russia in 2021 with liquified natural gas that can be transported by sea.

This is why the Union is implementing a number of measures meant to alleviate uncertainty about gas imports in the coming winter, such as looking for other suppliers, including Qatar and the United States. The United States’ exports of natural gas to the European Union rose from 5.1 percent of the EU’s total imports in 2021 to 7.3 in 2022, an amount that is likely to increase again soon. Another measure the EU is taking is looking for alternative and effective sources of clean natural gas that serve the goals that were set in its plan for a green transition, “Fit for 55.” The plan was approved by the European Council and Parliament, and aims to achieve climate neutrality by 2050 by curbing emissions over the next few decades.

REPowerEU: Weaning the European Union off Russian Energy

Public opinion polls in EU member states have shown widespread approval of measures taken against the Russian invasion of Ukraine and the necessity of providing humanitarian assistance to those affected by it. Eighty-eight percent of respondents approved of taking measures to welcome Ukrainian refugees from the war, while 80 percent agreed with the Union’s decision to provide financial assistance to Ukraine. Roughly 85 percent, meanwhile, believe that the European Union should take various steps to decrease its reliance on Russian sources of energy as soon as possible.

On May 18, the European Commission adopted the REPowerEU plan to address the Russian war and its repercussions on the international energy market. This was a collection of documents, legal measures, recommendations, and guiding principles and strategies that rely on four pillars: energy conservation, replacing Russian supplies, augmenting alternative energy sources, and funding new infrastructure and reforms in various member states. The plan primarily aims to reduce imports of Russian energy by the end of 2022, completely ending reliance on this source by 2030 (especially given that Russia’s use of energy as a political and economic weapon is costing Europeans some €100 billion per year), and fighting climate change by resorting to green technologies.

On May 18, the European Commission adopted the REPowerEU plan to address the Russian war and its repercussions on the international energy market. This was a collection of documents, legal measures, recommendations, and guiding principles and strategies.

Energy conservation: The plan is designed to help mitigate the effects of fewer energy supplies on the coming winter’s consumption needs if the war continues and Russia again plays the energy card. Changes in consumer behavior may help to reduce consumption by 5 percent. The plan aims to target small and large consumers, encouraging member states to offer incentives such as lowering the value added tax on heating systems, energy-saving machines, and building insulation.

Replacing Russian supplies: The European Union is working with international partners in order to diversify its sources of energy over the next few months, thus replacing Russian supplies. This is being done with the help of regional teams and using the recently-created Energy Purchase Platform to supervise voluntary collective purchases of gas, liquified natural gas, and hydrogen through wholesale deals, to improve the use of existing infrastructure, and to better interactions with suppliers. The European Commission is also looking to establish a “joint purchasing mechanism” to negotiate and reach agreements as the single representative of individual countries.

Augmenting alternative energy: Expanding the use of renewable energy and speeding up its production will more quickly reduce reliance on Russian sources. So will the shift to green technologies that the plan envisions, which will lower energy prices in the foreseeable future. The European Commission intends to raise the percentage of alternative energy for 2030 from 40 to 45 percent as part of the Fit for 55 project. This will require establishing a framework for new initiatives in alternative energy, such as the EU’s strategy for solar power, which aims to double photovoltaic energy by 2025 and generate 600 gigawatts by 2030. Another initiative is the installation of solar panels on new public and commercial buildings, as well as civilian structures.

EU leaders were particularly alarmed by the results of a Copernicus study on the heat wave that washed across the Mediterranean region in 2021, which recommended quick action to deal with carbon emissions. This wave of extreme weather caused unprecedented forest fires over 800,000 hectares in Greece, Turkey, and Italy, and led to devastating floods in Belgium and western Germany that killed more than 200 people. European leaders hope that the plan will eliminate the need for 155 billion cubic meters of fossil fuels, equivalent to the amount imported from Russia in 2021. It is estimated that more than two-thirds of this replacement can be accomplished in one year, which will eliminate the dire need for resources from one supplier. Many EU members also announced plans to increase wind energy, with Denmark, Germany, Belgium, and the Netherlands planning to increase production by 150 gigawatts by 2050.

Funding REPowerEU: The European Commission will fund the REPowerEU plan using the Recovery and Resilience Facility (RRF), which was created to mitigate the economic and social impacts of the COVID-19 pandemic. The RRF will help the European Commission secure the necessary funds to help member states implement reforms and investments that align with EU priorities. The RRF will secure a total of €723.8 billion, of which €385.8 billion are loans and €338 billion are in the form of grants.

Conclusion

The Russian war on Ukraine may lead to rapid and serious transformations in the global geopolitics of energy, especially since Russia—a pivotal player in the international energy market—is using its resources as a weapon, and will very likely continue to do so during the coming winter because of its failure thus far to achieve its aims in the war. This failure is due to substantial military assistance provided by the United States and the European Union, which forced Russia to focus on the eastern Donbas region of Ukraine. But the European Union will bear the brunt of these transformations, since Moscow’s decision to wield its energy supplies as a weapon will mainly impact European countries and markets. This situation poses serious questions regarding the feasibility of the Union’s REPowerEU plan because individual countries have different levels of energy reliance on Russia, and because of price fluctuations and a lack of available sources.

In addition, both full agreement among EU members about a complete cutoff of Russian energy and enthusiasm regarding the continuation of harsh sanctions on Russia depend to a great degree on their longstanding strategic ally, the United States. But upcoming US midterm elections, as well as Russian elections, will certainly impact the war in Ukraine, which will in turn affect EU member states and the mechanisms of consensus that govern its institutions’ work.

At the same time, REPowerEU faces many technical obstacles. First, it requires concessions from all states and a clear commitment—most of all from Germany—to secure natural gas supplies via the Energy Purchase Platform. Second, it must address the need among some states to secure the necessary infrastructure to import energy by sea since they have traditionally imported supplies from Russia via overland routes. Third, some countries will have difficulties securing alternative energy sources in the short term. This is why it is expected that European countries’ responses to Russia’s invasion of Ukraine will be piecemeal and haphazard. Indeed, the Union may find that the results of its response fall below expectations at the national level, prompting member states to seek to protect their national security at the expense of a clear commitment to a specific position regarding the Russian invasion.

This paper has been excerpted from a larger study published on June 16, 2022 by the Arab Center for Research and Policy Studies in Doha, Qatar.