The EU is spending an extra $28 billion on energy imports, and answering with demand destruction, tax cuts, and a rapid clean energy shift |
The EU is spending an extra $28 billion on energy imports, and answering with demand destruction, tax cuts, and a rapid clean energy shift
Four years ago, Europe was taught a brutal lesson in energy security when Russian natural gas flows to the EU slowed to a trickle. The war in Iran has sparked an even more severe energy crisis, highlighting how a stubborn reliance on energy imports continues to dog the continent.
Nearly two months since the war in the Middle East first broke out, the Strait of Hormuz remains closed to almost all traffic, despite an ongoing ceasefire and negotiations to reopen the critical chokepoint that locked up one fifth of the world’s oil and natural gas supply in the Persian Gulf. In that time, the EU’s energy bill has skyrocketed. In the first 52 days since the conflict started, rising oil and gas prices have forced the bloc to spend an additional €24 billion (around $28 billion) on fossil fuel imports compared to previous levels, according to calculations from the European Commission.
That accounting was part of a Commission report published Wednesday outlining the EU’s strategy to navigate what the International Energy Agency recently called the biggest energy security threat in history. The measures include a familiar dose of policy prescriptions to regulate energy demand, but also call for a long overdue rethink of Europe’s energy system, one that focuses on homegrown sources rather than reliance on fossil fuel imports from hostile neighbors or geopolitical hotspots.
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