The EU in a Petrostates and Electrostates World |
In a world increasingly shaped by US-China energy bipolarity, the EU must reduce its strategic vulnerability to both fossil-fuel exporters and clean-technology powers by recalibrating its regulatory approach, reimagining energy security around resilience and adaptability, accelerating electrification, and avoiding new forms of dependence on any single power.
The world is entering a new era of energy bipolarity. On one side, fossil-fuel exporters (“PetroStates”) are seeking to consolidate their power through higher oil and gas exports. On the other hand, clean-technology powers (“ElectroStates”) are accelerating the electrification of their energy systems while strengthening their stronghold on all the technologies that enable it. This conceptual dichotomy—which we first outlined in our earlier piece, “PetroStates and ElectroStates in a World Divided by Fossil Fuels and Clean Energy”—has since become visible in an energy order increasingly shaped by the tension between these two models.
Yet this energy bipolarity sits within geopolitical bipolarity, defined by the growing rivalry between the United States and China. Washington remains the central node of the global fossil-fuel economy: it is the world’s largest oil and gas producer, a financial hegemon, and now the largest liquefied natural gas (LNG) exporter. Beijing, by contrast, anchors the clean-technology superstructure: it controls over 70 percent of global solar manufacturing and battery cell production capacity, and dominates the processing of most critical minerals essential for electrification.
Thus, while PetroStates and ElectroStates shape global energy flows, the gravitational forces that structure the system emanate from the two superpowers. The United States and China are not simply large participants in the energy market—they are order-shaping poles; the United States through financial power, sanctions, LNG export dominance, and its security footprint, and China increasingly through manufacturing scale, supply-chain control, and the technical standards in clean-energy industries.
In this tightening bipolar landscape, Europe occupies a deeply uncomfortable middle ground—highly dependent on both blocs, yet fully aligned with neither. The region aspires to become an ElectroState, consistent with its Net Zero ambitions, but it remains heavily reliant on Chinese clean-technology supply chains and continues to import large volumes of fossil fuels. Consequently, Europe’s vulnerabilities are no longer merely commercial or technological; they are becoming structural features of a system shaped by two competing powers.
Europe, therefore, enters this new era facing its most strategically constrained energy environment in modern history. This raises a fundamental question: can the Continent transform itself from a vulnerable importer to a more resilient and more autonomous actor?
Europe’s Current Situation: From Dual Dependency to “Asymmetric Embeddedness”
Despite the European Union’s (EU) ambition to reach Net Zero by 2050, fossil fuels still accounted for 73 percent of its primary energy consumption in 2024. Compounding this challenge, the EU—a very small oil and gas producer—is highly dependent on fossil fuel imports, especially for oil and gas (over 95 percent and around 90 percent, respectively). Moreover, Europe is not merely dependent on imports—it is embedded in asymmetric energy relationships that reflect US-China rivalry. Its dependency profile is no longer about volumes alone; it is about whose strategic interests those dependencies ultimately serve.
EU countries may be close to eliminating their dependency on Russian gas, but they have now traded this dependency for another. Around 45 percent of the EU’s gas imports in the first eleven months of 2025 came in the form of LNG, more than half of which originated from the United States. This dependence is structurally different from the past: whereas Russia leveraged pipelines, the United States leverages a combination of market power and broader geopolitical expectations. The Turnberry trade deal illustrates how the EU has become vulnerable to coercion from a partner that initially posed as a savior, but now expects Europe to accept a long-term dependency, while pushing it to diverge from its decarbonization ambitions.
Still, Europe has made progress in decarbonizing its power mix: in 2024, around three-quarters of EU power generation came from renewables, hydro, and nuclear. Yet the EU’s overall electrification rate stagnated at around 22 to 23 percent over the past decade, while China’s surged to around 29 percent as of 2024.
Europe seeks to reduce its dependency on fossil fuels through faster decarbonization. However, in doing so, it has also become crucially dependent on Chinese clean technologies: electric vehicles (EVs), solar panels, wind components, and batteries. Its exposure is particularly acute in critical raw materials, as it relies on a handful of suppliers, especially China. Export controlsannounced in April and October 2025 by China heightened concerns over this vulnerability and reminded policymakers that clean-tech dependence can be weaponized as effectively as fossil-fuel dependence. In response, the region adopted the RESourceEU Action Plan in December 2025, aiming to reduce dependency on Chinese supply chains for critical raw materials, support domestic mining and recycling projects, and start stockpiling in 2026.
Europe Is a Market and a Battleground
Europe faces a strategic dilemma rooted in its structural realities. The EU has no significant hydrocarbon resources to credibly position itself as a PetroState. Nor does it command large-scale ElectroTech manufacturing capacity that would allow it to become an ElectroState in the Chinese sense. What Europe does have—and what both PetroStates and ElectroStates covet—is a premium consumer market of more than