RPT-COLUMN-Europe’s next big challenge is closing its energy security divide: Vladimirov

By Martin Vladimirov

SOFIA, Sept 10 (Reuters) - Nearly four years after Europe’s energy crisis erupted in late 2021, the continent has moved from emergency response to system redesign. But the European Union is not out of the woods. Deep vulnerabilities persist, and progress toward clean, secure and affordable supply is highly uneven across the continent.

The Energy and Climate Security Risk Index (ECSRI), developed by the Center for the Study of Democracy (CSD), measures energy security across four pillars: geopolitics, affordability, reliability and sustainability. Its findings reveal a widening energy security divide between leaders like France, Sweden and Denmark and laggards such as Hungary, Italy and Bulgaria.

Europe’s biggest success on the energy security front has been reducing dependence on Russian fossil fuels. Gas imports from Russia have fallen from about 40% of EU supply in 2021 to around 10% in 2025, according to Eurostat. EU members achieved this by boosting purchases from the U.S., Norway and Qatar.

Countries such as Italy and Germany that used to be some of the biggest consumers of Russian energy have almost ceased Russian gas imports, but several nations in Central Europe remain highly exposed. Hungary still buys more than three-quarters of its gas from Russia, based on estimates using Eurostat data, and Slovakia remains tied to Russia's Gazprom GAZP.MM contracts.

New dependencies are also emerging, however.

First, the EU now gets much of its liquefied natural gas (LNG) from the U.S., leaving it vulnerable in future negotiations with Washington on trade or other matters.

Additionally, Europe’s rapid buildout of solar, wind and battery infrastructure has increased Europe’s reliance on Chinese supply chains.

China dominates refining of many critical minerals. It processes over 60% of global lithium, 80% of cobalt, and around 70% of rare earths, all critical for the EU energy sector. Without diversification, Europe risks replacing one dependency with another.

Yet Europe is not without options. France has significantly increased its silicon refining capacity for solar manufacturing, while Sweden already supplies up to 90% of the EU’s domestically produced iron ore and is expanding its copper and zinc output. Portugal is developing vast lithium reserves, and Finland hosts major nickel and zinc refineries.

In the EU’s neighbourhood, Serbia’s Jadar mine could meet nearly 90% of Europe’s lithium current needs if commissioned, though those needs are expected to rise significantly in the coming years. Ukraine is also believed to hold significant titanium and rare earth deposits, but whether these can be mined and processed profitably remains an open question.

AFFORDABILITY CHALLENGES

If geopolitics defined energy policy in 2022, affordability is now the central challenge. Affordability risks in Europe have surged fivefold since 2020 largely due to the price shocks following Russia’s invasion of Ukraine.

Retail power and gas bills remain 40–70% above pre-crisis levels in Southern and Eastern Europe, with coal-heavy Poland, Bulgaria and the Czech Republic the most vulnerable, based on an analysis of Eurostat data. Nordic countries and France, with less-carbon-intensive systems, face much lower affordability risks.

European industry remains under significant pressure due to high energy costs. Between 2021 and 2024, more than 1 million industrial jobs disappeared from Europe, largely due to elevated energy costs. Without long-term clean power contracts and stronger efficiency measures, Europe risks losing competitiveness.

RELIABILITY ISSUES

The nature of energy reliability risks has also shifted in Europe. In an energy system dominated by fossil fuels, the challenge was securing supply. Today, the problem is that renewables are being rapidly integrated into grids without the infrastructure to underpin them.

A clear example of this was the blackout that struck the Iberian Peninsula in April. The sudden loss of 15 gigawatts of solar power overwhelmed systems dominated by inverter-based generation that lacked sufficient backup.

Wealthier states like Germany and the Netherlands are investing in digitalised grids, interconnections and storage. However, in Central and Eastern Europe, outdated grids and limited investment leave energy systems exposed to future outages.

SUSTAINABILITY GAP

On sustainability, the EU has set ambitious goals through the Green Deal, Fit for 55 and REPowerEU. But implementation is uneven across the region.

For example, Sweden, Denmark and Finland have combined renewables, industrial decarbonisation and strong governance to reduce their risk here. And France benefits from nuclear power, which has kept a lid on emissions and costs.

In contrast, many Central and Eastern members are constrained by legacy infrastructure and weaker governance. In turn, they are seeing both emissions and energy costs rise.

Importantly, the ECSRI suggests that energy risks tend to cluster, as countries with high sustainability risks also typically face affordability and geopolitical challenges. Those integrating clean energy, industrial strategy and grid investment are more resilient across the board.

The past four years proved Europe can act in crisis, but the next phase of the energy transition will require more than just reactive policy. It will demand a long-term coherent strategy and better coordination across the region – a heavy lift. But the energy security data make one thing clear: without closing the energy policy divide, Europe’s prosperity and sovereignty remain at risk.

(The views expressed here are those of Martin Vladimirov, Director of the Geoeconomics Program of the Center for the Study of Democracy (CSD)).

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