prof. Yannis Maniatis
University of Piraeus, f. Minister of Energy, Environment, and Climate Change
(based on speech in «Athens Energy Dialogues 2021», Delphi Forum, February 2021)
Discussing the EU’s energy diplomacy is always complex. I say this, because diplomacy is traditionally described as the art of conducting foreign relations between countries.
The EU is not one country. It is not the United States, or China or Russia. It is a Union of States.
Each Member State continues to run independent foreign policies, despite the establishment of the High Representative for Foreign Affairs.
The EU can only sign agreements, or impose sanctions, when all Members agree.
Of course, international Energy security has increasingly occupied a top spot on the EU’s foreign policy agenda.
But does the EU have an energy diplomacy – with objectives to promote regional stability?
What we can say, is that today, the EU has a well-defined external energy strategy, some multi-level mechanisms, an energy diplomacy Action Plan – and a plethora of international energy agreement.
These certainly promote energy security; and I would argue that –as a by-product–the EU’s tools have potential for promoting regional stability.
I stress however, that neither the EU’s agreements, nor energy strategy, are based on a vision or common understanding among Member States of the EU’s global role.
Rather, Europe’s international energy strategy was shaped by its heavy dependence on imports; and developed as a reaction to the disputes between Russia and Ukraine, which threatened the Union’s security especially in 2006 and 2009.
As a result, the EU has developed an international energy strategy, focusing on promoting infrastructure –the well-known Projects of Common Interest– “PCIs” with which to import diversified sources from diversified routes, and reduce dependence.
This strategy is backed by a series of agreements, designed to “export” the rules and principles of the EU’s single energy market.
The agreements range in degree. But whether we look at the Energy Community – or to looser agreements with partners further away -their common objective is: to promote free markets; free access; a healthy investment environment; and – above all – conditions that, limit opportunities for monopoly suppliers to use their dominant position for political purposes.
So, the EU’s energy diplomacy fundamentally consists of rule-based agreements –and related initiatives for multilateral energy governance– centered on developing infrastructure.
There is no obvious grand diplomatic vision here.
But, despite this limitation, has the EU’s approach promoted regional stability?
I have been personally involved in promoting TAP, the IGB and the East Med pipelines, in the framework of the EU’s policies. So, based on my personal experience of these pipelines, I can tell you that Yes, the EU’s external energy instruments, do play a significant role.
And you know, pipelines are permanent structures, so they have a lasting impact and create greater incentives for cooperation.
Take TAP and the IGB, which transport diversified sources of gas. My point is, that the need of so many countries, to share access to these diversified sources, means that these pipelines become catalysts for cooperation.
For example, in 2013, in the framework of the Adriatic and Ionian Initiative Council, an MOU was signed by 8 European countries agreeing to cooperate on further Development of TAP and IAP pipelines. These included, Albania, Bosnia and Herzegovina, Croatia, Greece, Italy, Montenegro, Serbia and Slovenia. In the same year, Greece, Italy and Albania also concluded the IGA on TAP.
The IGB also generated cooperation. As you know, the importance of this pipeline extends beyond Greece and Bulgaria. Connecting with other pipelines, including those between Bulgarian-Serbia (IBS), Bulgaria- Romania (IBR) and Romania- Hungary (IRH), the IGB forms a Vertical Corridor fostering cooperation.
In this context, we were especially proud to sign, with 14 partners, the MOU on the Joint approach to gas diversification and security of supply challenges in the broader region.
And take the East Med pipeline, which is supported and funded by the EU as a Project of Common Interest.
And also take a look at two other projects: the 2.000 MW ‘Euro Asia Interconnector’, an EU Project of Common Interest, connecting the national electricity grids of Israel, Cyprus and Greece, via subsea cable; as well as the 2.000MW ‘Euro Africa Interconnector’, that will connect Egypt, Cyprus and Greece.
indeed energy However, the EastMed – as well as the 2 emerging “electricity highways” – have served as a catalyst for a series of bilateral and trilateral agreements, and cooperation meetings involving Greece, Israel, Cyprus, Egypt, the EU and the United States.
The East Med has also provided the impetus for the establishment of the Cairo-based East Med Gas Forum.
The Forum, which brings together investors, regulators, producers and consumers can contribute to the development of the regional market, and help provide access to financial and technological resources.
The Forum is also a considerable political achievement; the first example to bring Israel, together with Arab countries, like Egypt, Jordan, Palestine, with the involvement of U.S., and European Member States.
In fact, I believe that the EU’s support for these projects – and especially for the East Med pipeline, constitutes an important diplomatic instrument for the Union. Because, it provides a sense of common purpose and, we have seen, advances relations and multilevel cooperation.
I am not suggesting that the pipeline – or energy in general – can produce stability in the East Mediterranean. For this to happen, the long-standing and deep-rooted issues dividing regional players have to be resolved. While energy is a factor complicating sovereignty and security issues, it is not the main driver.
But, the EU must continue supporting the East Med pipeline. Gas is a valuable source for our energy transition, for the next 30 years. We should do everything possible to ensure that gas resources from our neighbors reach Europe.
As mentioned earlier, I believe that an EU energy diplomacy has indeed emerged, as a by-product of its external energy strategy.
And, with patience and determination, this diplomacy has achieved a level of regional cooperation – which may not have existed without the EU’s initiatives.
However, the EU’s energy diplomacy needs to shift, to take into account the Green Deal and the global energy transition.
For over half a century, the geopolitics of energy has been shaped by access to oil and gas. But with the global energy transition underway, there will be new challenges to deal with.
The EU needs a 2-based diplomatic policy to:
– Become a leader of global energy transition policy, and to
– Meet new security risks.
First, to make the Green Deal effective, the EU has to export it;
Europe produces only 8 per cent, and a decreasing share of global greenhouse-gas emissions. So, the EU’s diplomacy must aim at promoting low-carbon technologies, energy efficiency, increased interconnections of renewables and cooperation on hydrogen.
Of course there will be challenges: –
First, there could be negative effects to the international competitiveness of European firms, which will bear a level of regulation-related costs, unlike competitors in third countries.
Second, the EU’s efforts could be undermined if companies transfer production to countries with less strict environmental regulations, creating carbon leakage.
In such a scenario, emissions will not be reduced. So, to prevent this, a W.T.O-compatible EU carbon border adjustment mechanism is necessary, to put a carbon price on certain imports and ensure the environmental integrity of EU policies.
Second, the energy transition will affect the EU’s traditional producer partners.
EU imports more than €300billion worth of energy products of which, more than 60%, from Russia.
The EU should support the diversification of the traditional producer partner’s economies, like Algeria, Morocco, etc., with a focus on renewables and hydrogen that could be imported to Europe.
In this context, it should also support international initiatives to support a just transition and mobilize international climate finance.
An un-managed energy transition can worsen in-equalities between developed nations and emerging market countries.
With the provision of grants, loans, and guarantees for sustainable energy projects in partner countries, opportunities will be created for EU industry in new markets.
Third, the EU has to manage potential new security risks that will be caused by the need to import materials and metals needed for renewable infrastructure, lithium-ion batteries, electrical vehicles and fuel cells.
The Commission has already noted that the EU’s imports for raw materials may double by 2050. So, the EU has to plan for diversified supplies and avoid overdependence on – for example China, from which the dependence is estimated to 60%.
As I said at the beginning, diplomacy is usually about conducting relations between countries. So far, European states have been reluctant to transfer foreign policy to the EU’s institutions, limiting the role that EU’s diplomacy can play. The dispute among Member States regarding Russia’s Nord Stream is an example.
But now, Europe has an opportunity to become the leader in the global energy transition and digital transformation.
Energy foreign policy objectives must be clearly defined. They should not “happen” as a by-product of energy policies.
To achieve this and really make an impact, we need a political strategy with a vision, based on a common understanding among Member States of the EU’s global role.