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91. The De-Globalisation of Oil: Risks and Implications from the Politicisation of Energy Markets

Author:
Rafael Ramírez
Publication Date:
07-2022
Content Type:
Commentary and Analysis
Institution:
Istituto Affari Internazionali
Abstract:
The EU’s announced ban on Russian oil imports is a strong political measure that will heavily impact international energy markets, restricting the supply of 4.1 million barrels per day (mbd) of oil and derivates to a market which is a net importer of 10.72 mbd.[1] The EU’s ban, which is due to fully come into effect between December 2022 and February 2023, combined with the US’s previous ban of 600 thousand barrels a day (tbd), means that 4.7 mbd of Russian oil and derivatives are being removed from these high oil consuming markets (35.9 mbd in total). If we add the 1.3 mbd of oil that Iran has stopped producing due to US sanctions reintroduced in 2018, we reach a volume of 6 mbd of oil that is restricted or out of the market due to political decisions. The Russian invasion of Ukraine and the unprecedented sanctions and oil ban imposed on Moscow, combined with the previous oil sanctions against Iran, are fast advancing a new geopolitical reality: the de-globalisation of the international oil market.
Topic:
Oil, Sanctions, European Union, Energy, and Russia-Ukraine War
Political Geography:
Europe

92. The Geopolitics of Clean Hydrogen – Opportunities and Challenges for Italy

Author:
Marco Giuli
Publication Date:
06-2022
Content Type:
Working Paper
Institution:
Istituto Affari Internazionali
Abstract:
The emergence of clean hydrogen as an energy carrier promises to shape the future geography of the energy trade. Under growing contestation of interdependence, such a geography should be read through political lenses alongside commercial and technological ones. Generally, hydrogen is likely to reduce the geopolitical sensitivity of energy trade with respect to a fossil-fuel-based energy order by increasing the share of energy produced domestically, shifting geostrategic competition from a focus on grabbing resources to a focus on mastering technology and setting standards, and offering petrostates opportunities for economic diversification. Italy can exploit the opportunities offered by a hydrogen economy for enhancing its energy security and positioning in the regional energy trade. However, it should be careful with monitoring how geopolitical barriers such as regional instability may affect its hydrogen ambitions.
Topic:
Geopolitics, Trade, Hydrogen, Pipeline, and Energy
Political Geography:
Europe and Italy

93. Russian Energy Exports and the Conflict in Ukraine: What Options for Italy and the EU?

Author:
Margherita Bianchi and Pier Paolo Raimondi
Publication Date:
03-2022
Content Type:
Commentary and Analysis
Institution:
Istituto Affari Internazionali
Abstract:
Putin’s war on Ukraine has shaken the European Union to its core. Implications will be long lasting in numerous domains, but it is in the security and energy dimensions that concrete changes are already becoming evident as the EU fast tracks its strategy for energy diversification. The Russian invasion has drastically changed the European energy paradigm, with the new political absolute being a fast reduction of Europe’s overdependence on Russian gas. Diversifying energy supplies away from Russia is a means to tighten the economic noose around Putin, seeking to deprive the Kremlin of billions in energy revenue given that Russia continues to export oil, gas and coal to Europe at very high prices.
Topic:
Security, Sanctions, European Union, Gas, Energy, and Russia-Ukraine War
Political Geography:
Russia, Europe, Ukraine, and Italy

94. A Scramble for Gas: Qatari LNG and EU Diversification Plans

Author:
Pier Paolo Raimondi
Publication Date:
04-2022
Content Type:
Working Paper
Institution:
Istituto Affari Internazionali
Abstract:
Amidst a worsening geopolitical and energy crisis in Europe, the EU is scrambling to increase liquefied natural gas (LNG) imports as one component of its larger objective to reduce its overdependence on Russian gas. In 2021, the EU imported 155 billion cubic metres (bcm) of natural gas from Russia (140 bcm via pipeline and 15 bcm of LNG). Under its REPowerEU initiative, the European Commission aims to increase LNG imports to replace 50 bcm of Russian gas by the end of 2022.
Topic:
European Union, Geopolitics, Gas, Diversification, and Energy
Political Geography:
Europe and Qatar

95. Cold winter: How the EU can help Moldova survive Russian pressure and protect its democracy

Author:
Andrew Wilson
Publication Date:
11-2022
Content Type:
Policy Brief
Institution:
European Council on Foreign Relations (ECFR)
Abstract:
Russia has long used gas prices and supply to put pressure on Moldova. It did so again when the country elected pro-European president Maia Sandu in 2020 and her parliamentary majority in 2021. Moldova occupies a significant geostrategic position with regard to the war in Ukraine, as a key ally and neighbour to that country’s immediate west. The Moldovan government has made some progress on its reform agenda, all while dealing with the impacts of the war, including looking after refugees and handling increased transit of goods across its territory. If the government can get through this winter, in 2023 it should be able to further diversify its energy options and make stronger progress on reform of the judiciary, defence, and security. The EU should support the Moldovan government in its endeavours. The country remains highly vulnerable to Russian pressure but financial assistance in the short term and support for reform in the long term will help it make progress, including towards eventual EU membership.
Topic:
Reform, European Union, Democracy, Energy, and Russia-Ukraine War
Political Geography:
Russia, Europe, Ukraine, and Moldova

96. The Ukrainian Energy Sector at a Crossroads: Opportunities for Poland

Author:
Maciej Zaniewicz
Publication Date:
08-2021
Content Type:
Special Report
Institution:
The Polish Institute of International Affairs
Abstract:
Ukraine’s orientation towards the synchronisation of its energy system with the Continental Europe Synchronous Area (CESA) and the need to determine the future of nuclear energy has forced it to settle on an energy transformation strategy. One model may involve replacing nuclear and coal with renewable energy sources (RES), as advocated by Germany. However, a solution assuming the simultaneous development of nuclear, gas, and renewable energy would be more beneficial for Ukraine, and for Poland’s energy security. Poland may promote this solution in Ukraine in cooperation with France, the U.S., and the UK.
Topic:
Security, Climate Change, Renewable Energy, Nuclear Energy, and Energy
Political Geography:
Europe, Ukraine, and Poland

97. The EU's Plans to Reduce Methane Emissions in the Energy Sector

Author:
Zuzanna Nowack
Publication Date:
10-2021
Content Type:
Special Report
Institution:
The Polish Institute of International Affairs
Abstract:
Later this year, the European Commission (EC) will present draft legislation aimed at increasing the standards of monitoring ,reporting, and leak detection of methane emissions. Although there is a consensus in the EU regarding the need to reduce emissions of this second-most-harmful greenhouse gas after CO2, the implementation of the EC’s methane strategy and its expected costs are of concern to energy companies, including Polish ones. The EC will have to consider implementing a system of compensation and incentives to mitigate the effects of the proposed reforms.
Topic:
European Union, Methane, Carbon Emissions, and Energy
Political Geography:
Europe

98. The Course of the Energy Transition in Latin America

Author:
Bartlomiej Znojek and Zuzanna Nowak
Publication Date:
12-2021
Content Type:
Special Report
Institution:
The Polish Institute of International Affairs
Abstract:
The energy transition in Latin American countries is increasingly important for their economic development and the fight against climate change. These states want to use their potential of renewable energy sources (RES) and raw materials such as lithium deposits to attract investments and increase their participation in global supply chains building the low-carbon economy. The EU and its Member States—Germany in particular—have been more and more involved in cooperation with the region in these areas. Poland can also benefit, for example, through the exchange of experience and the engagement of Polish companies.
Topic:
Climate Change, European Union, Renewable Energy, Economic Development, Supply Chains, and Energy
Political Geography:
Europe, Poland, and Latin America

99. Financing energy innovation: internal finance and the direction of technical change

Author:
Joëlle Noailly and Roger Smeets
Publication Date:
09-2021
Content Type:
Working Paper
Institution:
Centre for International Environmental Studies, The Graduate Institute (IHEID)
Abstract:
Achieving the goals of the Paris Agreement and of climate neutrality by 2050 in the European Union will require mobilizing financial investments towards clean energy innovation. This study examines the role of internal finance (cash flows and cash holdings) and financing constraints for innovation in energy technologies. We construct a dataset for 1,300 Europeans combining balance-sheet information and patenting activities in renewable (REN) and fossil-fuel (FF) technologies and estimate the sensitivity of patenting activities to's internal finance. We use count estimation techniques and control for a large set of-specific characteristics and market developments in REN and FF technologies. We find that patenting activities ofs specialized in REN innovation are significantly more sensitive to a shock in cash flows thans specializing in FF innovation. Hence, our results emphasize that innovatives in clean energy may be particularly vulnerable to financing constraints. We discuss the implications of these results for energy transition policies aiming to redirect finance towards clean energy R&D.
Topic:
Environment, Science and Technology, European Union, Finance, Sustainable Development Goals, Innovation, and Energy
Political Geography:
Europe

100. The European Union at a Crossroads: Unlocking Renewable Hydrogen’s Potential

Author:
Nicola De Blasio and Alejandro Nuñez-Jimenez
Publication Date:
11-2021
Content Type:
Policy Brief
Institution:
Belfer Center for Science and International Affairs, Harvard University
Abstract:
European countries are at a crossroads on their path to carbon neutrality. Today, they are at the forefront of the global clean hydrogen race but going forward they would be better served by collaborating instead of working alone. Overall, the European Union (EU) is highly competitive in clean technologies manufacturing and thus well-positioned to benefit from the emergence of global hydrogen markets. But a narrow focus on short-term cost considerations could drive member states to implement national roadmaps with little or no coordination among themselves and hence little or no chance of competing globally. As a bloc, the EU has pledged to reach carbon neutrality by 2050. Clean hydrogen is a cornerstone of this transformational effort; accordingly, in July 2020, the EU adopted its hydrogen strategy with the ambition of deploying open and competitive clean hydrogen markets for all energy sectors and segments by 2050.1 Success hinges around implementing a cohesive long-term strategy to address a fundamental ques- tion and its associated challenges: where could the EU source competitive and secure renewable hydrogen supplies? As our previous research shows, all countries have access to renewable resources (such as solar or wind), to different degrees, and could produce some renewable hydrogen locally. However, while resource-rich countries, such as Spain, could evolve into regional exporters, no EU member state has the potential to become a global export champion. At the same time, North African countries, such as Morocco, are well-situated to act as key suppliers to the EU. Furthermore, imports from resource-rich regions like North America could help to address security of supply concerns.2 Today, EU hydrogen demand stands at 7.8 million tons per year (Mt/yr), equivalent to about 10% of global demand. Germany and the Netherlands are the largest consumers, accounting for over a third of EU demand, followed by Poland, Spain, Italy, Belgium, and France, which consume about 0.5 Mt/yr each.3 According to available projections, as hydrogen use grows across all economic sectors, EU hydrogen demand could reach 76 Mt/yr by 2050. But while the EU strategy sets clear targets on electrolyzer deployment by 2030, it provides very few details on how the bloc could meet demand—and at what cost—by 2050.
Topic:
Economics, Environment, Science and Technology, Natural Resources, European Union, Innovation, Hydrogen, and Energy
Political Geography:
Europe