EU now struggling with soaring costs after losing Russian energy

EU now struggling with soaring costs after losing Russian energy

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EU now struggling with soaring costs after losing Russian energy

By Jennifer Hicks

The European Union’s decision to wean itself off Russian energy has led to soaring energy costs across the continent, European Commission President Ursula von der Leyen revealed during a speech at the World Economic Forum in Davos on January 21.

Her remarks highlighted the substantial economic and geopolitical challenges arising from the bloc’s shift away from its historical reliance on Moscow for fossil fuels.

Before 2022, the EU sourced 45% of its gas, 50% of its coal, and significant quantities of oil from Russia, making Moscow one of the largest energy suppliers to the region.

This dependence had provided the EU with what von der Leyen described as “cheap energy,” but at a hidden cost. According to her, this reliance exposed the bloc to potential geopolitical blackmail, as was evidenced during the unfolding crisis in Ukraine.

The EU’s energy policy underwent a dramatic shift after the conflict between Russia and Ukraine erupted in February 2022. In response to Russia’s actions, the EU imposed sweeping sanctions targeting the country’s energy and financial sectors.

These measures, combined with Moscow’s subsequent reduction of gas exports to Europe, drastically reduced the flow of Russian energy to the EU.

Von der Leyen emphasized the sharp decline in Russian energy imports, stating that the EU’s gas imports from Russia had plummeted by 75%, with oil imports reduced to a mere 3% and coal eliminated entirely. This transition, however, has not come without significant economic consequences.

“Freedom came at a price,” von der Leyen admitted, referring to the EU’s efforts to sever ties with Russian energy.

Households and businesses across the region have borne the brunt of skyrocketing energy costs, which remain high despite measures to diversify energy sources.

The surge in prices has not only strained household budgets but also disrupted industries that rely heavily on affordable energy.

Adding to the turmoil was the sabotage of the Nord Stream pipelines in September 2022. These twin pipelines, which run under the Baltic Sea, had served as critical conduits for Russian gas to Europe.

While no party has officially claimed responsibility for the attack, Moscow has accused the United States and the United Kingdom of orchestrating it-an allegation both nations deny.

Compounding these challenges, Ukraine ceased the transit of Russian gas to EU countries through Soviet-era pipelines at the start of 2025.

This move came after Kiev decided not to renew an agreement with Russia’s state-owned energy giant, Gazprom. The decision prompted a sharp response from Slovak Prime Minister Robert Fico, who threatened to suspend humanitarian aid and electricity supplies to Ukraine unless gas transit resumed.

In her Davos address, von der Leyen pointed to renewable and nuclear energy as the way forward for the EU. She argued that the bloc must accelerate investment in “next-generation clean energy technologies,” such as fusion energy, enhanced geothermal systems, and advanced battery technologies.

These investments, she claimed, will reduce Europe’s vulnerability to external shocks and pave the way for long-term energy security.While the EU has made strides in adopting renewable energy sources, the transition has been fraught with challenges.

Renewable energy projects often require significant upfront investment and time to scale. Additionally, nuclear energy-once hailed as a stable and reliable source-remains a contentious issue within the bloc due to concerns over safety, waste management, and public opposition.

Not all EU member states are aligned on the sanctions policy against Russia and the broader approach to energy security. Hungary and Slovakia, for instance, have been increasingly vocal in their criticism of Brussels.

Both nations have called for a reassessment of sanctions and a renewed focus on diplomatic solutions to the conflict in Ukraine.Hungary’s Prime Minister Viktor Orbán has been a consistent critic of the EU’s approach, arguing that sanctions are harming Europe more than they are hurting Russia.

Similarly, Slovakia’s Prime Minister Robert Fico has urged Brussels to prioritize practical solutions to ensure stable energy supplies.

The EU’s pivot away from Russian energy has underscored the delicate balance between achieving energy independence and maintaining economic stability.

While von der Leyen’s call for investment in clean energy technologies signals a long-term vision, immediate challenges persist.

Sky-high energy costs, inflationary pressures, and industrial disruptions continue to weigh heavily on the bloc’s economic recovery efforts.

Moreover, the geopolitical repercussions of the energy crisis are far-reaching. The suspension of Nord Stream gas flows and the sabotage of key infrastructure have heightened tensions between Russia and the West.

Meanwhile, Ukraine’s decision to halt Russian gas transit further complicates the situation, raising questions about the sustainability of the EU’s energy strategy.

The loss of Russian energy supplies has left an indelible mark on the European Union. While the shift was driven by a desire to uphold democratic values and reduce reliance on a potentially adversarial partner, the economic consequences have been profound.

As the EU seeks to navigate this challenging landscape, its leaders must strike a delicate balance between immediate energy needs and long-term sustainability goals.

Ursula von der Leyen’s emphasis on innovation and clean energy reflects a forward-looking approach, but the path to energy security will require not only financial investment but also political unity.

With some member states voicing dissent and households grappling with soaring energy bills, the EU faces a critical juncture in its energy transition journey.

The unfolding energy crisis serves as a stark reminder of the intertwined nature of geopolitics and energy policy, underscoring the need for resilient and diversified energy systems in an increasingly volatile world.