"Europe’s Energy Future Hinges on Global Powers"

" Europe's Energy Future Hinges on Global Powers \r\nThe European Union\u2019s drive to replace Russian energy imports within two years, boost renewable energy rollout, and meet net-zero goals has put it in a position to become even more dependent on the two antagonistic global powers, the United States and China.\r\n\r\nThe EU trade deal with the U.S. and the EU's reliance on China-made solar PV panels, wafers, and critical battery metals are likely to keep shaping the pace of energy transition in the European Union, which remains firmly committed to decarbonizing economies and becoming a carbon-neutral bloc by 2050.\r\n\r\nThe new geopolitical realities in an increasingly protectionist world make the EU\u2019s energy transition more dependent on trade and tariff policies by the U.S. and China.\r\n\r\nIn the goal to ditch all Russian energy by 2027, the EU is now more dependent on the United States than ever, while the target to accelerate renewable energy installations hinges on Chinese export policies for solar panel components and critical and rare earth elements.\r\n\r\n\u201cBalancing energy security and political realities will determine the pace and success of the EU's energy policies in the coming years,\u201d Reuters energy columnist Ron Bousso\u00a0 points out .\r\n\r\nThe reality under U.S. President Donald Trump is that Europe pledged to\u00a0buy\u00a0 a total of $750 billion \u00a0of American energy in three years, or about $250 billion per year. This would be more than tripling the $76 billion worth of American energy imports into the EU in 2024.\r\n\r\nA large part of the planned increase is expected to come from additional purchases of LNG from the United States.\r\n\r\n\u201cPurchases of US energy products will diversify our sources of supply and contribute to Europe's energy security,\u201d the President of the European Commission, Ursula von der Leyen,\u00a0 said \u00a0last week, commenting on the trade deal with the U.S., under which the American tariffs on most EU goods would be at 15%, half compared to the initially proposed 30%.\r\n\r\n\u201cWe will replace Russian gas and oil with significant purchases of US LNG, oil and nuclear fuels.\u201d\r\n\r\nSo far, so good.\r\n\r\nBut Europe is set to boost its reliance on U.S. LNG and pay higher prices for it, as soaring U.S. exports would drive U.S. benchmark prices higher, while competition for LNG supply with Asia will intensify.\r\n\r\nSignificantly higher EU purchases will need a\u00a0 significant increase \u00a0in U.S. export capacity.\r\n\r\nEven if all other planned or announced projects were approved today, they won\u2019t make it on time for a significant rise in LNG exports to drastically boost EU imports within three years.\r\n\r\nU.S. LNG exports are booming, but they won\u2019t be anywhere close to helping the EU triple its imports of American energy, per the trade deal.\r\n\r\nEurope, however, will become even more dependent on U.S. LNG.\r\n\r\nThe U.S. is already the EU\u2019s top supplier of LNG, with 55% of LNG supply to the bloc from the U.S. so far in 2025, according to\u00a0 estimates \u00a0by the European Commission.\r\n\r\nThe US is also the EU's top oil supplier (17% of all EU imports in 2024), and a key supplier of nuclear fuel and fuel services.\r\n\r\nThe Commission insists that the EU-U.S. trade deal \u201cdoes not undermine EU\u2019s determination to decarbonise\u201d as a jump in LNG imports over the next three years \u201cis fully compatible with our medium- and long-term policy to diversify our energy sources and to implement the REPowerEU Roadmap so that we fully phase out Russian energy imports as soon as possible.\u201d\r\n\r\nThe pillar of the REPowerEU plan and net-zero goals is the acceleration of solar and wind energy capacity installations.\r\n\r\nAnd here comes the Chinese dominance in solar power panels and other equipment. In 2023, China was the EU\u2019s largest supplier of solar panels, accounting for a whopping\u00a0 98% of all imports , per the latest Eurostat data.\r\n\r\nCheap Chinese panels are helping with the solar capacity rollout, but they have put many European solar manufacturers out of business.\r\n\r\nChina\u2019s stronghold in critical minerals and rare earths is also a serious concern for Europe\u2019s automotive and renewable energy sectors. Stephane Sejourne, European Commissioner for Prosperity and Industrial Strategy, has even\u00a0 called for \u00a0the creation of a strategic EU rare earths reserve."

"Europe’s Energy Future Hinges on Global Powers"

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