The de-risking of energy interdependences: EU's new constructive external engagement

Abstract

The mounting geopolitical tensions and rivalries between world’s major economies transform goals and instruments of domestic and external policies. Industrial strategies of leading global powers call for technological decoupling, strategic autonomy and de-risking dependencies in critical value chains. Economic relations and interdependencies become a liability and de-globalisation tendencies are being observed. The energy sector is not exempted from these trends, leading even to weaponisation of energy in some cases. In that vein, this paper explores the character and directions of EU international energy engagemenmt through the geoeconomic lens. Taking inspiration from literature on geopolitics of energy and globalisation with a focus on EU relations with Russia, China and the United States, the paper theorises the concept of de-risking in energy to investigate how the EU is positioning itself as a power while ensuring its energy security and leading the world’s clean energy transition. Looking at three illustrative examples of the energy system transition – supply of natural gas, building of international hydrogen markets and ensuring access to necessary critical minerals – the paper argues that despite deep geopoliticisation of energy, the EU appears to champion new international cooperation in energy through de-risking. This cooperation is, however, directed to new geographies or demonstrates new engagement patterns. De-risking in energy goes beyond a mere diversification because it helps forge new or reconfigure existing international alliances while at the same time it offers new economic opportunities to create local value chains and decarbonise economies in third countries.