Constrained Regulatory Influence: The EU’s Economic Strategy for Clean Energy Supply Networks in Central Asia

This paper examines the European Union’s deployment of economic statecraft instruments to establish and influence clean energy supply networks in Central Asia amid intensifying geoeconomic competition. Situated within theoretical frameworks of economic statecraft and regulatory power, the paper analyses the EU’s capacity to shape markets through predominantly non-coercive mechanisms, including sustainable investment frameworks, green infrastructure financing, and regulatory norm diffusion, while questioning the efficacy of such approaches in contexts resistant to external governance models. The empirical part of the paper scrutinizes major EU initiatives, notably partnerships addressing Critical Raw Materials acquisition, infrastructure financing mechanisms under the Global Gateway initiative, proposed green hydrogen transport corridors, and sustainability conditionalities embedded within trade and cooperation agreements. The central argument advances a critical assessment: despite the EU’s regulatory and normative strategy aligning closely with its Green Deal ambitions and industrial policy imperatives, it generates only marginal and highly contingent influence in Central Asia. This limited efficacy reveals fundamental tensions between the EU’s normative aspirations and the material realities of geoeconomic competition. Three structural impediments constrain EU influence. First, authoritarian governance systems in Central Asian states prioritize regime stability and resource sovereignty over environmental transition agendas, rendering them inherently resistant to conditionality-based engagement. Second, pervasive resource nationalism obstructs value chain integration and systematically rejects externally imposed regulatory frameworks, exposing the limitations of the EU’s market-shaping logic. Third, competing external actors, particularly China’s capital-intensive infrastructure model and Russia’s entrenched energy networks, offer alternative partnership frameworks with minimal governance conditionalities, thereby undermining the EU’s normative leverage. Consequently, EU economic statecraft achieves only selective alignment where Central Asian states’ domestic diversification imperatives temporarily converge with EU clean energy requirements, while simultaneously prompting strategic hedging behaviors that dilute European influence. This dynamic underscore a critical paradox: the EU’s regulatory power, effective within its immediate neighborhood, encounters severe constraints in multipolar geoeconomic spaces where alternative governance models compete. By situating Central Asia within a contested multipolar landscape, this paper exposes the inherent limitations of normative market-shaping strategies in securing strategic supply networks beyond the EU’s regulatory periphery. It shows that domestic politics and competing state strategies limit the EU’s regulatory power and exposes a key contradiction: the EU’s sustainability model is normatively strong but structurally weak in the face of global state-driven geoeconomic competition. This tension questions whether regulatory power can be effective in an age of geoeconomic rivalry.