Europe's energy transition: progress and persistent vulnerabilities after crises

Europe's energy landscape has rapidly transformed following the pandemic and the energy crisis stemming from the war in Ukraine.

European Union countries have significantly reduced their reliance on high-risk energy suppliers, simultaneously boosting energy efficiency and accelerating the integration of renewable energy sources.

This strategic shift has led to a notable decrease in primary energy consumption and overall emissions.

The paper highlights that CO2 emissions have fallen at a faster annual rate post-pandemic compared to previous decades, largely driven by a substantial reduction in energy intensity.

This reduction in energy intensity, alongside the decarbonization of the energy mix, has been a central factor in achieving lower emissions and energy consumption across the continent.

The analysis provides a comparative view across EU member states, detailing how these adaptations have reshaped energy systems.

Despite the progress, Europe's energy transition faces critical vulnerabilities.

These include limited cross-border energy interconnections, insufficient energy storage development, and low electrification levels in key sectors.

These weaknesses compromise system resilience and long-term climate objectives.

The period has also seen high volatility in wholesale and retail energy prices, influenced by gas market disruptions, renewable expansion, and country-specific factors.

This price instability has directly impacted the competitiveness of energy-intensive industries across the EU, creating differentiated trajectories among member states.

Spain, for instance, has improved its relative energy cost position since 2022, while other nations face persistently higher costs affecting industrial performance.