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The head of the International Energy Agency criticized Europe for falling behind China and the United States after making “two huge, historic mistakes” in energy policy, by relying on Russian gas and moving away from nuclear energy.
Fatih Birol, the agency's executive director, told the Financial Times that European industry was now paying the price for these mistakes and that the bloc would need a “new industrial master plan” in order to recover.
Paris-based Birol's intervention comes as EU leaders prepare to discuss the bloc's economic competitiveness this week.
It lags behind China and the United States in areas such as clean technology manufacturing thanks to a combination of onerous regulations and high energy prices. Electricity prices in the European Union are usually two to three times higher than in the United States.
“Existing industries, especially heavy industries, are suffering and will face a significant cost disadvantage compared to other major economies such as China and the United States,” Birol said.
Data from the energy watchdog shows the EU has made a successful transition away from Russian gas after the invasion of Ukraine. In 2023, the European Union produced more electricity from wind energy than from gas for the first time.
Gas from Russia previously represented more than 40 percent of the bloc's supplies, but this fell to 15 percent in 2023 despite increased imports of liquefied natural gas imported from Russia by ship.
Supplies from Norway and the United States have been instrumental in allowing the EU to avoid blackouts – accounting for 30 per cent and 19 per cent of total imports respectively – but the rapid deployment of renewable energy has also helped.
But the debate over nuclear energy has been more polarized.
Countries such as France, Hungary and the Czech Republic support nuclear energy, but other EU member states such as Germany, Austria and Luxembourg strongly oppose it, arguing that nuclear projects are often subject to delays and high costs, and will drain money that would be better spent on renewable energy. power.
Amund Vik, a former Norwegian state minister for energy and a senior adviser at the Eurasia Advisory Group, said that “it is more difficult to do the energy transition without nuclear” because a fixed baseload of energy is needed to support inconsistent wind and solar generation.
“Some nuclear discussions are really healthy and some countries need nuclear weapons,” Vick said. “But some of the discussion that we should not be investing in wind turbines, we should be investing in new nuclear energy, is helping no one.”
In 2019, the European Union set one of the world's most ambitious climate targets with a commitment to reduce emissions by 55 percent compared to 1990 levels by 2030 and reach net zero by 2050.
It has since adopted the majority of legislation to transform its economy to achieve this goal, but politicians fear a backlash when laws such as a ban on new internal combustion engines or stricter energy efficiency rules start to influence voters before the next EU-level elections.
Green policies are also falling on the government's list of priorities, with security concerns over migration and the war in Ukraine preoccupying leaders.
Dan Jorgensen, Denmark's climate and development minister, said that to maintain citizens' support for the Green Deal, the EU needs to “do its homework” and ensure climate policy is integrated.
This had to be done in a way that “doesn't hurt our competitiveness, doesn't hurt our employment, doesn't create more inequality, and in fact does the opposite… It's a very good time to have a discussion about what that looks like.” This matter.”
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