Alice Zaborski: Hello everyone, and welcome to MacroWaves, the podcast from BNP Paribas Economic Research. Today, we’re looking at a crucial issue for Europe: its energy dependence.
We have just heard Ursula von der Leyen, speaking at a press conference on 13 April, express alarm at the additional cost to the European Union of the conflict in the Middle East. She put it at €22 billion, which is equivalent to the rise in the cost of hydrocarbon imports.
This dependence on hydrocarbon imports highlights the European Union’s lack of energy sovereignty. This concerns both the primary energy mix and the infrastructure required for its low-carbon transition.
The EU is making progress, albeit slowly – too slowly, some would say.
To what extent is the EU dependent on imports? What strategies could enable it to reverse this trend, or at the very least, make headway?
To discuss this, I’m joined by Pascal Devaux, an energy economist at BNP Paribas Economic Research. Hello Pascal.
Pascal Devaux: Hello.
Alice Zaborski: Pascal, could you give us an overview of the current situation? Could you provide some figures?
Pascal Devaux: Let’s start with the energy mix in Europe. There is the primary energy mix, which is the total energy needed to generate electricity, fuel transport, provide heating, run factories, and so on. It consists of 67% hydrocarbons, 23% renewable energy and 10% nuclear power.
The dependence on imports is high, around 57% of the energy used in the mix, with large variations from one country to another. This level of dependence has been relatively stable for 20 years, but the breakdown of the energy mix has changed. Oil demand has declined by 1% per year on average, gas demand has remained almost stable and coal demand has fallen by 8% per year since 2018.
Alice Zaborski: So consumption of oil, gas and coal has decreased. Despite this, Europe’s dependence on imports remains consistent. How do you explain this?
Pascal Devaux: This is mainly due to the reduction in hydrocarbon reserves in Europe. For example: gas production has fallen by 36% since 2010, particularly in the Netherlands. Thus, the reasons are fundamentally geological.
Alice Zaborski: Besides hydrocarbons, what is the trend for renewables?
Pascal Devaux: We’ve seen a lot of progress in the role of renewables. Their contribution is currently at around 23% of the mix, compared to 6.5% in 2000. When nuclear energy is included, as a decarbonised source of energy, it makes around a third of the primary energy mix.
Alice Zaborski: What about the electricity mix?
Pascal Devaux: It is where most progress has been made. Since 2024, the proportion of renewable energy in the electricity mix has been higher than the share of hydrocarbons, at around 30%.
Alice Zaborski: How does the European Union intend to reduce this dependence on fossil fuels?
Pascal Devaux: The EU aims to reduce the average dependency rate to 50% by 2030. This will involve reducing the proportion of fossil fuels, which are imported, and accelerating the growth of renewable energy. The objective is to reach a 40% share of decarbonised energy in the primary energy mix by 2030.
Alice Zaborski: So the EU remains highly dependent on fossil fuel-producing countries. Let’s take the specific case of Russia. The RePower EU programme, launched in 2022, aimed to end imports of Russian fuels by 2027. What is the current situation?
Pascal Devaux: The share of Russian gas in Europe’s total gas imports has fallen from over 50% before 2022 to 13% in the first quarter of 2026. And this share is expected to continue to decline in the coming years.
However, given the lack of sufficient reserves in Europe, Russian gas has not been replaced by European gas, but by US LNG. Gas imports from the US have been multiplied by 4 since 2021, and they currently account for 28% of the EU’s total gas imports.
Alice Zaborski: Given significant disruptions in energy supply linked to tensions in the Middle East, what are the prospects for European gas imports?
Pascal Devaux: It is extremely difficult to make projections regarding Europe’s supply sources. The LNG market is currently facing severe disruptions due to the conflict in the Middle East, notably with the destruction of significant production capacity in Qatar. Qatar is the second-largest LNG producer, with 20% of the global capacity of production. We can think that the increase in production capacity in Qatar will be delayed, which will increase Europe’s dependence on the United States.
Alice Zaborski: What about refined petroleum products such as aviation fuel and diesel?
Pascal Devaux: In this area, Europe is evidently in a position of dependence and weakness. Over the past twenty years, we have seen a massive shift in refining capacity from Europe to Asia, and to a lesser extent, to the Middle East. Thus, since 2000, Europe’s share of global refining capacity has fallen from 22% to 14%, while Asia’s share has risen from 26% to 36%.
Alice Zaborski: And what risks does this pose?
Pascal Devaux: In the context of war in the Middle East, we depend on Asian refineries, which use crude oil from the Gulf as a feedstock. Given lower oil supply, Asian producers reduce production and may decide to limit exports to prioritise their domestic markets. For example, China did that a few days after the outbreak of the conflict. However, European inventories of refined products do not exceed two months of demand, and a prolonged blockade of the Strait of Hormuz would expose Europe to shortages.
Alice Zaborski: Now, let’s examine the ‘cleantech’ value chain – or green technologies – which are essential to the low-carbon transition, Europe’s other major objective. Is Europe more self-sufficient in this area?
Pascal Devaux: In the cleantech sector, the dependence on imports depends on the category of equipment.
Europe has been a net exporter of wind equipment since 2000, accounting for 16% of global capacity of production (twice that of the United States).
But in other segments, such as solar panels, batteries, and permanent magnets (which are a key component for wind power and electric vehicles), the dependence on China remains high. China accounts for over three-quarters of solar panel production capacity in the world and produces 93% of permanent magnets.
Alice Zaborski: Batteries seems to be a key element for the future of low-carbon transition. Could you give us some details about it?
Pascal Devaux Yes, large batteries facilitate electricity storage and therefore give flexibility to energy production from renewable sources. China is dominant in this segment of stationary batteries. The European trade deficit in the sector of batteries increased by 45% in 2025 compared to 2024. That is huge and is not a positive trend!
Alice Zaborski: The issue of sovereignty applies to the entire value chain. However, these green technologies depends on critical materials such as copper, lithium, rare earths, etc.
Pascal Devaux: This is a major European vulnerability in the cleantech value chain.
It is extremely difficult to reduce imports of critical materials in the short term, as only very few countries have the reserves and the capacity to refine them. Geographic concentration is high as China accounts for 59% of the global extraction of rare earth and over 90% of their refining. We see the same Chinese dominance in the refining of graphite, lithium and cobalt.
Alice Zaborski: What are the immediate impacts of geopolitical and geo-economic tensions on access to these materials?
Pascal Devaux: In recent years, the escalation of geopolitical tensions and the introduction of protectionist measures by several countries have complicated access to critical materials.
Between 2009 and 2023, global export restrictions on industrial raw materials increased by five. Rare earths have a geopolitical dimension: global demand continues to rise, and producers are using their dominant position to control the market.
Alice Zaborski: Pascal, can you tell us about the initiatives the EU has put in place in this area?
Pascal Devaux: With regard to critical materials, Europe has two programmes, implemented in 2023 and 2024, the Green Deal Industrial Plan and the Critical Raw Materials Act. They aim to reduce Europe’s vulnerability in the sectors of cleantech and critical materials.
More recently, the European Commission established the ‘ReSource EU’ to secure the supply of critical materials. It includes targeted storage policy and international partnerships, notably with Canada, Kazakhstan, Greenland, Chile and Namibia. In addition, around 50 strategic industrial projects have been identified, related to extraction, processing and recycling of critical materials. These projects are scheduled for implementation by 2030 and it is an investment of EUR 22.5 billion.
These European initiatives are expected to increase capacities of production and diversify supply sources. However, they will only partially reduce dependence on imports.
Alice Zaborski: In light of this brief overview of dependencies, what strategies should Europe prioritise to strengthen its energy sovereignty?
Pascal Devaux: I see three priorities.
The top priority is to reduce our dependence on hydrocarbons. We must decarbonise our energy mix and accelerate electrification of demand. But, government policies sometimes lack consistency. France has recently announced measures but they are limited in scope. The European Commission is also continuing to take action in this area.
The second priority is the diversification of supply. For hydrocarbons, we will remain heavily dependent on energy imports, but the diversification of gas supply and of critical materials will help reduce Europe’s vulnerability in the medium term.
The third priority is to progress in the value chain of critical materials and cleantech. The programme ReSource EU is an important step in that direction. From a technology point of view, the battery sector is a priority. It plays a vital role in the decarbonisation of the electricity mix and in the progress of electrification.
Alice Zaborski: In short, it means: less dependence on hydrocarbons, more investment in renewables, and a more resilient supply chain for critical materials.
Pascal Devaux: Exactly.
Alice Zaborski: We’ll have the opportunity to delve deeper into this topic. Thank you, Pascal.
To find out more about these issues related to energy dependence and sovereignty, please visit the BNP Paribas Economic Studies website. There, you’ll find Pascal Devaux’s latest publication. The links are provided in the description.
As for us, we’ll see you very soon for the next issue of MacroWaves.
For more information on this topic, see Pascal Devaux’s EcoInsight : European Union: low carbon transition and energy sovereignty, a path fraught with obstacles
