European energy policy is focused on two objectives: firstly, to progress in the low-carbon transition to reduce greenhouse gas emissions, and achieve carbon neutrality by 2050, and secondly, to increase energy sovereignty by diversifying sources of supply and reducing external dependencies. This need for greater energy sovereignty is linked in particular to an increase in geopolitical tensions in Europe.
At first sight, these objectives of transition and sovereignty may progress at the same time. Reducing the share of fossil fuels in the energy mix entails progress in decarbonization and reduction in import dependency.
By 2040, the European objectives are ambitious. The share of fossil fuels in the electricity mix is expected to be reduced to around 5%, while the dependency ratio would reach around 30%. Recent developments in these two indicators are mixed. The share of fossil fuels in the electricity mix has fallen from 40% in 2019 to 30% in 2024. On the other hand, energy sovereignty is progressing slowly. Import dependency has fallen from 60% to 58% between 2019 and 2023.
Three elements could constrain the achievement of these two objectives:
Firstly, the decline in the share of fossil fuels in the electricity mix over the past five years is linked to progress in the transition, but as well to some economic factors such as the sharp rise in the price of gas on the European market in 2022. In the medium term, gas prices could decline. Global LNG export capacity is expected to increase by about 45% by 2030, particularly from the United States and Qatar.
Secondly, some recent events of electricity overproduction or grid instability have underlined the need to improve the flexibility of the electricity system in parallel with the development of renewable energies. This flexibility is linked to investments in the grid and storage capacities, and to a non-negligible proportion of flexible energy in the energy mix, such as nuclear or gas. Given the time needed to implement these investments, the proportion of gas in the electricity mix could remain significant in the medium term.
And thirdly, the development of renewable energies depends mostly on imports of capital goods and raw materials, especially critical materials. European production capacities are being developed. Nevertheless, import dependency is likely to remain high in the medium term given the time needed to increase European autonomy and the significant price advantage of some exporters such as China.
