- Strategic autonomy has become Europe’s north star in an increasingly fragmented world, almost ten years after President Macron’s first Sorbonne speech. But what will it take to achieve it? In our Future of Europe series, we examine the necessary reforms, instruments and investments — from trade policy to energy security and the role of the euro — that will enable Europe to address its critical dependencies and vulnerabilities. Today, we will explore the question of energy autonomy, an issue that the Iran war has once again brought to the forefront.
- The escalation of the conflict in the Middle East is a stark reminder of Europe’s unfinished business: achieving energy autonomy. Although Europe’s reliance on Russian gas has improved since 2022, it is merely replacing one dependency with another. Recent events have destabilized global energy markets and highlighted the need for greater energy resilience. Around 20 million barrels of oil per day – about a quarter of global seaborne trade – pass through the Strait of Hormuz, making it a key supply chokepoint. Since hostilities began, oil prices have risen, peaking near 120 USD/bbl. Although the Middle East supplies only about 4% of Europe’s gas, European benchmark prices have nearly doubled as traders fear Asian buyers could compete for supplies. Europe’s industry is most vulnerable to gas disruptions (39% of final energy), transport to oil shocks (with road transport consuming 73% of EU oil), while gas often sets power prices, spreading risks across the economy. The situation recalls the 2022 Ukraine energy crisis and highlights the need to strengthen energy resilience and competitiveness. Russian pipeline gas to the EU fell from 150 bcm in 2021 to 38 bcm in 2025, largely replaced by US LNG (45%), increasing exposure to global market cycles and shipping limits. The EU now operates 33 LNG terminals (215 bcm capacity), with 22 bcm under construction and 78 bcm planned, but without faster electrification and grid expansion it risks replacing pipeline dependence with costly LNG reliance.
- First, Europe must reactivate its energy emergency toolkit. The 2022 energy crisis showed that while price volatility cannot be avoided, its economic impact can be limited through coordinated policy responses combining demand reduction, supply stabilization and targeted fiscal support. Policymakers should therefore replay the crisis playbook: demand reduction, encourage efficiency and compensate industry for temporary curtailment. Power generation can also shift away from gas by maximizing nuclear output and temporarily using other available capacity. On the supply side, rebuilding storage and securing LNG imports are essential ahead of winter. Finally, emergency market tools and targeted financial support can stabilize markets while protecting vulnerable households and energy-intensive industries.
- Secondly, this time around, Europe’s energy autonomy agenda should also be a strategic transition program towards more resilience. The near-term gas pivot worked because governments treated energy security as wartime logistics. But resilience now requires fixing structural weaknesses in market design and delivering a best-in-class power grid. Nuclear power can strengthen Europe’s energy resilience by providing reliable, low-carbon baseload electricity that stabilizes power prices, and ensures system reliability, however it is costly and comes with other challenges (e.g. uranium sourcing, waste management etc.). Europe should address the primary bottleneck to the renewable transition : the inflexibility of the power grid, by building and digitalizing networks, expanding cross-border interconnection and making demand price-responsive at scale in order to enable consumers to shift electricity use when power is cheapest. With congestion costs projected to reach EUR12.3bn by 2030 and EUR56.7bn by 2040 without upgrades, Europe needs to act to avoid price shocks that could reach +22% by 2030 and up to +103% by 2040. To solve this and improve its energy system, we estimate Europe will need to invest around EUR2.27trn in the grid by 2050 (i.e. about EUR 91bn per year), plus EUR101bn per year in wind and solar through 2030 to substantially improve networks, interconnectors, and enable consumers to shift electricity use when power is cheapest.
- The EU ETS is a central tool for reducing Europe's fossil fuel dependence, having already cut power sector emissions by 54% and fossil-based generation by 47% since 2005, with coal imports down 58%. Yet gaps remain: transport and buildings are largely outside the system, with ETSII only launching in 2028, and over 90% of industrial emissions covered by free allowances. The ongoing ETS review is a critical opportunity to reinforce rather than dilute the instrument, and should prioritize sector expansion, phase-out of free allowances, Carbon Contracts for Difference, better revenue recycling, and a broader Carbon Border Adjustment Mechanism to advance energy autonomy while preserving competitiveness.
- 2040 should be the target for a robust EU strategic autonomy on energy. Europe will achieve energy autonomy once it can heat homes and power industrial production primarily with renewables, using electricity where possible, green hydrogen where needed and bridging remaining gaps with a diversified portfolio of independent and long-term stable energy sources. A realistic timeline in three stages would be: 2026-2027 delivers “Russian independence on paper”, 2028-2035 is the window to reach “operational autonomy” by structurally reducing gas demand and relying less on gas plants during periods of high electricity demand, instead using system flexibility such as storage, demand response and stronger grid links, and 2035-2040 is the more conservative horizon for “robust autonomy” if grid projects and flexibility measures expand more slowly than expected.