It is clear that the war between Russia and Ukraine will have many effects on economies and political relations around the world. The sanctions imposed by Western countries against the Russian economy have already caused price increases in Russian-sourced products and commodities. It is evident that Russia wants to be left alone. However, in addition to the economic and political effects, the Ukraine war will also have very critical consequences in terms of the climate crisis. At this point, we need to worry about the future of our planet.
In order to better understand the source of these concerns, it is useful to first touch upon the importance of Russia in terms of global energy markets. Russia alone provides 10-25% of oil, gas and coal exports on a global scale. The country is the second-largest natural gas producer in the world after the United States and was responsible for 17% of global production in 2020. It is also the third-largest producer of oil in the world after the U.S., which is responsible for 12% of global oil production, and Saudi Arabia.
When we look at the export profile of Russia, we see that approximately 70% of its natural gas exports and almost half of its oil exports go to the European Union. In the ranking of natural gas exports, Belarus follows the European Union with 8%, while China follows the EU with a share of 31% in oil exports. Therefore, Russia’s position in the energy markets draws attention to its structure, which can affect the whole world, especially the EU.
Russia’s invasion of Ukraine destabilized global energy markets, harmed all consumers, especially fragile households, and deeply affected economies trying to recover from the global coronavirus pandemic. But beyond all this, it has revealed the critical role of energy policies in the future of our planet. At this point, the attitude of the EU, which draws attention to its role in the fight against climate change, is of interest to all countries.
Europe’s search for alternatives
Undoubtedly, Russia’s declaration of war on Ukraine paved the way for the EU to take a clear stance in the long-standing discussions on ending its dependency on Russian natural gas and other resources.
Considering the period we left behind, it seems possible to talk about a bipolar energy strategy structuring in the EU led by France as pro-nuclear energy, and Germany, which continues to use Russian natural gas because it finds it feasible. In this context, while France was advocating for its nuclear energy policies at every opportunity, it drew the reactions of environmentalists who emphasized the risks of nuclear. Germany, on the other hand, was carrying out the Nord Stream 2 project with Russia for the establishment of energy security and thought that the transition to clean energy could be managed cost-effectively with this project despite the criticisms. It is worth noting that countries that have adopted fossil fuel-based growth models such as Poland and Hungary support Germany’s policy, while other countries support France’s nuclear model.
On the other hand, in the transition to clean energy, European leaders have been increasing their declarations for renewable energy for a while. For example, leaders such as European Commission President Ursula von der Leyen and British Prime Minister Boris Johnson have emphasized the importance of both clean energy and alternative fossil fuel sources. Of course, the priority of the EU, which is the leading country group in the fight against climate change, draws attention to investments in clean energy resources. On another note, the long-term and structural transformation of said investments necessitates the establishment of a healthy transition process so that this situation does not lead to energy supply security problems. As Europe weans itself off Russian resources, it is turning to large liquid natural gas (LNG) exporters such as the U.S. or Qatar for alternative overseas fossil fuel sources. However, experts agree that none of these sources alone are large enough to completely replace Russian sources.
Therefore, the EU has to establish a self-sufficient energy system if it wants to free itself from the Russian energy supply. Taking a step in this context, France revealed that it would build six new nuclear power plants, making the announcement with the slogan of full energy independence. Apart from France, the U.K. has also announced that it will build new generation nuclear reactors.
In Germany, opposition parties stated that the country’s only way to cope with the crisis is to start coal production. Similarly, various news sources have reported that Italy is considering temporarily reactivating its coal power plants.
The issue of reducing the EU’s dependence on Russian resources has also become a topic of debate on the international scale. The International Energy Agency (IEA) has also announced ways to reduce the EU’s dependence on Russian natural gas with 10 articles on this subject. These articles recommend not signing new contracts with Russia in the context of natural gas supply, replacing the natural gas supplied from Russian sources with gas from alternative sources and to fulfill the minimum gas storage obligations to strengthen the market structure.
The IEA’s recommendations for the energy sector include accelerating the tenders of new wind and solar projects, maximizing production from existing low-emission sources such as bioenergy and nuclear, and taking short-term measures to protect electricity consumers from high energy costs. On the other hand, it is recommended that the sectors that are the end-users of natural gas replace gas boilers with heat pumps, accelerate energy efficiency improvements in buildings and industry, and introduce regulations for heating adjustments in buildings using natural gas. The diversification of resources and the acceleration of decarbonization studies are provided as policy proposals that concern all segments to make power systems flexible.
The European Commission, which currently aims to reduce the imports of natural gas from Russian sources by two-thirds, continues its preparations to create a plan to gradually terminate its relationship with this source by 2027. In this context, the commission is expected to bring forth a plan called “RePower EU” in May.
On the subject, Frans Timmermans, European Commission vice-president in charge of the European Green Deal, said in a recent statement that the EU may set more ambitious targets for the transition to renewable energy while seeking alternatives to oil and natural gas imports from Russia. He also underlined that in this direction, they are focusing on the work related to the plan in question and therefore wish to accelerate the transition to clean energy. Another prominent point in Timmermans’ statement was that he believes Egypt, which will host the next U.N. climate conference, can help find new LNG resources in the Mediterranean and increase the EU’s resource diversity. In this respect, it will be important to closely follow the EU’s climate policies in terms of interpreting the economic and political developments in the region.
Fossil fuel reduction?
At the U.N. Climate Change Conference, also known as COP26, held in Glasgow in 2021, the countries agreed on the gradual reduction of coal investments. It was expected that all countries would make an environmentalist transformation in their coal policies as soon as possible as a result of this session, which was historic since coal was referenced for the first time in a final resolution text in the history of climate negotiations.
However, at this point we see many countries have turned to fossil fuels, acting contrary to the promises stated in this article. According to the developments reflected in the press, Saudi Aramco, the world’s largest oil company, has decided to increase its investments from $40 billion to $50 billion per year with the encouragement of the West.
As another example of the global impact of the war in Ukraine, U.S. President Joe Biden started negotiations with Venezuelan President Nicolas Maduro, whom he described as a dictator until recently. Biden’s move is directly linked to the fact that Venezuela provides 4% of the world’s crude oil and the aim is to overcome the lack of supply that will arise with the exclusion of Russia in the international energy market.
While calling for urgent action on climate change, there is an increase in demand for fossil fuel resources, including coal, which was expected to be gradually phased out, not only in the EU but also all over the world. Russian fossil fuel resources are of critical importance for the EU not only due to the sheer volume but also the logistical convenience. Considering that the sector requires heavy shipment traffic that spans days and weeks, Russian resources stood out as advantageous for the EU. At this point, the statements made by the representatives of the sector have revealed that a certain standard cannot be achieved in terms of quality and that the fossil fuel resources of more distant countries are required. As such, the Indonesian coal industry representatives announced in their statements that there are potential customers from Germany, Italy, Spain and Poland to prominent companies in the mining sector in Indonesia, which is the world’s largest transporter. Similar developments are taking place in South Africa and Australia, which are other leading countries in terms of fossil fuel resources.
While all these developments are taking place, the other side of the coin will be Russia’s search for new markets. As a matter of fact, in conditions where relations with the Western world have stopped due to the embargo, Russia will develop its commercial relations with countries that do not take a stand against it, especially China, to compensate for the lost income, and fossil fuel trade will gain speed especially in this region. According to a recent statement by the Russian Ministry of Energy, Russia’s coal exports to China are planned to be increased to 100 million tons. This will undoubtedly adversely impact the climate efforts of China, which has an important place in the fight against climate change and which is expected by the whole world to reduce its emissions.
Priorities change, so does climate
Despite all the negative indications, it is also possible to think that EU-Russian relations may lead to a more aggressive policy toward renewable energy. However, innovation activities that cannot accompany such a policy at the same pace will prevent these developments from being as beneficial as expected. With the expectation that renewable energy and battery technologies will gain momentum in the upcoming period, a significant increase in demand has been observed in input prices for these technologies.
For example, the price of lithium, which is extremely critical for both electric vehicles and battery technologies, has increased twelvefold in the last two years. This is concerning as it puts enormous pressure on the transition to clean energy. For this reason, to realize a green transformation in economies, we need to plan extremely well, take energy security into consideration and advance this process by protecting households.
In this context, Turkey carries out its plans in line with President Recep Tayyip Erdoğan’s vision of net-zero emissions for 2053 and the green development revolution, which is extremely ambitious and comprehensive and takes into account the sensitivities of the Turkish people. Turkey, which has been resolutely implementing policies to diversify its energy resources, include domestic resources in its energy mix and encourage the transition to green energy for years, showed the whole world how well it has done so far. As a matter of fact, with the recent Russia-Ukraine crisis, the EU learned that climate policies should not be handled alone since the issue is multidimensional in terms of geopolitical, diplomatic and economic dynamics and requires a plan as such. Therefore the EU had to take a step back in its climate change policies. This situation not only damaged the credibility of the EU in climate policies but also negatively affected the global fight against climate change.
Turkey will continue to implement its cautious and result-oriented policies one by one, while working with all its strength to leave a better world to the next generations without making concessions in the fight against climate change. In this direction, the country will set an example for all countries.
The Russia-Ukraine crisis, which is easily seen to have very critical consequences for all countries, will have negative consequences, especially in the fight against climate change. World leaders must realize that there will be no winners in this war and that the victim of the climate crisis will be our planet, and therefore, the next generations.
