Analysis: how the Ukrainian war impacts climate change and the transition to renewable energies

Image: an employee turns a valve on a pipeline at the Bulgartransgaz gas compressor station in Ihtiman, Bulgaria, after the halt of Russian gas supply to the country. Credit: Nikolay Doychinov / AFP.

The Ukrainian war has brought urgency to the long-lasting issue of the European Union's dependency on Russian fossil fuels. The crisis has sparked a debate as to whether the conflict will speed up or slow down the transition from fossil fuels to renewable or carbon-neutral energies. 

 The answer to this question might not be straightforward. Broadly speaking, there are three main views on the matter: those who see the crisis as an opportunity to speed up the transition to renewables; those who favour replacing Russian fossil fuels with alternative supplies of non-renewable energies; and those who believe in a hybrid path. 

“The leaders I speak to say everything has changed. What many economies around the world are looking at now is accelerating completely replacing Russian fossil fuels,” says Andrew Forrest, chairman of Fortescue Future Industries.

A full transition to renewable energy, however, would not only be expensive but also time-consuming. Researchers from German insurer Allianz SE estimate that it would require an increase of Europe’s annual spending on renewable energy by €170 billion for at least the next six years. Nonetheless, the report points out that this option would still be the cheapest path toward energy independence for Europe.

But since time is of the essence, some believe that Europe could wean itself from Russian fossil fuels more rapidly by importing liquefied gas from other nations such as Algeria, Qatar and the US. 

This solution, although seemingly practical at first, might pose an economic challenge to EU leaders. Importing more expensive oil and gas from other countries might cause commodity prices to rise -- not an ideal solution for those countries already struggling with inflation and a decrease in purchasing power since the beginning of the Covid pandemic. 

"The ready alternative to renewable generation right now is gas, and gas prices are up 100 per cent as well. So you pick your poison," says Reagan Farr, CEO of Silicon Ranch, an American solar-energy developer. 

This option also raises concerns about greenhouse-gas emissions, since the extraction and transportation of liquefied gas lead to methane leakage, one of the biggest contributors to climate change. 

Despite these challenges, the EU has committed to reducing ⅔ of its fossil fuel imports from Russia by the end of the year. Although it is not clear yet if all European countries will be able to find a replacement soon enough. Prior to the war, the EU imported 40% of its natural gas, ¼ of its oil and half of its coal from Russia. Some countries like Germany, Poland and Bulgaria rely on proportions higher than others. 

The urgency to replace Russian supplies might also cause some countries to compromise their climate targets. Until February, Germany had plans to reach 100% renewable energy consumption by 2035. However, as the war started, the country’s Chancellor Olaf Scholz announced projects to build two new import terminals for liquefied gas and a potential delay on plans to shut down national coal plants by 2030. 

To address this dichotomy, some suggest that a hybrid path is the only reasonable option out of the crisis. A more pragmatic approach that would attempt to balance energy security with climate targets. 

“We need a portfolio of options to replace Russian gas and safeguard energy security in the short term,” says Simone Tagliapietra, an economist at Bruegel, a European think tank. “That portfolio includes ramping up natural-gas imports to Europe, as well as increasing the use of coal-fired power plants to ensure that the lights stay on and houses remain warm next winter,” he says. “And then we need to really double down on the clean energy transition.” 

But even if the Ukrainian war eventually speeds up the transition to renewable energies in Europe, it does not mean that the rest of the world will follow suit. The growing levels of uncertainty created by the pandemic and the war might encourage other countries to prioritise energy security over climate targets.