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The decision made by Ukraine’s authorities on the suspension of Russia’s natural gas transit over the country and the consequential stop of supplies to the European Union represents a profound crisis that has far-reaching economic, social, and environmental consequences on the continent. The situation is not as dire as it could have been before 2022: after the invasion of Ukraine, the EU member states already made strong efforts to diversify their energy sources and cut their dependency from Moscow. At the same time, this process has underscored the EU’s vulnerabilities and raised questions about its energy infrastructure, diplomatic strategy, and long-term sustainability in the face of global energy challenges. The answer that Brussels and the national governments found has been stronger than expected but has also faced material obstacles, together with a heavy economic burden. Especially in 2022-2023, the EU has faced an unprecedented rise in energy prices, leading to inflation and increased cost of living for millions of Europeans. In particular, gas prices spiked dramatically in the immediate aftermath of the supply disruptions, affecting almost everything, from household heating costs to industrial production, with critical consequences that are still significant even for richer countries. This is dramatically true for Germany, where industries reliant on natural gas, particularly energy-intensive sectors like chemicals and fertilisers, have been hit hard. In the last months, data for the German economy have shown a severe decline in many items, with businesses in the country that have been forced to scale back operations or shut down temporarily due to skyrocketing energy costs, exacerbating the economic strain on the EU. Germany is considered the “economic engine” in the European continent, and its struggles almost automatically convert into the struggles of all the other EU member states, without substantial exclusions.

With the beginning of 2025, European gas prices rose by 4.3% to almost 51 euros on the first trading day after Ukraine stopped transiting Russia’s natural gas to Central European countries. As “Bloomberg” reported, the rise in gas prices to 51 euros per megawatt-hour is the highest since October 2023, and while the halt in supply will be remedied by tapping stored reserves this winter, a higher demand is expected for natural gas to refill inventories over the course of 2025. In this context, European citizens and industries will suffer another potential blow in the next months, with direct consequences for their savings and business plans, respectively. Moreover, even if in the long term the suspension of Russian gas supplies could accelerate the EU’s push toward renewable energy, such a shift may come with significant environmental trade-offs. In fact, while the energy crisis has made the development and use of renewables more urgent, it has also led some EU countries to temporarily reverse their commitment to green energy, taking also into account the financial difficulties recently encountered by most of the member states. Some nations have restarted coal-fired power plants or extended the life of existing nuclear reactors to bridge the gap, even if their strategic plans were pointing towards green policies. These decisions, while necessary in the short term to ensure energy security, could have future environmental consequences, including increased carbon emissions.

Written by: Francesco Marino