The political economy of breaking European dependence on Russian gas

Abstract

Russia's invasion of Ukraine has been a landmark moment for Russian gas in Europe. Having built ties for five decades, and having become the continent's main source of supply, Russia's exports of gas to Europe in 2024 were back to the levels witnessed in the mid-1970s. Now, Russia is downgraded to a marginal supplier. Europe has enacted rapid and comprehensive policies breaking with the past. And yet the question of the future of Russian gas looms on the horizon of European energy and climate policies. The present paper proposes a political economy heuristic based on sunk costs, incumbency, and policy ideology to explain Europe's past reliance on Russian gas and its varied responses to its displacement since the Ukraine war. By extension, the heuristic allows judging whether Russian gas may see a return to Europe, should Moscow's war end and a window of opportunity open up for revisiting external supply options. We empirically test this heuristic by assessing why Europe's dependence on Russian gas increased, and the extent to which the policy pathway of select European countries falls in line with assumptions derived from behavioralist approaches, material interests and ideational factors. Here, the paper provides an assessment, based on the heuristic, of the three divergent responses that have emerged since the start of the war in Ukraine: maintain Russian gas imports, replace Russian gas with other sources of gas, and replace Russian gas with renewable energy. In doing so, the paper provides a proof of concept for judging the future of Russian gas in the European import balance and thus fills an important gap in the pertinent academic literature by examining key political economy factors that shape EU-Russian energy relations going forward.