For decades, Europe carried a structural exposure that went largely unquestioned. Before the crisis, Russian gas covered roughly 45–50% of EU gas imports. By October 2025, this share had fallen to about 11%, following an accelerated diversification triggered by Russia’s weaponisation of energy after the invasion of Ukraine. The transformation extended beyond gas, reshaping Europe’s energy import structure across fuels. Russian hard coal imports have been fully phased out, compared to a 52% share of EU hard coal imports in 2021, according to sources in Brussels. Imports of Russian refined petroleum products have likewise been almost entirely replaced — primarily by supplies from the Middle East — falling to under 1% of total EU imports, from more than 42% in 2021, the same sources indicate.
How LNG changes the risk equation
The shift was systemic, not incremental. Russian gas volumes were replaced mainly through LNG, accounting for around 70–80% of the substitution, complemented by additional pipeline supplies from other sources. At the same time, EU gas demand declined structurally, from about 408 bcm in 2021 to roughly 330–335 bcm in recent years, reinforcing the impact of diversification by lowering overall exposure.
Many were quick to argue that a new dependency might simply be taking shape. Yet Russian pipeline gas proved uniquely dangerous because it combined physical rigidity with political leverage: once flows were cut, there were no alternative routes for the same molecules. LNG dependence operates differently. As a global and liquid market, LNG allows cargoes to be redirected, resold or swapped, much like oil. This does not eliminate competition or price volatility, but it makes deliberate supply blackmail far harder. Volumes are reshuffled across markets rather than removed from the system altogether, fundamentally reducing geopolitical risk.
The macroeconomic burden of fossil fuel imports
Beyond security of supply, the economic rationale is explicit. Fossil fuel imports impose a heavy and recurring macroeconomic cost. In recent years, the EU’s energy import bill has ranged between roughly 200 billion and 600 billion euros annually, equivalent to around 2–4% of EU GDP. These resources are permanently transferred abroad – sometimes paying for direct aggressions of export countries –, they are exposed to global price volatility and geopolitical shocks, and they feed directly into inflation. In 2022, energy alone contributed up to four percentage points to euro area inflation, forcing tighter monetary policy and indirectly constraining growth and investment.
The most painful phase of the transition has already passed. Replacing Russian gas during the crisis was costly because it was reactive, rushed and executed in fear-driven markets. Looking ahead, fundamentals are more favorable. Global LNG supply is set to expand significantly, with an additional 200–250 bcm of liquefaction capacity expected by 2030. The EU already has substantial spare regasification capacity, estimated at 130–150 bcm per year. Meanwhile, EU gas demand is projected to fall by a further 40–50 bcm by 2027 as renewables, efficiency and electrification advance. Together, these trends point to a looser market balance and downward pressure on prices, even if LNG implies a higher price floor than the pre-crisis, pipeline-based system.
By 2040, EU net energy imports are projected to fall by more than half compared to today, with import dependency declining from around 50% to roughly 26%, and further to about 15% by 2050. Renewables are expected to supply around 75% of final energy consumption by 2040, while fossil fuels retreat mainly to non-energy uses and residual demand. This trajectory reduces not only exposure to external suppliers, but also the structural drag on EU competitiveness created by volatile fossil fuel imports.
From the cost of transition to the cost of non-transition
The real issue is not only the cost of decarbonization, but the opportunity cost of maintaining the status quo. The EU’s fossil fuel import bill — 2–4% of GDP year after year — represents a persistent leakage of economic value. The counterfactual is deliberately stark: what would Europe’s growth look like if even part of these resources were retained and invested domestically, in infrastructure, clean energy, industry, innovation or skills? In an economy where potential growth hovers around 1–2%, this leakage is decisive.
Continued dependence on fossil fuel imports constrains growth, amplifies inflationary shocks and forces restrictive monetary responses, with second-round effects on investment and competitiveness. The 2022 crisis merely exposed, in extreme form, a weakness that had accumulated over time. Even before the crisis, EU electricity and gas prices were higher than those of its main competitors, but the gap widened sharply after 2022. Now, EU industrial electricity prices are roughly twice those in China and more than double those in the US, while gas prices for industry remain three to five times higher than in the US. This disparity directly affects energy-intensive sectors — steel, chemicals, metals, cement — which are not only exposed to international competition but are also essential inputs for clean-tech value chains.
Electricity and renewables represent the EU industry’s most credible pathway to both security of supply and long-term cost competitiveness. Unlike fossil fuels, whose prices are set on global markets and exposed to geopolitical shocks, renewables rely on domestic resources with near-zero marginal costs once installed. As renewable capacity expands and electrification advances, the cost of energy becomes increasingly driven by capital expenditure rather than volatile fuel inputs. This creates the conditions for more stable and predictable prices over time, provided that grids, storage and flexibility are developed in parallel. Electrification anchored in renewables allows European industry to decouple competitiveness from fossil fuel imports, reducing both strategic vulnerability and structural cost disadvantages vis-à-vis global competitors
Seen through this lens, phasing out Russian gas is not merely an exceptional or geopolitical decision, but an acceleration of an economically rational correction. LNG is not risk-free, but it is far less weaponisable, and much of the financial cost of diversification has already been absorbed. The medium-term outlook therefore points to lower import dependency and more stable fundamentals. The same logic applies to renewable electricity: while capital-intensive at the outset, it is designed to remain — delivering lower, more predictable prices over time.
