Professor, Director
Pan-European Institute, Turku School of Economics, University of Turku
Finland
kari.liuhto@utu.fi
Oil and natural gas accounts for more than a half of the EU’s primary energy consumption. Since the EU’s own energy production covers only a fraction of the energy consumption, the EU member states are forced to import a significant portion of the energy consumed in the EU. In fact, 60 percent of all the energy consumed in the European Union was imported from outside the Union in the beginning of the 2020s.
Russia used to be the EU’s main external supplier of oil and natural gas before Russia’s 2022 invasion of Ukraine. Should we include all energy forms, i.e., oil, natural gas, uranium, coal and other solid fuels, Russian energy met roughly one-fifth of the total energy demand in the EU. To put it differently, nearly 100 million EU citizens were completely dependent on Russian energy before Russia’s invasion of Ukraine began on 24 February 2022.
Due to the 2022 escalation of the war in Ukraine, the EU banned maritime shipments of crude oil and petroleum products from Russia to the EU on the eve of 2023. Here, it needs to be stressed that the EU has not banned the imports of natural gas, and therefore the EU still received some 10 percent of its pipe gas imports from Russia in the first quarter of 2023. Furthermore, one should not forget that Russia is still the second largest supplier of liquefied natural gas (LNG) to the EU, representing one-fifth of the EU’s LNG imports in February 2023. For more on the LNG in the Baltic Sea region (BSR), see the book "The Future of Energy Consumption, Security and Natural Gas: LNG in the Baltic Sea region".
The littoral states of the Baltic Sea used to be highly dependent on Russian energy supplies. Finland and the former socialist states of the region, namely Estonia, Latvia, Lithuania and Poland, were the most dependent on Russian energy as the table below indicates. However, the dependence on Russian gas has decreased in the aforementioned countries due to the fact that Lithuania constructed its LNG terminal in Klaipėda in 2014 and Poland in Świnoujście in 2015. By January 2023, Germany has received three floating LNG terminals (Brunsbüttel, Lubmin and Wilhelmshaven) since the beginning of the Russian invasion a year earlier. Moreover, Finland began operating its floating LNG terminal in Inkoo at the beginning of this year. In addition to these LNG terminals, new gas pipes have been constructed between the western BSR countries, such as the Baltic Pipe connecting Norway and Poland (in operation since November 2022), the GIPL pipe connecting Lithuania and Poland (in operation since May 2022), and the Baltic connector linking Estonia and Finland (in operation since December 2019). These infrastructure projects have improved the energy supply security of the region.
Generally speaking, the energy import dependence on Russia has decreased in the Baltic Sea region since Russia launched the war in Ukraine in 2014. However, German gas imports from Russia were an exception. Germany increased its natural gas imports from Russia. In 2013, Germany imported 40 billion cubic meters (bcm) of gas from Russia, while the respective amount was 55 bcm in 2021. The increase led to the situation where Germany’s gas import dependence on Russia jumped from approximately some 40 percent in 2013 to 66 percent in 2021. The main reason for such an increase is not Germany’s complete geopolitical blindness but the end of the export of Dutch gas supplies to Germany in 2016. LNG forms a fraction of the German gas imports. What Germany does is important for the whole EU, since Germany consumes nearly one-quarter of all gas used in the EU and Germany is able to meet just five percent of its annual gas demand with its own production.
To sum up, Russia’s 2022 invasion of Ukraine finally woke up the BSR countries and surprisingly quickly, they have been able to decouple from Russian energy. The decoupling from Russia means higher energy prices, but on the other hand, it means more predictability and more security. Even if the BSR has heard the war bells, some BSR countries may still have difficulties to secure their energy supplies in the next heating season, and thus we should be alert and engage in more discussion of the possible problems in advance.
Russia’s share in the foreign trade of the littoral states of the Baltic Sea
|
|
2013 |
2020 |
2013 |
2020 |
|
|
Imports |
Imports |
Exports |
Exports |
|
Denmark |
1.27% |
1.13% |
1.74% |
0.80% |
|
Estonia |
9.28% |
9.03% |
17.91% |
8.35% |
|
Finland |
17.95% |
9.78% |
9.43% |
5.21% |
|
Germany |
3.34% |
1.52% |
3.36% |
1.95% |
|
Latvia |
8.37% |
6.14% |
11.64% |
8.51% |
|
Lithuania |
28.10% |
8.80% |
19.84% |
13.36% |
|
Norway |
1.72% |
1.79% |
0.94% |
0.40% |
|
Poland |
12.29% |
4.52% |
5.30% |
2.99% |
|
Sweden |
4.58% |
0.99% |
2.11% |
1.25% |
|
|
2013 |
2021 |
2013 |
2021 |
|
|
Oil & petroleum product imports |
Oil & petroleum product imports |
Gas imports |
Gas imports |
|
Denmark |
14.2% |
17.1% |
0.0% |
0.0% |
|
Estonia |
16.3% |
39.0% |
100.0% |
66.8% |
|
Finland |
71.0% |
64.2% |
100.0% |
96.9% |
|
Germany |
27.8% |
29.3% |
40.9% |
66.4% |
|
Latvia |
14.2% |
23.5% |
100.0% |
100.0% |
|
Lithuania |
85.6% |
76.0% |
100.0% |
36.7% |
|
Norway |
9.5% |
11.5% |
0.0% |
79.9%* |
|
Poland |
84.5% |
60.2% |
77.1% |
56.5% |
|
Sweden |
31.4% |
10.6% |
0.0% |
2.6% |
*Norway imported natural gas from Russia in 2021, but
its gas imports were symbolic (0.1 bcm in 2021). The aforementioned conclusion
applies to Sweden as well (0.03 bcm in 2021).
Sources: World Bank; Eurostat.
Energy security will be discussed in one of the three panels of the National Baltic Sea Forum of Finland. The forum will be organised for the 15th time in Turku on 15 June 2023. This year the forum will focus on security and safety in the Baltic Sea region. You may follow the event online. The programme and registration information can be found via the following link: Link to the 15th National Baltic Sea Forum of Finland