Energy plays a key role in decarbonization, competitiveness, and security. The success or failure of the EU’s energy policy in phasing out fossil fuels and reducing problematic dependencies will define the future of Europe’s energy landscape.
The World Energy Council Finland and the Future Energy Leaders Finland programme recently invited me to speak at their morning seminar in Helsinki about the future of European energy policy. They specifically asked me to prepare different scenarios, which I appreciated, as I believe we use scenario thinking far too little in today’s policymaking.
Being a lazy person, I usually take the easy route to produce scenarios: the Axes of Uncertainty method, introduced by Shell in the 1970s. It goes like this: identify two major uncertainties affecting the future. Plot these uncertainties in a two-by-two matrix and voilà, you have four scenarios.
So, what are the main uncertainties that the EU’s energy policy currently faces? One could consider competing political philosophies. Will regulation be technologically neutral and market-based, or will it rely more on detailed technical norms? Will it be driven by short-term economic competitiveness, or guided by science-based climatic and ecological boundaries? Another source of uncertainty is whether the EU can act as a unified power or remain a collection of bickering nations with fragmented policies. External shocks to the global order, such as U.S. trade policies, are also relevant.
However, this time, I decided to base my approach on outcomes. Will the EU be able to fully decarbonize its economy? Will the union succeed in significantly improving its energy independence?
With this approach, I set up two axes. The Gray-Green axis describes two types of energy futures. Gray refers to a partially decarbonized energy economy, where gas still plays a significant role in electricity production or heating, the transport sector remains heavily reliant on oil and gas, and biomass is used beyond sustainable limits. Green represents a decarbonized energy economy that runs almost entirely without fossil fuels and operates within sustainable boundaries, especially in land use.
The Sovereign-Dependent axis describes the level of energy independence. Dependent implies critical reliance on fuels, raw materials, industrial capacity, or technological expertise from outside the EU. Sovereign means the EU is largely self-sufficient or in a balanced power relationship regarding these factors.
The resulting scenarios are visualized in Figure 1. Starting from the upper left in a counterclockwise direction, we have “Dead End,” “Leash of Gas,” “Made in China,” and “Green Lantern.”
Dead End
The gray-sovereign scenario is called Dead End because it represents, quite literally, a dead end. The EU does not possess the fossil resources needed to substitute its current, or even a significant portion of its current, fossil energy imports. One could imagine a dystopian future where fracking in Central Europe, extended peat and coal extraction, and intensified biomass use are deployed to meet energy needs. But this would devastate both the economy and the natural environment, and would require staggering levels of political recklessness. Fortunately, this scenario is not very plausible.
Leash of Gas
The gray-dependent scenario, Leash of Gas, is also problematic—unfortunately, it’s more plausible. Here, the EU may have ambitious climate goals on paper, but policies fall short of achieving deep decarbonization. Increased renewable energy production is backed by natural gas; many European homes continue to use gas heating, and agriculture still depends on fertilizers made from natural gas.
The union fails to phase out Russian gas, or continued demand is met through imports from places like Norway, Middle East or the United States. The transport sector electrifies too slowly, and synthetic e-fuels do not scale up quickly enough to eliminate oil dependency. As a result, Europe remains critically dependent on external fuel supplies—often from nations whose values and interests clash with its own. This weakens the EU’s geopolitical leverage, and its economic competitiveness remains vulnerable to decisions made elsewhere.
Made in China
In the Made in China scenario, the EU manages to implement policies that lead to deep decarbonization. Electrification rises substantially, and remaining energy needs are met with clean hydrogen and its derivatives. Energy production is based mostly on wind, solar, and nuclear, supported by sustainable levels of hydropower and limited biomass use.
However, the EU fails to enhance its techno-economic competitiveness. Imported electric vehicles, batteries, and solar panels dominate the market. Currently, China leads in many of these areas, including wind turbines and nuclear energy. Other industrial powers—such as the United States and South Korea—are also strong contenders in the global green transition, and European innovation and industrial output lag behind.
Decarbonization requires raw materials. In this scenario, China maintains dominance over rare earth metals, and also other raw materials for batteries, fuel cells, power engineering, and nuclear fuel continue to be largely imported. Additionally, solar-rich regions such as North Africa and the Middle East could become key hubs for hydrogen production and refining, creating new dependencies.
Though outsourcing technology and raw material production may be cost-effective, it limits European geopolitical power, introduces vulnerabilities, and risks exporting environmental harm beyond EU borders.
Green Lantern
Finally, in the Green Lantern scenario, the EU succeeds in both phasing out fossil fuels and improving energy independence and security. Green Lantern—a comic book hero known for moral integrity and strength—is an apt metaphor for the EU as a global leader in the green transition: a decarbonized, innovative power. The European economy runs on clean energy, and its innovation system delivers sustainable solutions globally. Technological and economic competencies translate into geopolitical influence, enabling the EU to promote emission reductions in third countries, including in international aviation and maritime sectors.
Fun fact: the original Green Lantern was a railroad engineer—quite fitting, indeed.
Where Are We Headed Now?
These scenarios are, of course, simplified. While deep decarbonization is essential, total energy independence is not necessarily a wise objective. The European Union should facilitate global collaboration and trade. However, overreliance on others in a strategic sector like energy is a vulnerability—and it undermines Europe’s ability to lead global change.
Currently, we are still on a leash of gas, and unfortunately heading toward a future Made in China. Neither emissions reduction nor strategic autonomy and competitiveness are advancing quickly enough. The EU needs a strategy that lays a clear path toward a fully decarbonized economy while strengthening innovation and industrial capacity.
Achieving this is nearly impossible without a more integrated union and better-functioning single markets. Regulation must be science-based, efficient, and effective. Currently, many of these criteria are not met. Regulation should guide action, but success also demands massive investments in people and infrastructure. Public funds should be used wisely to leverage significantly larger private investments.
Lastly, success has a physical basis. To become a stronger global green leader, Europe will need vast quantities of raw materials and clean energy. As both inevitably involve environmental costs, energy efficiency and the shift to a circular economy are essential pillars of a viable strategy.
(This text is based on the presentation I gave on June 5th at the “Where is EU Energy Policy Heading?” event, hosted by World Energy Council Finland and Future Energy Leaders Finland. Many thanks to Federica Prandin, Riku Huttunen, Toivo Haimi, and all participants for the valuable discussion following the presentations!)