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The Collapse of Oil Prices: Economic and Political Implications

Author(s): Bartosz Bieliszczuk / Language(s): English

Together with the COVID-19 pandemic and the economic slowdown caused by the restrictions to slow the spread of the coronavirus, the demand for oil has fallen, followed by prices. These drops were further fuelled by the collapse of the OPEC+ summit, which was to limit output and increase prices, and the rivalry between Saudi Arabia and Russia for market share. As a result, oil prices have fallen to record lows, which together with oversupply and the expected global recession, will pose a serious challenge for the biggest producers and countries dependent on oil export revenue.

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Russia’s nuclear project in Hungary: France’s growing role

Author(s): Andrzej Sadecki,Ilona Gizińska / Language(s): English

Despite the Russian invasion of Ukraine, the Hungarian government has declared it is fully determined to build the Paks II Nuclear Power Plant, the main contractor of which is Russia’s Rosatom. Several important decisions have been taken over recent weeks to remove the barriers to implementing the project. For example, Hungary and Russia have renegotiated the contracts that were signed nearly a decade ago and were initially accepted by the European Commission. When the German government refused to approve Siemens’ participation in the consortium supplying components to the power plant, France’s Framatome began playing a greater role in the project. According to the current plan, the construction of Paks II is set to start this year, and the first of the two units are to be completed in 2032. However, the project is still facing a great deal of technical, financial and political challenges that may hinder or even prevent it from being completed. To this end, Budapest is seeking the support of France; it hopes above all that Paris will keep resisting the proposals to impose EU sanctions on the Russian nuclear sector.

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U.S. Re-Focuses Arctic Policy - The Consequences for Its Allies

Author(s): Paweł Markiewicz / Language(s): English

The Biden administration is increasing the U.S. capabilities in countering the effects of climate change in the Arctic, an aim overlapping the rivalry with Russia and China in this region. The U.S. announced increasing investments in infrastructure projects and defence, for example, modernising the Coast Guard’s Arctic fleet. The planned measures provide an opportunity for closer American cooperation with their allies and may mark the beginning of a regional division of labour in the area of shared defence.

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European Electricity Market Reform Faces Dilemmas

Author(s): Marianna Skoczek-Wojciechowska / Language(s): English

The electricity market reform proposed by the European Commission (EC) on 14 March is part of a structural response to the energy crisis. It continues the trend of further integration of the European energy market and seeks to provide stable conditions for the development of RES. The legislative proposals is currently being negotiated by the European Parliament (EP) and the Council of the EU. Reconciling the interests of Member States, the electricity sector, investors and consumers remain a challenge. There is little chance that the postulates regarding the extension of the capacity mechanisms, which are important from Poland’s perspective, will be taken into account.

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Small Island Developing States: A Strong Interest Group on Climate

Author(s): Zuzanna Nowak / Language(s): English

Small Island Developing States (SIDS) are an important and formalised group of interests in international climate negotiations. Although they contribute very little to climate change, they are the most vulnerable to its effects. That is why they urge developed countries to take responsibility for this global problem and to increase financial aid to its victims. Although SIDS face opposition to their position, their consistent lobbying may lead to a modification of perceptions of climate change.

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The Energy Crisis in France

Author(s): Łukasz Maślanka / Language(s): English

The global energy crisis has highlighted the weakness in the French energy sector. The nuclear branch, which was supposed to ensure the state’s independence, is struggling with technological problems, the state-owned EDF group is heavily indebted, and production from renewables remains below expectations. The initial government reaction has been aimed at preventing an uncontrolled increase in fuel and energy prices. Now, doubts have been raised about the French president’s ambitious plan for the structural recovery of the energy sector, presented on 10 February, over its financial and technical feasibility.

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Russia’s Use of Gas Blackmail Against the EU

Author(s): Maciej Zaniewicz / Language(s): English

Russia has cut gas supplies to the EU to force concessions on the status of Donbas and the security architecture in Europe, leading to a deeper energy crisis in the EU. If these supplies are stopped, which is unlikely, LNG imports probably would be insufficient to meet the demand. With Germany halting certification of the Nord Stream 2 (NS2) gas pipeline, Russia is likely to keep supply level slow, risking a more serious energy crisis in winter 2022/23 due to difficulties in building up sufficient gas stocks over the summer.

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The Road to Low-Carbon Economies in the EU’s Arab Neighbourhood

Author(s): Sara Nowacka / Language(s): English

At the end of last year, Mediterranean Arab states (i.e., Egypt and Algeria) announced investments or tenders related to the production of renewable energy sources (RES). This is related to the pressure to move away from fossil fuels and the favourable conditions in these countries to produce solar energy. Although in the short-term the EU cooperation with its Arab neighbours on RES might slow due to the war in Ukraine, in the longer perspective, given their capacities in this regard, it remains crucial in order for the EU to become independent on Russian energy.

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New Perspectives for Nuclear Energy in the EU

Author(s): Zuzanna Nowak,Maciej Zaniewicz / Language(s): English

EU countries opposing nuclear energy, mainly Austria and Germany, are trying to limit its development in the Union by using the dispute over the details of the “green taxonomy”. The Russian aggression against Ukraine, however, has strengthened the arguments of supporters of this technology. They present nuclear energy as a way to make Europe independent of Russian gas and oil imports while reducing CO2 emissions. The final shape of the delegated act supplementing the taxonomy and the date of its entry into force will significantly affect the future of new nuclear projects in the EU, including in Poland.

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Prospects for the Diversification of Natural Gas and Oil Supply Sources to Hungary

Author(s): Veronika Jóźwiak,Maciej Zaniewicz / Language(s): English

The Hungarian government opposes the imposition of EU sanctions on the import of energy resources - especially gas - from Russia. The authorities explain this decision with Hungary’s high level of dependence on these resources and lack of alternative sources that are not more expensive. In fact, this stance is a consequence of Hungary’s long-standing policy towards Russia of closer political relations and energy cooperation since 2010, and the related lack of investment in the diversification of energy sources. Even if there is political will, which the authorities have not shown so far, it will be difficult for Hungary to free itself from Russian gas in the short term. The possibilities of giving up Russian oil are higher, but Hungary is unlikely to support an embargo on it this year.

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Biogases: An Element of EU Energy Security

Author(s): Zuzanna Nowak,Maciej Zaniewicz / Language(s): English

The development of European biogas is one way to make the EU independent of Russian gas supplies. It also would make a significant contribution to the implementation of the ideas underpinning the European Green Deal, including the energy transition and circular economy. The current limitations on the growth of this sector, such as financing issues, have become less important in the face of the consequences of the war in Ukraine. From Poland’s perspective, it is important to maximise the benefits for Polish businesses when developing the EU’s biogas potential.

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The EU’s Difficulties with Increasing Gas Imports from Arab States

Author(s): Sara Nowacka / Language(s): English

In mid-June, the EU signed an agreement with Egypt and Israel as part of an effort to increase gas imports from the Middle East and North Africa. However, among the obstacles to replacing Russian supplies with gas from this region are the limited infrastructure and the high demands of exporting countries. To increase the chances of success in this area, the EU may propose to combine gas purchase contracts with investments in the development of local renewable energy sources and new technologies.

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States Seek Treaty on Plastic Pollution

Author(s): Szymon Zaręba / Language(s): English

With negotiations likely to start later this year, a treaty supported by the United Nations Environment Programme (UNEP) is expected to make it possible to tackle the problem of plastic waste pollution, a transnational problem requiring international cooperation. The challenge will not be its adoption as much as its implementation, as it requires legislative action and investment by countries and business. However, it will benefit especially the environment, biodiversity, and human health. It is in Poland’s interest to negotiate flexible solutions and identify directions for national action.

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IPCEI Gaining Momentum in the Development of European Industry

Author(s): Marta Makowska / Language(s): English

To sustain the dynamic development of new technologies and the accelerating transformation of the EU economy, the mechanism of important projects of common European interest, IPCEI, is gaining importance. Created as a special form of public aid to strengthen European industry, IPCEI can contribute to the implementation of breakthrough solutions, including in the production and storage of hydrogen as energy or the development of battery technology, and to strengthen the global competitiveness of the Union. Its potential for disturbing competition in the internal market, though, remains a challenge.

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Surviving the Winter: France’s Preparations for a New Energy Crisis

Author(s): Łukasz Maślanka / Language(s): English

Faced with the threat of a cut-off of gas supplies from Russia and the temporary shutdown of a large number of reactors, the French government has begun to encourage citizens and businesses to reduce their gas and electricity consumption. The most effective savings incentive would be a partial price release, but the resulting social discontent and recession could destabilise the political situation in the country, including undermining French support for Ukraine. The authorities are therefore promising to further limit price increases, while seeking alternative sources of electricity and gas supply.

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Sub-Saharan Africa May Be a New Source of Gas for the EU

Author(s): Jędrzej Czerep / Language(s): English

In order to become independent from supplies of energy resources from Russia, EU countries are intensively looking for alternative gas import opportunities, including from Sub-Saharan Africa. This direction may become an important element of European diversification, but its development requires external investments and improvement and expansion of the existing infrastructure. European companies and the EU itself can play a key role in this regard.

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Great ambitions: Russia expands on the LNG market

Author(s): Szymon Kardaś / Language(s): English

Expansion on the liquefied natural gas market has become one of the priority areas in Russia’s energy policy in recent years. This has been reflected in the statements made by government representatives and the many strategic documents that have been adopted recently. In particular, on 16 March this year the government approved a document entitled The Long-term Programme for the Development of Liquefied Natural Gas Production in the Russian Federation which envisages ambitious plans for further development in this area: an output of 80 to 140million tonnes of LNG in 2035. The assumptions of the strategy fit in with the trend of regular increases in the production and export of Russian LNG which have been visible in recent years (from 11 to nearly 30 million tonnes in 2016–19). It can be concluded from these announcements that Russia is planning to increase its share in the global liquefied natural gas market to over 10%, and possibly even up to 20–30%. The expansion in this sector is also an argument for Moscow to strengthen its political and military presence in the Arctic. Increasing the Russian share on the European LNG market may also be a kind of remedy for Gazprom’s loss of influence in some EU countries.

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The environmental disaster in the Arctic. Moscow’s neo-colonial exploitation of Russia’s regions

Author(s): Iwona Wiśniewska,Jadwiga Rogoża / Language(s): English

The end of May 2020 saw the biggest known environmental disaster in the Russian Arctic. The thermal power plant in Norilsk in Krasnoyarsk Krai, controlled by the Norilsk Nickel company, contaminated soil and water with more than 21,000 tons of diesel fuel. A month later, the company dumped another portion of toxic substances directly onto the tundra. Although the company has been polluting the region for years, it has thus far remained unpunished. This case illustrates the costs of Russia’s status as a major raw commodity exporter and of Moscow’s policy of exploitation of remote regions, which resembles colonial practices. In these regions, natural resources are being mined in a manner close to over-exploitation, without the necessary protection measures, and the health of the local population is being put at serious risk. Moscow accumulates the income earned from selling the mined raw materials and at the same time it ignores the interests of local residents – all matters concerning the regions are decided in the capital, frequently behind the scenes, and the regional governments are informed of the decisions afterwards. The Kremlin allows mining companies to operate freely in the regions (including with regards to environmental issues) in exchange for contributions to the state budget and profits for members of the elite associated with President Putin.

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Russia’s hydrogen strategy: a work in progress

Author(s): Szymon Kardaś / Language(s): English

In recent years, numerous countries have adopted their national hydrogen strategies and begun to implement them. In July 2020, the European Union also adopted its strategic document in this field. Although the actions described in the document will impact the prospects of Russia exporting its fuels, Russia has only just begun to devise its position regarding this matter. To date, the first draft of the road map for the development of hydrogen energy in 2020–2024 has been compiled. Hydrogen energy is not among the priorities of Russia’s energy policy. This is confirmed both by the content of Russian strategic documents and by the limited actions of the Russian leadership and energy companies carried out to date. These actions are currently limited to research and development initiatives and pilot projects. International cooperation in the field of hydrogen energy involving Russian companies is also rather limited. Russia has major potential for hydrogen production. The main obstacle to the development of the domestic hydrogen energy sector is posed by the absence of significant genuine interest from the central authorities in challenges related to global climate change; this translates into very limited regulatory and funding activity.

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Nord Stream 2 and the Biden Presidency

Author(s): Bartosz Bieliszczuk / Language(s): English

The German government hopes that the Biden administration will weaken the sanctions against Nord Stream 2 (NS2). German diplomacy is pushing to win U.S. acceptance of NS2’s completion and launch. Biden is faced with a dilemma: while he is critical of the pipeline, he also seeks closer relations with American allies, including Germany. Some kind of concessions cannot be completely ruled out but they will be difficult, not least because of the bipartisan opposition to NS2 in Congress.

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