Support for far-right parties is surging ahead of June's European Parliament elections. This could mean Europe's Green Deal comes under threat.
ADVERTISEMENTThe European Union (EU) is at a crossroads amid the upcoming 2024 European elections as the unaffordable cost of living becomes a key challenge for incumbent leaders.
Russia's war in Ukraine has propelled the green energy transition forward. It followed the European Parliament's approval of the Green Deal two years ago, which targets climate neutrality in the EU by 2050.
However, the implementation of the deal has exacerbated the surge in energy prices, with both oil and gas reaching record highs in 2022, sparking controversy amidst the sharply rising cost of living across Europe.
With far-right parties promising to curb energy price rises and the cost of living, the Green Deal could be under threat as Europeans head to the poll later this year.
What is the European Green Deal?
The European Green Deal is a plan by the European Commission to make the EU's economy climate-neutral by 2050.
It includes goals such as reducing greenhouse gas emissions, transitioning to renewable energy, promoting a circular economy, protecting biodiversity, improving sustainable transportation, and ensuring a fair transition for affected communities.
It aims to address climate change and environmental issues while fostering economic growth and social equity within the EU.
What is the far right's stance on the Green Deal?
There are two prominent far-right groups in the European Parliament represented by Marine Le Pen, a French presidential candidate and populist, and Italian Prime Minister Georgia Meloni.
Among the common areas where far-right members oppose the Green Deal are concerns regarding its economic impact on industries heavily reliant on fossil fuels, potentially resulting in job losses and economic hardship.
Some nationalists have argued that the Green Deal reduced the EU's energy supply independence. The recent pan-European farmers' protest has raised concerns that green emission restrictions will escalate agricultural costs, a narrative also exploited by far-right members.
What is the energy sector’s landscape now?
Energy prices have significantly decreased since their peak in 2022. However, lower inventories of diesel, heating oil, and gas oil could lead to a rebound in energy prices in 2024. That is because manufacturing activities might pick up again if central banks decide to reduce interest rates in the latter half of the year, potentially increasing demand.
Despite the implementation of the Green Deal, the EU continues to rely heavily on imported fossil fuels. According to Eurostat, the EU's dependency on energy imports rose from 55.5% in 2021 to 62.5% in 2022.
Meanwhile, Russia's imports saw a significant decline, from 24.8% of petroleum oil and 48% of pipeline gas in 2021 to 3.9% and 16% respectively by the third quarter of 2023.
Concurrently, windfall taxes incentivised European energy companies to reduce their production, further exacerbating the EU's dependence on imports.
The potential impact on energy prices amid a far-right surge
The European Union's centre-right is acutely aware of the swift surge in support for the far-right, particularly in the aftermath of the farmers' protests across the continent in February.
Ursula von der Leyen, the leader of the European Commission, has opted to retract a proposal aimed at halving the use of chemical pesticides by 2030, a decision that has tempered the EU's ambitious Green Deal.
The increasing indications of compromise on climate change commitments could result in a less stringent approach to fossil fuels, thereby improving the balance between supply and demand in the region. Oil and gas prices have sharply declined since October 2023 due to oversupply and concerns about recession.
A surge in far-right influence in the European Parliament may further serve to moderate energy prices. Nevertheless, this development may only postpone the energy transition in the European Union and cannot reverse the progress already made.
