Following the majority of the nationalist right-wing parties in the European Parliament Elections, radical or partial changes are expected in energy policies. In 2022, the unpreparedness of the “green” trend in energy as a result of geopolitical changes directly affecting Europe increased the inflation environment and created a partial depression with energy costs.
The biggest campaigns of the nationalist right-wing parties across Europe are mostly based on rational policies in the economy. Among these rational policies, it can be interpreted that the irrational policies of the centre-left and green movements against fossil fuels will be removed. In energy supply-security, the intermittent energy production of fossil fuels in base power plants and their gradual reduction with energy storage technologies will be the key to the global green transformation in the first place.
Given the current distribution of seats, it will be difficult to pass new green laws.[1] Energy policies will no longer be centred on combating climate change, but on security and industrialisation. The unrequited support of the Russian-Ukrainian war by European states is causing discomfort, especially among right-wing groups. Global neoliberal decisions will be suspended in Europe for 5 years, signalling a move towards more national-centred policies.
Especially in the second half of the last period, many climate policies have suffered a series of setbacks as a result of populist conservatives within the European People’s Party (EPP) collaborating with the far-right opposition to withdraw or even kill progressive climate laws. In Germany and the Netherlands, climate laws have caused farmers to take to the streets and governments to back down. Cost of living concerns have turned many citizens against policies that polls show they favour.[2] The reasons why farmers and industrialists in particular have turned their backs on the centre-left parties are the watered-down climate policies and high tax rates.
The renewable energy sector had a challenging year in 2023 due to significant inflation and rising interest rates. Unlike fossil fuel companies that benefited from the war-induced oil price increase, green energy-oriented companies faced challenges. These companies often rely on high capital expenditure and are vulnerable to high interest rates and inflation. Many renewable energy companies depend on government subsidies through renewable auctions. However, these auctions resulted in unsuccessful allocation of projects in 2023 due to low ceiling prices.
Far-right parties have stated that a green transition would reduce Europe’s competitiveness with large economies such as the United States (US) and China. The policy implications of the election could mean less investment in the renewable energy sector, which needs continued government support and funding allocations. According to a report by the European Central Bank: “The European Commission estimates that additional annual investment between 2023 and 2030 would amount to 620 billion euro.” This amounts to approximately 3.7 per cent of the EU’s GDP in 2023. On the other hand, reducing green regulations could benefit fossil fuel producers such as TotalEnergies by lowering green transition costs and reducing mandatory energy efficiency standards.[3]
While far-right parties gained significant power in the European Parliament Elections, some sectors, such as renewable energy companies, will be significantly affected by a possible policy change. Many of the national right-wing parties see the green energy transition as an overreaching goal of the EU. Climate regulations increase inflation and worsen the cost of living. National right-wing parties argue that current green policies impose significant financial burdens on citizens and industries, raise inflation and increase the cost of doing business. Dissatisfaction among businesses and households has increased the populist appeal of right-wing parties, leading to a significant increase in public support.
The increasing presence of far-right parties in the European Parliament will slow down the implementation of the Green Deal by interfering in policy-making processes. In particular, the fact that green energy remains cumbersome against the rising Chinese industry undermines the mechanisms of the industry in Europe to compete with China. As a result, Europe will spend its national interest-oriented energy on the continent in the coming days and expects radical changes in its energy policies. Among these, the lifting of the energy embargo imposed on Russia will most probably be possible.
[1] “EU climate policies could be slowed in future after rightward shift in election.”, Reuters, https://www.reuters.com/world/europe/uphill-road-europes-climate-plan-after-eu-election-2024-06-10/, (Access Date: 10.06.2024).
[2] “European Parliament elections: climate policies will suffer”, Energy Transition The Global Energiewende, https://energytransition.org/2024/06/european-parliament-elections-climate-policies-will-suffer/, (Access Date: 11.06.2024).
[3] “EU Elections: Will far-right surge pressure renewable energy stocks?”, Euronews, https://www.euronews.com/business/2024/06/12/eu-elections-will-far-right-surge-pressure-renewable-energy-stocks, (Access Date: 12.06.2024).
