Comparison of the production and consumption of energy in the European Union

The European Union has been linked to the energy sector from the beginning. However, it is worth noting that this area is still a shared competence in the integration. The European Union has many challenges in the field of energy policy, such as increasing import dependence, limited diversification, increased energy demand, climate change, the lack of renewable energy sources, and shortcomings in the integration of energy markets. Among these, energy dependence is largely determined by the evolution of energy consumption. Therefore, it is important to examine the relationship between energy production and consumption between 2010 and 2020 in the European Union.

Introduction

The topic of the article is the quantity of the energy produced and consumed in the states of the European Union between 2010 and 2019/2020 (the official data calculates with 27 states, UK excluded). In my opinion, this topic and this information is essential to form an unbiased opinion on the energy use and its regulatory issues, in the light of the events of the last couple of months, since the start of the Russian-Ukrainian war.

This essay would be too lengthy if I examined all sources of energy one by one, so its scope will be limited to petroleum and gas, and, in contrast with these two, renewable energy. The data below is from the official pocketbooks of the EU (EU energy in figures, from 2012 and 2021).[[1]]

Production of energy

First of all, we should look at energy production, as it’s a convenient starting point from which we can move on to examine some other areas of the energy market. Counting all fuels, the quantity of the energy produced in the EU in the years 2010 and 2019 was:

Figure 1: Quantity of production

Source: Own editing[2]

The types of fuels produced in the EU include nuclear, solid fossil fuels, renewable and biofuels, gas, petroleum/oil products, wastes (non-renewable), and peat and oil shale/sands. As we can see, the production dropped 89.6 mtoe in 9 years, which is a 12.84% drop in percentages. For comparison, this amount is more than Hungary’s (26.71), Romania’s (33.11) and Slovakia’s (17.02) yearly usage in 2019, combined.

In terms of fossil energy carriers, the European Union is most dependent on Russia, the reason for which can be traced back to its eastern expansions. After all, these countries are exposed to the uncertainties of gas supply from the East. Due to this increase in dependence on Russia, the European Union has already faced the need to develop a new energy policy in 2005.

The 2006 Russian-Ukrainian gas dispute further increased mistrust against Russia and made the Union realize that supply disruptions represent a real risk. In order to solve this problem, the Green Book on “European strategy for the sustainability and competitiveness of energy supply and security” was published in 2006.[[3]] It is true that the member states were only partially affected by the energy crisis caused by the Russian-Ukrainian conflict, however, it was pointed out that guaranteeing energy security may exceed the competencies of national frameworks. Subsequently, a number of regulatory proposals were made for the coordinated management of supply security and tackling supply problems, aimed at strengthening community competencies.[[4]] However, the Ukrainian-Russian war that broke out in 2022 proved that these measures were insufficient.

Let’s take a look at the production, separating the fuels:

Figure 2: Production by separating the fuels

Source: Own editing

As we can see, oil and gas production dropped significantly, and the production of renewable energy is on the rise (Nuclear power is not included here, but the numbers show a small decrease in production between 2010 to 2019). Energy produced in the EU made up 7% of the world’s energy production in 2010, however this number went down to 4.1% in 2019 (The largest producer is the Asian region, without including Russia).

As can be seen, the production of fossil energy decreased, while that of renewable energy sources increased. This is thanks to the support mechanisms of the European Union. However, as we will see below, despite the fact that the production of renewable energy sources is beneficial for environmental protection, it increases the EU's import dependency, which makes the community vulnerable (as shown by rising energy prices and uncertainty due to the Ukrainian-Russian conflict).

Consumption of Energy

We’ve taken a look at production in the EU; now let’s examine consumption with the same method, comparing the data from 2010 and 2019.

Figure 3: Quantity of Consumption

Source: Own editing

As we can see above, there was a decrease of 105.43 mtoe in consumption, which is a 6.76% drop in percentages. As I have mentioned above, the reduction of the production was 12.84% in percentages, nearly double that of the reduction of consumption. Now, if we subtract the consumption from the production (2019), the amount of energy which had to be imported is 846.02 mtoe.

However, the official sources of information declare that in 2019, the EU imported 909.1 mtoe of energy (All of the countries import more than they actually consume in a year, loading the storages). Consumption, separating the fuels:

Figure 4: Consumption by separating the fuels

Source: Own editing

In 2010, oil accounted for 35.1% of all fuels, meanwhile the share of gas was 25.1%, so altogether, they made up 60,2% of the total. In 2019 however, the share of oil was 34,5% and the share of gas was 23,1%, so altogether, they amounted to 57,6%, which is 2,6% lower than before.

However, it’s worth to mention that although there is a decrease in the use of oil and gas, these two types of fuels are still by far the two biggest sources of energy, since the third biggest source of energy is the category of renewable and biofuels with a 15.8% share in consumption.

Although renewable energy is only the third biggest source of energy in terms of consumption,  national targets are set for member states in order to increase the production of renewable energy: „for the  share  of  renewable  energy in  gross  final  energy  consumption,  of  the  data available  on  the  EUROSTAT  website  corresponding  to  2017,  the  following  countries have  reached  and  exceeded  the  2020  target  (in  alphabetic  order):  Bulgaria,  Czechia, Denmark, Estonia, Croatia, Italy, Lithuania, Hungary, Romania, Finland, Sweden”.[[5]]

Last but not least, as mentioned before, the EU produced only 4.1% of all energy produced in the world in 2019; nonetheless, its member states used 10.2% of all energy produced in that year, even though the population of these states (circa 446.5M [[6]] people combined) only made up about 5.7% of the population of Earth.

Summary

Above, I compared the numerical data of energy production and consumption. The European Union is in a difficult position when it comes to regulating the energy sector, as the area is shared with the member states. The analysis shows that energy consumption has increase between 2010 and 2020 in the EU. Meanwhile, the integration seeks to reduce the use of fossil energy and increase the share of renewable energy sources in order to achieve environmental protection goals. The data also show this, since while the production of the former has decreased, that of the latter has increased over the past 10 years. However, as the Russian-Ukrainian war of 2022 showed, the energy dependence of the integration is high due to the energy dependence of Eastern European countries on Russia, and the increase of renewable energy sources cannot currently increase the energy independence of the EU. This is also why we feel the negative effects of the Russian-Ukrainian war, e.g.: an increase in energy prices.

My intention with this article is to provide some independent (of politics), unbiased information on the situation of energy produced and used in the European Union. If you are interested in this topic, note that there is plenty of research in this field: Marrero and Ramos Real (2013) assessed trends in energy intensity, i.e., the relationship between final energy consumption and GDP, focusing on industry, construction, services and agriculture. In their study they assessed the drivers of changes in energy intensity in the EU15 from 1991 to 2005 pointing to structural changes and energy efficiency as key drivers. Focusing on a much shorter period (2001-2008), Fernández González et al. (2014) studied the factors behind the change in aggregate energy consumption in the EU27[[7]].  Although the topic at hand is extremely complicated, with thousands of data points, I hope this article could provide some valuable insight.

Author: Pella Sebestyén Márk, law student, University of Debrecen, Faculty of Law

The study was made under the scope of the EFOP-3.6.1.-16-2016-00022 "Debrecen Venture Catapult Program".