May Insights: What do Europe's Elections Mean for the Upstream Sector?
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The upcoming European elections in June 2024 could significantly impact the oil and gas industry, particularly through the interplay of environmental policies and the political leanings of the elected members. In our recent article, 'From Polls to Policies: Assessing the 2024 European Elections Impact on the Oil and Gas Sector' (read here), we look at how the election could impact the policy directions and regulatory frameworks that shape the future of the energy sector.
The focus in 2019, driven by environmental movements like Fridays for Future and Extinction Rebellion, had shifted political agendas across the spectrum towards combating climate change. This election cycle, however, finds Europe at a crossroads, with the future direction of its energy policies hanging in the balance.
Pre-election polls by POLITICO, as of May 13, 2024, suggest that the European People's Party (EPP) and the Progressive Alliance of Socialists and Democrats (S&D) will continue to wield significant influence. Yet, there is a rise in populist sentiment, likely boosting the ranks of the Identity and Democracy (ID) group and other right-leaning parties such as the European Conservatives and Reformists (ECR). This shift could signal a conservative pivot away from aggressive climate policies like the EU’s Green Deal, which has been instrumental in fostering sustainable energy practices within the bloc.
The EU’s ambition to become the first climate-neutral continent by 2050 under its Green Deal has been recalibrated in response to external shocks, notably Russia's invasion of Ukraine. This has prompted the REPowerEU Plan, focusing on reducing dependency on Russian fossil fuels, boosting renewable energy, and enhancing efficiency measures. The forthcoming elections will be critical in determining the scale of the EU’s climate ambitions and the resulting implications for the E&P sector. Companies equipped with renewable and carbon capture technologies could find new opportunities, especially as the UK and Norway promote sustainable hydrocarbon sourcing from democratic, low-intensity states, supported by advanced CCS capabilities.
Read the full article here.
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