Feature

European Parliament elections: a shift in priorities for the power sector

Smruthi Nadig explains what the EU’s power sector can expect from the European Parliament’s shift to the right following the recent elections.

The European Parliament in Brussels, Belgium. Credit: Alexandros Michailidis / Shutterstock

This year’s European Parliament elections, held on 6–9 June, resulted in a noticeable shift to the right.

According to provisional results, far-right political parties achieved their strongest-ever results in this year’s elections, collectively securing nearly a quarter of the chamber’s seats. The newly formed far-right group Patriots for Europe (Pfe) won 84 seats, becoming the third-largest party in the European Parliament. The European Conservatives and Reformists Group (ECR) obtained 78 seats, up nine from 2019.

Notably, far-right groups made significant gains in member states with significant influence over the EU’s energy landscape and agenda, including France, Germany and Italy.

“Although a [relatively] disparate group, their [far-right parties’] increased presence will apply added pressure to EU policymaking,” says Francesca Gregory, senior energy transition analyst at Power Technology’s parent company GlobalData.

The centre-right European People’s Party secured a clear majority, tilting further towards a right-wing shift in power. Based on preliminary data, the EPP has 188 seats, representing almost 25% of the 720 seats.

The other side of the spectrum, contrarily, experienced a heavy blow this term with the exception of the Left, which secured 46 seats, up from 37 in 2019. The centre-left Socialists and Democrats saw no significant change in their numbers, losing two seats from the previous term, while Renew Europe suffered a significant loss to 77 seats, down from 98 last term.

The Greens (European Free Alliance) – the most climate-conscious group in the Parliament – suffered greatly, obtaining only 53 seats this year, down from 70 seats. Formerly the fourth-biggest party in Parliament, the Greens now rank sixth behind both the ECR and Pfe.

The Green’s most substantial losses came from the delegations representing France and Germany, which had accounted for half of the Green movement’s strength in Parliament.

With the centrist, liberal and environmentalist parties experiencing notable declines and the centre and far right seeing considerable advances, the EU’s policymaking approach is bound to change this term. The new government may have significant implications for the future of the bloc’s power industry, with potential shifts in priorities to come.

The end of an era

The election results suggest a significant shift of Parliament to the right, potentially marking the end of a relatively stable period of environmental policy.

“The elections are likely to lead to a slowdown in green initiatives in Brussels, so any new climate policies are likely to come from the member states,” says Matthew Oxenford, senior analyst at the Economist Intelligence Unit. He says that rather than completely revoking such policies, “far-right groups have mainly concentrated on impeding or preventing the implementation of new climate policy laws”.

However, he claims that the slowdown had already begun years ahead.

In the 2019 European Parliament election, there was a noticeable increase in support for parties prioritising climate and environmental protection, leading to what was deemed the “green wave”.

Oxenford says this push for green policy was already paired with the pull against it. Despite the support seen in the previous election, he clarifies, there has also been “a decline in support for green parties across the bloc since 2019, with centre-left governments supported by the greens being pushed out of government in Sweden, Finland and Denmark.”

This year, the shift in priorities has become overt. While it is unlikely that any MEP will speak against the climate or environment, most parties are now more focused on economic growth and viability when it comes to energy.

A change in priorities: from climate to competitiveness

A right-leaning government will lead to a more conservative approach to EU policies, particularly in the area of climate change, both Gregory and Oxenford say. While this does not indicate a complete halt to the bloc’s green agenda, it signals a change in priorities.

Recently, the EU has been navigating a complex interplay of environmental, economic and geopolitical factors that shape the bloc’s energy policy. In addition to the global economic crisis following the Covid-19 pandemic, subsequent geopolitical events, namely the Russian invasion of Ukraine, resulted in further volatility in energy prices across the continent.

This intricate landscape has prompted discussions about a potential shift in priorities for EU energy policies. While many parties – at least, theoretically – pushed energy policies with environmental, social and governance at the forefront of their motivations in the 2019 elections, this term most emphasised economic viability and prosperity, potentially at the expense of addressing pressing environmental challenges.

A right-leaning government will lead to a more conservative approach to EU policies, particularly in the area of climate change.

According to Gregory, environmental concerns such as phasing out fossil fuels have played a smaller role in the parties’ promises this election. Instead, most parties highlighted as their priorities obtaining energy security by decreasing reliance on imports as well as increasing the EU’s competitiveness in the global energy arena through strategic foreign policies.

The EU’s climate diplomacy has already taken on a more protectionist tone in recent years, with policies like the Carbon Border Adjustment Mechanism and the ban on palm oil. Oxenford describes this as “protectionism disguised as environmentalism”, which he claims will remain the case, or even be increased, through the adoption of similar policies following this year’s elections.

“Now, the EU is even more likely to justify [protectionist energy policies] based on energy security and competitiveness concerns, respectively, rather than climate considerations,” he says. “It will likely continue to adopt these [protectionist energy] policies in an attempt to leverage its large single market, compete on higher-quality, high-tech production in the green transition and avoid being undercut by industry abroad with cheaper energy costs.”