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Geopolitics
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10.1080/14650045.2023.2283489
2283489
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Research Article
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The EU Energy Transition in a Geopoliticizing World
A. HERRANZ-SURRALLES
GEOPOLITICS
Herranz-Surralles Anna
Political Science Department, Faculty of Arts and Social Sciences, Maastricht University , Maastricht, Netherlands
CONTACT Anna Herranz-Surralles Anna.Herranz@maastrichtuniversity.nl Political Science Department, Faculty of Arts and Social Sciences, Maastricht University , Grote Gracht 90-92, Maastricht 6211 SZ, Netherlands
2 1 2024
2024
2 1 2024
29 5 18821912
Integra21 8 2024
Integra21 8 2024
© 2024 The Author(s). Published with license by Taylor & Francis Group, LLC.
2024
The Author(s)
https://creativecommons.org/licenses/by-nc-nd/4.0/ This is an Open Access article distributed under the terms of the Creative Commons Attribution-NonCommercial-NoDerivatives License (http://creativecommons.org/licenses/by-nc-nd/4.0/), which permits non-commercial re-use, distribution, and reproduction in any medium, provided the original work is properly cited, and is not altered, transformed, or built upon in any way. The terms on which this article has been published allow the posting of the Accepted Manuscript in a repository by the author(s) or with their consent.

ABSTRACT

Amidst heightened global power rivalries, the geopolitical aspects of the energy transition are taking centre stage, with even liberal-minded countries growing wary about foreign investment in the energy sector and the dependencies created by global value chains of green technologies. Building on current debates on the ‘geopoliticization’ of foreign economic policies, this paper sets out a conceptual framework to assess the extent to which the energy transition is becoming geopoliticized in the European Union (EU) and its impact on international energy relations. Theoretically, the paper makes the case for considering geopoliticization as a missing link in the study of politicization and securitization in International Relations, allowing for a more fine-grained diagnosis of current trends and their likely evolution. Empirically, the analysis identifies structural geopoliticizing dynamics in the EU’s framing of the energy transition, although to different degrees depending on the concrete issue at hand. While demands for factoring in the geopolitical consequences of the energy transition are ever louder, normatively, the paper raises a note of caution against the adverse consequences geopoliticization may have for the global transition to low-carbon energy systems.

Dutch Research Council (NWO) The work was supported by the Dutch Research Council (NWO) .
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pmcIntroduction

Since 2020, about 100 countries have joined the global trend towards pledging climate neutrality by the mid-century, bringing the total number of net-zero pledges to 150 countries, about 90% of the world’s population (Net Zero Tracker 2023). While the COVID-19 health crisis temporarily overlaid the climate crisis, many countries around the world placed the green energy transition at the centre of their post-pandemic recovery plans. Such global convergence around the goal of carbon neutrality and green recovery raised expectations of finally unlocking some of the massive investments needed to stay in the net-zero trajectory – a four-fold growth in clean energy investment by 2030 (IEA 2021, 22). At the same time, particularly since the Covid-19 , the energy transition also brought to the fore intense rivalries and geostrategic concerns about foreign energy investment and the dependencies created by global value chains of green technologies (cf. Goldthau and Hughes 2020). The discussion on strategic dependencies turned up a notch with Russia’s invasion of Ukraine in February 2022, spurring unprecedented action in Western countries aimed at terminating hydrocarbon imports from Russia.

The mounting attention to the geopolitical aspects of the energy transition seems to follow the wider ‘geopoliticization’ trends observed in external economic policy, meaning that trade and investment issues have become more embedded in international power rivalries (Meunier and Nicolaidis 2019, 107). The prospect of post-carbon energy relations is indeed closely tied to trade and investment, with the growing importance of the supply chains of green technologies, global standards for renewable energy sources (e.g., green hydrogen), or carbon adjustment mechanisms. Therefore, external energy policy seems increasingly difficult to isolate from the emerging ‘geoeconomic order’ characterised by ‘heightened concern over the security risks posed by economic interdependence and digital connectivity, strong competition over technological development, and increased invocations of security exceptions’ (Roberts, Moraes, and Ferguson 2019, 657).

This paper investigates these dynamics with a double analytical purpose. Theoretically, it engages with the notion of ‘geopoliticization’, to better determine its meaning and analytical purchase. The paper makes the case for considering geopoliticization as a missing link in the study of politicization and securitization in International Relations. It conceptualises geopoliticization as a policy frame, implying both a discursive component (How an issue is problematised? Which cause-effect relations and normative evaluations are implied?) and a practice component (the institutional structures and policy instruments designed to tackle the problematised issue, and their actual implementation). This allows distinguishing and diagnosing the extent to which an issue is geopoliticized, as opposed to politicied or securitied, as well as understanding the mechanisms behind these processes.

Empirically, this study examines whether the energy transition is indeed being geopoliticized and with what consequences for global energy interactions, delving into the European Union (EU) as a case study. The emerging literature on the geopolitics of the energy transition is divided in assessing whether a post-carbon future might bring about more international cooperation or conflict (for recent reviews, Blondeel et al. 2021; Hafner and Tagliapietra 2020; Vakulchuk, Overland, and Scholten 2020). While there are abundant studies devising future scenarios of the energy transition (cf. Goldthau and Westphal 2019), including the projected geopolitical consequences of the war on Ukraine (Giuli and Oberthür 2023; Kuzemko et al. 2022; Osička and Černoch 2022) detailed examinations of how the energy transition is actually approached in different jurisdictions are less common. This is an important limitation since the pace and character of the global decarbonization process will not only depend on material or technical factors but on how policy-relevant actors and the general public discursively construct the energy transition in first place (cf. Blondeel et al. 2021, 3).

The EU represents an interesting case for such an investigation since it has traditionally been an actor pursuing liberal energy policies and depoliticized energy relations, whereas, at the same time, having to deal with an unpropitious context of high external energy dependency and mounting tension in the relations with its main supplier of natural gas (Goldthau and Sitter 2015; Herranz-Surrallés 2016; Prontera 2019; Siddi 2019). Therefore, as the energy transition progresses, the EU might face even stronger tensions to square its liberal and universalist aspirations to defend multilateralism and ambitious climate policy, with wider economic interests and protectionist trends identified as features of the new geoeconomic order.

The remainder of the paper has four sections. Section 2 places the notion of geopoliticization into the wider context of constructivist International Relations literature and justifies the added value of the concept. Section 3 operationalises geopoliticization for the study of the energy transition. The framework is then applied to examine the recent changes in the problematization, decision making, and policy instruments of EU external energy policy. Sections 4 and 5 examine the problematization and policy practices observed in two central empirical domains in the transition to low-carbon energy systems: (i) foreign investment in energy infrastructure and technology and (ii) renewable energy development and production. The two cases serve as an illustration of slightly different dynamics in the geopoliticization trends. The final section concludes by recapping the main contributions of the paper and devising some paths for further research.

Geopoliticization as a Missing Link in International Relations

The term ‘geopoliticization’ is a recent coinage. Though, until the start of the 2010s, this neologism had hardly ever been used, its popularity has been rising exponentially in recent times, both in scholarly and non-scholarly contexts.1 This growing usage appears closely related to the evolution of international economic affairs since geopoliticization is often employed to characterise developments in trade, investment, and economic policies in general. The closer relation between geopolitics and economics can also be observed in the growing interest in ‘geoeconomics’, a term that has experienced an even more spectacular rise.2 Therefore, before moving to define geopoliticization and its relation to the concepts of (de)politicization and securitization, a discussion on the link between geopoliticization and geoeconomics is in order.

Geoeconomics commonly refers to ‘the intersection of economics and finance with global political and security considerations’ (Kaufman, 2004, cited in Cowen and Smith 2009, 38). As a field of study, it has a broad scope, encompassing the study of the geopolitical consequences of economic phenomena and vice-versa. The originator of the term, Edward Luttwak (1990), referred to geoeconomics to characterise the emerging post-cold war order, where he anticipated that both the predominant causes and the instruments of conflict would become economic in nature. Some concrete policy tools Luttwak mentioned to exemplify ‘the weapons of commerce’ were restrictions on imports, subsidization of exports, or the funding of competitive technology projects and infrastructures (Luttwak 1990, 21). In the same vein, the comeback of the term in recent years also conceives geoeconomics as a type of statecraft consisting on the ‘geostrategic use of economic power’ (Wigell and Vihma 2016, 606). Broader instruments, such as economic conditionality and trade sanctions, are also included within the geoeconomics umbrella whenever the goal behind them is gaining political influence or control over the flows of resources in other states (Vihma 2018, 4). In other words, geoeconomics points to a world in which the main rationale for economic transactions is not mutually-beneficial gain, but the geostrategic advantage they may bring (Wesley 2016, 6; Wigell and Vihma 2016, 606).

Relatedly, geopoliticization captures the ascendancy of geostrategic considerations into non-military spheres of activity. However, geopoliticization and geoeconomics differ in at least two important respects. First, geopoliticization is not limited to economic issues. Geopoliticization can occur in a wide array of issues from identity (Diez 2004), religion (Dijkink 2006), democracy, and human rights (Luciani 2020), energy (Casier 2015), or entire regional policies such as the European Neighbourhood Policy (Cadier 2019). Secondly, geopoliticization places the analytical focus on the discursive process by which certain issues come to be framed, and consequently dealt with, as geopolitical problems (cf. Cadier 2019). Therefore, while geoeconomics might be one important expression of geopoliticization, the latter encompasses broader phenomena, and highlights the agency and politics behind them.

Understood as a policy framing process, the concept of geopoliticization echoes the field of critical geopolitics, which aims to identify and de-naturalise geopolitical narratives (Tuathail and Agnew 1992). However, as emphasised by critical geopolitics scholars, the focus on the discursive construction of issues as geopolitical does not neglect that geopoliticization also has roots in material factors and leads to real-world interventions (Sparke 2018). The structural drivers of geopoliticization are the competitive dynamics resulting from power equalization and material-normative rivalry between major powers (Figure 1). Its practical consequences vary depending on the issue being geopoliticized. For example, in the economic sphere, the most directly observable consequences might certainly be the adoption of geoeconomic instruments. In the area of values and rights, geopoliticization may lead to externalising societal problems and concealing the commonalities across countries. For example, Luciani (2020) discusses how LGBT rights have become embedded into wider geopolitical rivalries in EU-Russia relations, reifying the idea of a normative divide between the two actors, and leading Eastern neighbours to adopt LGBT equality laws as a way of signalling distance from Russia, rather than improving LGBT rights on the ground. More generally, geopoliticization diminishes trust and reifies normative clashes between (blocs of) rivalling countries, reducing chances for collaboration and exchange (cf. Cadier 2019). Geopoliticization may, thus, be defined as the framing of a social phenomenon as a matter of international power competition, inciting the adoption of policies and instruments that aim at fostering an advantage over strategic competitors. Figure 1. Representation of the drivers and consequences of (de)politicization, geopoliticization, and securitization of international affairs.

Source: own elaboration

This definition of geopoliticization as a policy framing process allows opening an analytical dialogue with other central notions in Political Science and International Relations: politicization and securitization. Politicization captures the process by which certain issues ‘become the subject of deliberation, decision-making and human agency where previously they were not’ (Hay 2007, 81). While politicization is facilitated by institutional and ideational opportunity structures, framing is also crucial, since politicization is expressed in public debates, societal contestation and polarised opinions (cf. De Bièvre, Costa, and Garcia-Duran 2020; de Wilde, Leupold, and Schmidtke 2016). Therefore, politicization is also ‘at heart, a discursive process’ (Voltolini, Natorski, and Hay 2020, 614). Despite their common etymological root, geopoliticization and politicization are clearly distinct phenomena. In terms of drivers, studies of the politicization of international affairs have noted that an important precondition for the politicization of global policies and international institutions is their growing authority. In other words, the more international institutions gain monitoring, implementation, regulatory, or even decision-making powers, the more they are expected to become the object of public attention and demands (Zurn, Binder, and Ecker-Ehrhardt 2012, 71). The focus is thus on how external events and international institution activate domestic political and societal cleavages, which is not necessarily the case in geopoliticization (see below). As for the consequences, the expectation is that, if well managed, politicization can contribute to re-legitimise international institutions, allowing them to maintain or continue expanding their authority (Zurn 2018: 89ff). Alternatively, states might decide to seek re-legitimation by claiming back their policy space and downsizing the authority of international norms and institutions, thus contributing to their depoliticization (Herranz-Surrallés 2020, 338).

As represented in Figure 1, while separate processes, politicization and geopoliticization may co-occur and even reinforce each other when geopolitical rivalries are used to raise the stakes of domestic contestation. For example, in the area of economic policy, one could imagine heated domestic debates about the desirability of treating trade or investment issues from the prism of geopolitics. In this sense, already in the 1990s, Luttwak emphasised that the propensity to act geoeconomically depends on domestic politics, and noted how this was becoming an important topic of partisan divergence in the United States (Luttwak 1990). Meunier and Nicolaidis (2019) also argue that, next to the rise of China, populist narratives of ‘taking back control’ and ‘my country first’ in Western countries have also fuelled the geopoliticization of trade and investment. In non-economic issues, Kazharski and Makarychev (2021) also provide a good example of the politicization-geopoliticization nexus, by showing how autocratic regimes attempt to geopoliticize domestic protests, attributing them to foreign interference, fostering ‘anti-Western siege mentality’; a move that protesters have tried to defuse by explicitly avoiding geopolitical narratives, thus, striving to keep domestic contestation within the confines of politicization. Therefore, geopoliticization may still share some of the traits of politicization, typically characterised by the public salience of the issues at hand, the participation of a wide-range of domestic actors and polarised political positions (de Wilde, Leupold, and Schmidtke 2016). However, the more geopoliticization entrenches, and global power rivalries become the main structuring force in policy making, the less compatible it will be with politicization.

In that sense, when geopoliticization intensifies, it can evolve into securitization, classically defined as the process by which an issue ‘is presented as an existential threat, requiring emergency measures and justifying actions outside the normal bounds of political procedures’ (Buzan, Wæver, and de Wilde 1998, 23–24). In the economic realm, the boundaries between geopoliticization and securitization are often difficult to demarcate, as illustrated by the fact that the ‘securitization of economic policy’ is considered one of the main traits of a geoeconomic order (Roberts, Moraes, and Ferguson 2019). Still, following its original definition, securitization differs from geopoliticization in that the former refers to the invocation of urgent, existential threats, thus going beyond often more diffuse considerations of competition and strategic rivalry that characterise the latter. In other words, geopoliticization can still be seen as a process of balancing geostrategic considerations and other societal goals (e.g. economic development, decarbonization), while securitization implies that security becomes the overriding logic of policy decisions. The international consequences of securitization are thus more severe and confrontational, as these may lead to disregard core international norms and institutions, unilaterally terminate cooperation via sanctions or economic decoupling, or even outright military conflict. Therefore, unlike politicization, which is seen as part and parcel of the democratization of authoritative international institutions and deepening of economic integration and interdependencies, both geopoliticization and securitization of international (economic) policy herald the opposite dynamics: the unravelling of global international institutions, or their split into rivalling blocks, and de-globalization trends (Paul 2021).

Following securitization theory, securitization is less compatible with politicization, as securitizing an issue implies moving it beyond the realm of political debate and deliberation (Buzan, Wæver, and de Wilde 1998, 29). Although some contestation regarding security policies may always remain (cf. Wagner et al. 2018), successful securitization implies that a wider audience amongst political elites and society have largely accepted the securitizing moves and related exceptional measures. Securitization thus echoes the famous ‘rally-around-the-flag effect’ (Waltz 1967), namely, the tendency of political elites and society to close ranks in support of the government when faced with an external emergency; or the notion of ‘emergency politics’ in response to crises (White 2015), a mode of decision making that reinforces executive prerogatives to take urgent decisions, thus, marginalising parliament and public scrutiny. In that sense, as represented in Figure 1, securitization also has a counter-intuitive relation to de-politicization, as both processes imply taking issues from the realm of choice to the ‘realm of necessity’ (Hay 2007). Moreover, even exceptional security measures, despite their deeply political nature, might eventually become normalised and implemented through routinised, technocratic procedures (Balzacq 2011, 17). In essence, therefore, de-securitization means to either (re)politicize an issue, namely, to bring it to the realm of ‘normal politics’; or a de-escalation from the language of threat, back to a geopoliticized frame which can still be compatible with politicization.

Geopoliticization as a Framework for Analysis

Treating geopoliticization as a policy frame, next to (de)politicization and securitization, allows developing an empirical research strategy to identify the main logics (or combination of them) driving policies, better anticipate their evolution, and devise normative parameters to assess their desirability. In order to identify policy frames and associated practices, we can look at four dimensions: (i) the problematization of an issue, namely, what is named as a problem, how actors define the causes and effects of this problem, and what are their implicit/explicit normative evaluations; (ii) the institutional and policy-making structures, encompassing the main actors involved in decision making and coordination structures among units of government; (iii) the concrete policy instruments advanced, be they of political, economic or legal nature; and (iv) the expected international cooperation outcome or what type and intensity of interaction are logically connected to a particular frame.

Policy frames or paradigms are sector-dependent. Therefore, the above categories need to be operationalised here for the particular case of the energy transition. Table 1 summarises the main elements of depoliticizing, politicizing, geopoliticizing, and securitizing frames. These can be considered macro frames, in the sense that they refer to broad lenses through which the energy transition can be understood and debated in a given context. While all framings can co-occur, particularly if we are analysing a broad multinational actor such as the EU, the framework can be used to identify which of these frames is the most influential and able to sway policy-making dynamics.Table 1. Policy frames on the energy transition.

 	Depoliticizing frame	Politicizing frame	Geopoliticizing frame	Securitizing frame	
Problematization	Technical domain	Domain with domestic/global socio-economic implications	Domain with wider power-politics implications	Domain involving threats to (national) security	
Policy-making	Experts, independent agencies, private actors	Law-makers, sectoral bureaucracies, public	Foreign-policy community, strategic units in government	Top-level political elites, defense agencies	
Policy instruments	- Decentralized relations between public and private actors
- Trans-governmental contacts to exchange best practices
- Unilateral removal of barriers to trade/investment	- External promotion of policy goals and regulatory models through outreach events and public diplomacy
- Negotiation of international rules and standards to foster decarbonization
- Just transition mechanisms	- Industrial policy and reduction of strategic dependencies
- Protect the energy sector and clean tech industry from strategic competitors
- Use of energy to project own economy or forge political alliances	- Use of energy to inflict political/economic harm on other countries
- Prohibit access or nationalization of foreign energy assets on security grounds
- Protection against attacks on energy infrastructure and supply interruptions	
International cooperationoutcomes	Transnational and transgovernmental coordination	Institutionalized cooperation, international regimes	Strategic partnerships, inter-governmental agreements	Restrictive measures, security alliances	
Source: author’s elaboration.

The least likely frame to prevail, given the magnitude of the task of de-carbonising the global economy, is a depoliticizing frame, which would problematise the energy transition as a mostly technical issue. Still, the depoliticization of at least some aspects of the energy transition remains a possibility, in line with scenarios that the green transition could lead to a more decentralised and/or market-driven approach to energy, fostering a ‘new globalization wave’ (Goldthau and Westphal 2019); or relatedly, with studies emphasising the ‘peace dividend’ of decarbonization: less concentration of resources can translate into less external dependency, thereby diminishing chances of resource conflicts and limiting the possibility of energy being used as a political weapon (Hafner and Tagliapietra 2020). The prevalence of this frame would mean that technical and regulatory aspects would effectively gain weight over politically-loaded issues such as access to resources (Escribano, quoted in Vakulchuk, Overland, and Scholten 2020). New markets for renewable energy goods and technologies would spur further liberalization trends, fostering investments and trade across nations. The growing level of green electricity interconnections would also require enhanced coordination at the technical level through transgovernmental networks and grid managers and operators.

Conversely, a politicizing frame would foreground the distributional consequences of the energy transition, hence, the necessity of political choice and intervention to bridge divergent perspectives. Finding agreement on the timelines and instruments of decarbonization, and on how to deal with their socio-economic consequences (McCauley et al. 2019) would, therefore, be prominent topics of both domestic and international political agendas. Domestically, rising pro-climate mobilization can live together with a surge in protests against fuel price spikes and carbon taxes. Therefore, to successfully govern the energy transition and avoid a backlash in domestic support, this frame would favour involving a wide range of stakeholders in energy policy-making. This ties in with the rising demand for ‘energy democracy’, which is also seen as evidence of rising politicization, in the sense that ‘the choices involved in designing energy transition pathways can no longer be bracketed as non-political’ (Szulecki and Overland 2020, 1). Internationally, the politicization of the energy transition would imply that states and international institutions step up their outreach activities and public diplomacy to generate support for their preferred energy transition model in other jurisdictions. The main driving force for international cooperation would still be to foster the global energy transition and manage its wider socio-economic implications.

The prevalence of a geopoliticizing frame denotes a situation where the energy transition is seen through the lenses of international hierarchies and global-power rivalries (cf. Scholten, Criekemans, and Van de Graaf 2020). Any progress towards the energy transition has to be carefully assessed in terms of relative power positions rather than an absolute economic or environmental benefit. For example, many studies on the geopolitics of energy transition concur in identifying the race for technological leadership and control of strategic value chains as one of the main concerns in terms of new global power rivalry (Eyl-Mazzega and Mathieu 2020; Scholten et al. 2020). The effective geopoliticization of the energy transition would prompt the adoption of geoeconomic instruments. For example, following Roberts, Moraes, and Ferguson (2019), geoeconomic strategies by incumbent powers can consist of ‘shielding’ (e.g., selectively limiting foreign investment in critical sectors), ‘stifling’ (e.g., export controls to inhibit the innovation capacity of strategic competitors), and ‘spurring’ (e.g., industrial policy to give domestic companies competitive advantage). The geopolitical and geoeconomic consequences of the energy transition would, thus, force actors to reconsider their partnerships and alliances to avoid losing economic and political clout and minimise vulnerabilities (Pastukhova, Pepe, and Westphal 2020).

Moving up the ladder towards more conflictual dynamics, a securitizing frame of the energy transition would mean that security concerns come to dominate actors’ responses, leading them to devise exceptional measures to tackle these threats. This is in line with most pessimistic scenarios about the energy transition, which foresee the emergence of new conflicts prompted by petrostates’ aggressive behaviour, the weaponization of critical materials, or greater exposure to cyber-attacks on digitalised energy systems (Vakulchuk, Overland, and Scholten 2020). Responses to these threats could include sanctions or other unilateral measures to restrict the otherwise normal flow of goods and capital, or efforts to decouple from global value chains (Goldthau and Hughes 2020, 29). When actors pursue economic or political security above all else is where we are more likely to see an erosion of the multilateral energy governance, economic fragmentation, and technological-normative competition (Pastukhova, Pepe, and Westphal 2020, 8).

Based on this conceptual discussion on the different possible framings of the global energy transition, the next sections turn to examine the EU’s emerging approach and policy practice in the context of the European Green Deal and its external dimension. The analysis examines the EU energy transition policy frames and related policy practice in two prominent topics associated with the energy transition that have an important external dimension: (i) foreign direct investment in energy infrastructure and green technology and (ii) renewable energy development and production. Since both topics were largely depoliticized at the start of this millennium, comparing their evolution can reveal some commonalities and differences in the process of embracing more geopoliticized frames. The analysis focuses particularly on developments since 2010, to uncover the gradual changes occurred long before the global COVID-19 pandemic and Russia’s full-scale war on Ukraine. The study of the problematization is based on documentary analysis of primary sources, including a systematic review of European Commission communications, European parliamentary debates and member states’ positions when available. The study of policy practice draws on own-gathered data on EU inward foreign investment and EU assistance in the energy sector between 2010 and 2020, complemented by reports from international institutions, think-tank analyses and specialised media articles. The analysis conducted is interpretive, in the sense that it looked beyond the frequency of words or expressions belonging to the frames in Table 1, to also qualitatively assess the meaning and prevalence of certain ideas and priorities over others. Alignment or contradictions between problematization and policy practice were also considered as evidence for the extent to which policy frames are sedimented, in flux or overlapping.

Foreign Investment in Energy Infrastructure and Green Technology

The participation of non-EU companies in the internal energy market has never been a fully depoliticized matter. Yet, the first directives liberalising the EU electricity and gas markets in 1996/1998 and 2003 facilitated the entry of non-EU companies into the incipient EU internal energy market via the acquisition of transmission and distribution gas pipelines, gas storages, electricity generation, or trading companies. For example, Russia’s state-owned company Gazprom and its subsidiaries made more than 100 investment operations in the energy sector of EU Member States, half of them implying 100% acquisition of the target company.3 With the growing energy prices since the mid-2000s and the first serious gas crises in 2006 and 2009 resulting from political-commercial disputes between Russia and Ukraine, the sentiment shifted towards greater wariness of the possibility of non-EU companies using energy as a (geo)political lever. However, politicization was still the main dynamic, with polarised debates between, and often within, Member States, about the desirability of further energy ties with foreign (state-owned) energy companies. The highly politicized European and national debates about Nord Stream 1 and South Stream gas pipelines between the mid-2000s and mid-2010s are a case in point (Herranz-Surrallés 2017). In this context, the European Commission failed to gather Member States’ support for a strong third-country clause in the 2009 gas directive, which would have given the EU greater powers to enforce reciprocity and unbundling rules in foreign acquisitions (Eikeland 2011).

Throughout the 2010s, the pattern of foreign energy investment changed, with China taking the place as the first non-OECD investor and a growing number of transactions focusing on areas relevant to the energy transition, including the acquisition of electricity distribution networks, renewable energy production, and clean-energy technologies.4 The EU Member States initially displayed different levels of concern on this matter and many transactions happened out of public sight. For example, Chinese Stated Owned Enterprises (SOEs) such as State Grid Corporation of China (SGCC), China Investment Corporation (CIC), or Three Gorges Dam Corporation (CTG) could successfully acquire stakes in the electricity transmission networks of Portugal (25% of REN in 2012 and 49% in EDP in 2017), Italy (35% of CDP Reti in 2014), Greece (24% of Public Power Corporation in 2016 and 75% of Copelouzos in 2017), the UK (11% stake in National Grid in 2016), or Luxembourg (24% in Encevo un 2018) (cf. Mazzucchi 2018, Zephyr database).

However, towards the end of the 2010s, debates on foreign investment, including in the energy sector, made a turn. The renewed attention to the risks of Foreign Direct Investment (FDI) can be understood in a context of shifting foreign investment patterns into the EU over the past decade, from mostly OECD countries (mainly the United States and Canada) to non-OECD countries, with a strong presence of Russia, China, and the Gulf countries.5 Such developments revived the debate about the risks that foreign acquisitions, particularly by SOEs, could pose in sensitive domains such as the energy sector, in terms of greater vulnerability to political pressure, cyber-attacks, industrial espionage, or so-called forced technology transfers (Conrad and Kostka 2017; Kaminski 2017). Foreign investment by Chinese SOEs received particular attention in the energy sector, as 36% of Chinese global outward investment between 2005 and 2017 concentrated on energy, with a growing focus on the production, transmission, and distribution systems of electricity (Mazzucchi 2018, 6). In the context of the energy transition, with its growing focus on digitalization, security concerns have recently further expanded from energy production, supply, and infrastructure (e.g., energy grids, power plants) to energy technologies (e.g., batteries, electric vehicles, lightening or semi-conductors) (cf. Rajavuori and Huhta 2020, see also Figure 2). Figure 2. Energy investment deals from China to EU countries by sector (2010–2021).

Source: author’s calculation from Zephyr. Deals include only transactions with a minimum of 10% acquisition and target countries are EU Member States that are also members of the OECD – these amount to 75 cases.

The most influential call for stepping up EU-level action on screening FDI came from a letter by the French, German, and Italian governments to the European Commission in February 2017. Interestingly, the problematization of foreign investment by the three Member States was less focused on security concerns as such and more on wider strategic considerations, mainly the consequences of the lack of reciprocity and level-playing field for the EU’s competitiveness and ‘strategic interests’ broadly defined. More specifically, the letter concluded with the appreciation that ‘EU law gives the right to the Member States to prohibit foreign investments which threaten public security and public order. What is needed is additional protection based on economic criteria’ (Governments of Germany, France and Italy 2017). This is, therefore, a call to expand the reasons to intervene in foreign acquisitions, from strict matters of (national) security to broader economic and strategic considerations. Therefore, this initial problematization was in line with a geopoliticized frame, namely the concern that competitors gain (unfair) advantage and use economic transactions for geostrategic purposes.

These demands led to the adoption of the Regulation (EU) 2019/452 establishing a framework for the screening of foreign direct investments into the Union (in force since November 2020). The Regulation invites all Member States to set up national screening procedures and establishes a coordination mechanism to share information regarding potentially security-sensitive foreign acquisitions. While the Regulation limits the reasons for intervention to ‘security and public order’, the political debate surrounding its adoption reflects the intended broad scope of the European lawmakers in the interpretation of these provisions. In the parliamentary debate on the Regulation’s final legislative report, the rapporteur justified the FDI screening mechanism in broad geopolitical terms, in the context of the ‘investment race between the United States and China, which must not turn Europe into a supermarket’ (Proust, in European Parliament 2019). A majority of the members of parliament referred to the goal of protecting Europe’s technological development and ‘strategic interests’ (Van Orden, Caspary, Saïfi, Hansen, Kukan, in European Parliament, 2020). Also, Commissioner Malmström used this broad justification, presenting the FDI Regulation as an instrument to ‘strengthen our collective capacity to respond to challenges that have arisen because of globalization, in particular when foreign investments threaten our strategic interest’ (Malmström, in European Parliament 2019). The mixing of security and wider considerations is also visible in the Council’s conclusions on the external dimension of the European Green Deal, in which the Member States referred, on the one hand, to more classical security concerns, such as the risk of ‘third country interference and economic coercion’; while on the other, also noted that ‘foreign direct investment in the EU’s energy infrastructure needs to respect the integrity of the EU’s internal market and should not undermine the EU’s security, strategic interests, and climate action goals’ (Council of the EU 2021).

In the context of the COVID-19 pandemic, the problematization of FDI acquired a slightly more securitizing character. For example, the Commission issued further guidelines on the FDI regulation calling Member States to ‘avoid that the current crisis leads to a loss of critical assets and technology’ (European Commission 2020b, 1). An incipient securitization of economic policy was reflected in constructions such as: ‘strategic assets are crucial to Europe’s security, and are part of the backbone of its economy and, as a result, its capability for a fast recovery’ (Ibid.). However, more than security and public order, the guidelines refer to wider ‘legitimate public policy objectives’, stating that for transactions involving third countries, ‘the permissible grounds of justification [of investment restrictions] may also be interpreted more broadly’ (Ibid.: 4). Therefore, the problematization still revolved around diffuse risks of economic competition in a geopolitically fraught context, rather than national security strictu sensu, hence more in line with a geopoliticizing frame.

In terms of policy practice, the geopoliticizing discourse on FDI is consistent with the general trend towards tightening legislation at the national level. By the time the EU FDI Regulation came into force, 17 EU Member States had already dedicated mechanisms to screen foreign ownership/acquisitions on grounds of national security, most of them introduced or further reformed over the past decade. By 2023, this number had risen to 22, and several Member States were planning to introduce a screening mechanism, or reform existing ones to include further sectors or lower the threshold of ownership for triggering a security review (Table A1 in Annex 1). In at least 9 of the 22 Member States with a screening mechanism, the energy sector is explicitly indicated as a sensitive domain warranting a security review. Some countries have also a specific security screening mechanism for the energy domain (e.g., the Netherlands, Spain, or Romania). Remarkably though, 20 Member States have long had other measures to control foreign acquisitions in the energy sector, such as partial or total state ownership of companies in the energy sector, golden share systems, or public holdings to acquire stakes in companies in case of foreign acquisition (Table A1 in Annex 1). Therefore, while there is a trend towards more restrictive legislation, as expected by the discursive shift, the overview of legislation shows that most Member States already had mechanisms in place to prevent unwanted foreign acquisitions in the energy sector. In that sense, an additional screening mechanism changes little in practice when it comes to protecting critical energy assets. This further suggests that, at least initially, the main driver of the screening mechanism was more the competitiveness of European economies than national security as such.

Another dimension to assess policy practice is the evolution of energy FDI in the EU Member States and the degree to which governments have used the possibility to restrict foreign acquisitions. Sensitivity to Chinese foreign investment, a growing concern over the past years, can serve as a good indication. An overview of the proposed energy deals and their outcome (Figure 3) shows an increase in the number of Chinese transactions in the energy sector that remained incomplete due to the withdrawal by the investor or explicit governmental intervention. For example, in 2016, Chinese SOEs failed to acquire 11% of EANDIS in Belgium, where local authorities owning the company opposed this operation amidst national political uproar about the deal (Renard 2017); in 2018, SGCC’s attempt to acquire 50 Hertz was blocked by the German government through the temporary acquisition of a 20% stake in the company via a public holding (Bundestag 2018). Such cases appear only after 2015, peaking in 2018, leading to an overall decrease in Chinese investment, which, besides the effects of the pandemic, could also indicate a certain chilling effect as a response to the more adverse political climate. Figure 3. Energy investment deals (above 10% acquisition) from China to the EU (2010–2020).

Source: author’s calculation from Zephyr. Deals include only transactions with a minimum of 10% acquisition and target countries are EU Member States that are also members of the OECD.

The debate on foreign ownership of energy assets only took up a clear securitizing turn at the end of 2021, with Russia’s build-up of military forces and eventual invasion of Ukraine in February 2022. The unusually low levels of gas in storage facilities in the EU owned by Gazprom since November 2021, mostly in Germany, already raised alarm about the political motivations behind Russia’s undersupply. The start of Russia’s invasion of Ukraine triggered a series of unprecedented moves affecting Russian energy investment in the EU. The most immediate one was the halting of the certification of the Nord Stream 2 pipeline, the last administrative step missing for the already completed pipeline to start shipping gas. While it was initially a temporary suspension, Germany’s announcement of emergency plans to permanently reduce supplies from Russia, together with the damage resulting from the unclaimed sabotage of the pipeline in September 2022, have de facto turned the Nord Stream route into a stranded asset.

The European Commission prepared the ground for further action against Russia’s subsidiaries in the EU, announcing legal measures identifying gas storage as critical infrastructure and introducing the obligation to certify (for all existing and future storage facilities) that foreign ownership does not put the security of EU Member States at risk (European Commission 2022b, 7). The Communication was inviting the Member States to start taking action urgently ‘as if the legislation was already in place’ (Ibid.). Germany was the first country to initiate legal measures in April 2022 to temporarily take control via the German regulator of Gazprom Germania Group (BMWK 2022), owning shares in important gas storage facilities and distribution pipelines, as well as considering the nationalization of Rosneft’s stakes in oil refineries in Germany (Krapp, Stratmann, and Witsch 2022). The European Commission published further guidelines on the implementation of the FDI Regulation encouraging EU Member States to tighten their national screenings on investment from Russian and Belarussian individuals or entities. While direct action focused on potential acquisitions from Russia and Belarus, the securitising dynamics created by Russia’s war on Ukraine also had a bearing on investment trends from China. In 2022, Chinese overall FDI in Europe registered its lowest levels since 2013, with only one large acquisition in the energy sector – CTG’s purchase of a solar photovoltaic portfolio in Spain (Kratz et al. 2023).

In sum, as represented in Figure 4, the framing of foreign investment in the energy domain in the context of the energy transition has evolved, from the predominance of largely depoliticizing frames in the 1990s and early 2000s to the prevalence of a geopoliticizing frame since the mid-2010s. Securitizing frames have also taken centre stage since Russia invaded Ukraine in 2022, mostly restricted to energy assets from this country, though also leading to more tightened controls on China. Figure 4. Summary of main developments and frames on foreign energy investment.

Source: own elaboration

Renewable Energy Production and Technology

Until recently, promoting renewable energy in the EU was a largely depoliticized affair. In 2008, the EU set its first binding national renewable energy targets for 2020. The approach favoured by the European Commission in the promotion of energy renewables was the primacy of market integration, for example, supporting more market-oriented instruments such as guarantees of origin over more effective but less market-friendly feed-in-tariffs (Lauber and Schenner 2011). However, particularly since the mid-2010s, the energy transition became gradually more politicized, with a simultaneous growth in pro-climate mobilization, as exemplified by youth movements such as Fridays for Future or Extinction Rebellion; and episodes of counter-mobilization in protest for rising energy taxes and prices seen as a consequence of decarbonization goals, such as the Gillets Jaunes movement in France. Also, EU Climate and Energy Policy became more contested, as a reflection of its growing authority. In that sense, adopting the 2030 EU Climate and Energy Goals in 2014 and the Governance of the Energy Union Regulation in 2018 was highly controversial, with several Member States pushing to avoid new binding targets (Jorgens and Solorio 2020). In this context, the European Green Deal, adopted as the flagship project of the Von der Leyen Commission in 2019 very much frames decarbonization as a domain of intra-EU and global re-distributive implications, as exemplified by the new €17.5bn Just Transition Fund.

At the same time, the European Green Deal, driven by the overarching goal of achieving carbon neutrality by 2050, was also presented as one of the instances of Von der Leyen’s pledge for a more ‘Geopolitical Commission’, in line with a geopoliticizing frame. One of the first flagship communications of the Von der Leyen Commission was the adoption of a New Industrial Strategy for Europe, boosting EU industrial leadership in the twin energy and digitalization transitions (European Commission 2020d). Moving away from the traditional market-centric approach of earlier Commissions towards renewable energy support measures, the New Industrial Strategy for Europe constituted a pledge for stronger public intervention in supporting the green tech sector. Such a move was justified as necessary at a time of ‘moving geopolitical plates’ to defend ‘Europe’s sovereignty’ and ‘strategic autonomy’, and improve the EU’s place in the ‘global race on the twin transitions’ (European Commission 2020d, 1–3). Some of the proposed measures included revising (read: ‘relax’) state aid rules, increasing public funding for research and development in key areas such as clean hydrogen, or updating the EU’s toolbox of trade defence mechanisms, including a new instrument to address the distortive effects caused by foreign subsidies within the single market.

The outbreak of the COVID-19 pandemic in Europe furthered the geopoliticizing trend, with the Council of Ministers (2020) calling for further ‘reducing strategic dependencies and increasing resilience in the most sensitive industrial ecosystems and specific areas such as energy’. An important concern in that regard was access to critical raw materials such as lithium, cobalt, or platinum, necessary for developing clean-energy technologies. The projections of about a 20-fold increase in demand for critical materials required to implement the carbon-neutral scenario by 2050 led the EU to devise further action in this field. In its 2020 communication on critical raw materials, the European Commission introduced an action plan to avoid a situation where the EU would ‘replace today’s reliance on fossil fuels with one on raw materials’ (European Commission 2020a). Also mentioning the goal of strategic autonomy, the communication alludes to the COVID-19 lessons about avoiding dependencies in strategic value chains (Ibid.). Some proposed measures consisted of increasing government support and public funding to domestic mining projects but also stepping up energy diplomacy to establish strategic partnerships and alliances for the supply of these materials, acknowledging that this matter ‘cannot be left to industry alone’ (Vanheukelen 2021).

The 2020 Industrial Strategy for Europe was updated one year later, motivated by the lessons of the COVID-19 crisis and the vulnerabilities and dependencies in supply chains it had exposed (European Commission 2021b, 1–2). The Commission mapped out these ‘strategic dependencies’ in an accompanying document, focusing on six areas, including critical raw materials, Li-ion batteries, and hydrogen (European Commission 2021a). The policy measures suggested to counteract these dependencies include diversification of demand and suppliers, stockpiling, and acting autonomously (European Commission 2021b, 13). Externally, the Council of the EU (2021) published its first Conclusions on the external dimension of the European Green Deal, calling to establish new strategic partnerships and an assertive strategy to set global regulatory standards, also in line with a geopoliticizing frame.

The change of strategic priorities was also reflected in the new external relations financial instrument for the period 2021–2027 – the Neighbourhood, Development and International Cooperation Instrument (NDICI). For example, in the Southern Mediterranean, the EU envisages setting up a regional initiative on sustainable finance, together with international financial institutions, to support large-scale investment in the production of renewables and green hydrogen (European Commission & High Representative, 2021: 20). This will accentuate the trend identified in the 2014–2020 financial term of growing relevance of investment facilities to leverage funds from international financial institutions for energy infrastructure projects, compared to traditional EU project-based assistance focused on regulatory measures (Figure 5). This growing relevance of development finance, via the European Investment Bank (EIB) and other national development banks, is also a sign of rising public intervention, and even a new form of ‘state capitalism’, emerging as a response to the increased role of financing from non-Western economies (Alami et al. 2021, 16). While it is still early to provide aggregate data on development assistance for the 2021–2027 period, the new Global Gateway initiative to channel EU strategic investment projects around the world illustrates the priority of renewable energy and clean-energy technologies. For example, of the flagship projects announced for 2023, 20 out 28 projects in Latin America, and 15 out of 17 projects in Asia are related to energy transition, including hydrogen, solar and wind energy, raw materials, or electricity interconnections (own calculation from European Commission 2023a). Figure 5. EU energy funding (€ million) towards neighbouring countries (1996–2020).

Source: own compilation from the Annual Action Programmes.

As in the case of foreign investment, the war on Ukraine also prompted a more securitizing frame, presenting the need for decarbonization as a security imperative. Soon after the start of the invasion, EU leaders declared the goal of achieving complete independence from Russia’s hydrocarbon supplies by 2026 via diversification of supplies and speeding up the rollout of renewable energy. These measures neatly fit the definition of extraordinary measures if one considers the difficulty and cost of replacing 40% (150 billion cubic metres) of EU gas imports and the high risk of gas supply interruptions. In March 2022 the European Commission proposed a new set of measures – the so-called REPowerEU plan – envisaging new legislative and financial support for the deployment of solar, wind, and (green) hydrogen, new pilot hydrogen partnerships, and boosting EU manufacturing capacity of low-carbon technologies (European Commission 2022c). The REPowerEU plan also proposed increasing the 2030 renewable energy target for the fourth time since 2014, bringing it to 45%, more than doubling the 20% goal reached in 2020. However, these ambitious goals live together with enduring disagreement between and within the Member States on the extent of gas curtailment needed and the reform of energy prices to accommodate the REPowerEU plan, all highly politicized topics given the economic and societal impact of the energy crisis.

Externally, the war on Ukraine accelerated the signing of new international agreements and partnerships at the EU level, for example on hydrogen (with Kazakhstan, Egypt and Namibia), on clean energy production (with Morocco and Azerbaijan) and on critical raw materials (with Canada, Norway and Argentina). The Transatlantic energy partnership was also reinforced with an agreement between the European Battery Alliance (EBA) and the US Li-Bridge Alliance on the resilience of battery supply chains, including the sourcing of critical raw materials (European Commission 2022a). In line with a geopoliticizing frame, the EU has also been advocating the creation of a Critical Raw Materials Club with like-minded countries to secure global supply of critical raw materials necessary for the clean-energy industries. However, certain topics remain highly politicized, such as whether the EU should focus on promoting only ‘green hydrogen’ produced from renewables or also non-renewable hydrogen, as several EU Member States advocate (Simon 2023); or whether nuclear energy, including small nuclear reactors promoted by the United States in several Member States, should be acknowledged as clean-energy solutions (Kadras 2023).

Furthering into a geopoliticizing frame, during the first months of 2023 the European Commission presented several new measures to reinforce the EU’s clean energy industry as part of a new Green Deal Industrial Plan (GDIP). The measures were spurred by the United States’ announcement in December 2022 of the Inflation Reduction Act (IRA), a $400bn subsidy programme to support domestic clean energy production and manufactured goods such as electric vehicles. Given its local content requirements, the IRA was strongly criticised by the EU as discriminatory and fostering a subsidy race amongst allies. Some of the landmark measures proposed in response include the goal of 40% of domestic manufacturing capacity of net-zero technologies, as part of the proposed Net Zero Industry Act (European Commission 2023b). In June 2023 the (European Commission and High Representative 2021) presented the first European Economic Security Strategy, embracing some securitizing language, such as calling for a ‘comprehensive strategic approach to economic security, de-risking and promoting its technological edge in critical sectors’ and emphasising the blurred lines between civilian and military technologies (European Commission and High Representative 2023, 2). Yet another important development was von der Leyen’s announcement, in September 2023, of a major anti-subsidy investigation on Chinese EV industry, signalling that the EU is willing to actively use its new arsenal of geoeconomic instruments . At the same time, and unlike the US, the EU has so far remained open to greenfield investment from China in the EU, particularly in the area of EV battery manufacturing (Kratz et al. 2023), showing that the EU is still willing to keep some degree of openness and interdependency with China. Moreover, the anti-subsidy announcement has led to contestation by some EU Member States and parts of business (Packroff 2023), which is reminiscent of the politicization of the EU anti-dumping investigation on Chinese solar panel in the early 2010s, which the Commission eventually abandoned in favour of a political compromise (cf. Goron 2018).

In sum, the framing of renewable energy production has also evolved away from the prevalence of depoliticizing frames. However, unlike the FDI case, where geopoliticizing frames have become the dominant lens guiding policy practice, for renewable energy production, politicizing, geopoliticizing, and securitizing frames co-occur (Figure 6), making it difficult to foresee whether the exceptional measures proposed by the Commission to accelerate the energy transition following Russia’s invasion of Ukraine will eventually materialise as envisaged. Figure 6. Summary of main developments and frames on renewable energy production.

Source: own elaboration

Conclusion

Geopoliticization is a growingly used, yet ill-defined, concept. This paper endeavoured to take this notion seriously and assess its analytical added value. The theoretical proposition advanced in this paper is that geopoliticization can be conceptualised as the missing link between to the more established concepts of politicization and securitization. As a bridging notion it has several advantages. On the one hand, geopoliticization allows capturing the framing and policy measures related to a more diffuse sense of security than required by the rather demanding notion of securitization, which has been difficult to employ, particularly in international economic matters where existential threats as such are rare. The conceptual distinction between geopoliticization and securitization can, therefore, contribute to a more nuanced analysis of the drivers and consequences of the so-called ‘geoeconomic order’, thus going beyond the current tendency to conflate the two processes (cf. Roberts, Moraes, and Ferguson 2019). On the other hand, geopoliticization as a middle step is also useful in understanding that politicization and geopoliticization, though driven by different structural dynamics, can often intersect. When domestic debates about how to deal with strategic competitors or navigate global power rivalries remain salient and polarised, securitization dynamics are unlikely to develop. Adopted policies will be patchy and volatile, as they may be overturn by changing political majorities. Conversely, where geopoliticization becomes the dominant frame and crystalizes into policies and institutions, the advent of critical events can more easily evolve into securitizing trends.

The empirical analysis presented in this paper confirms that the EU’s approach to the energy transition adheres to a mostly geopoliticizing frame, leading to the adoption of various geoeconomic policy instruments, such as EU-level green industrial policy, to boost innovation and local manufacturing of green technologies, an expansion of the valid reasons to screen and block foreign investment in the energy sector, or the re-orientation of EU energy diplomacy towards strategic renewable energy projects and technological alliances with a selected range of partners. In the context of the war on Ukraine, the framing of the energy transition has acquired a more securitizing character, prompting fast-tracked adoption of exceptional measures such as the (temporary) nationalization of foreign energy assets, or emergency planning of further renewable energy capacity. The difference between the two examined cases is that geopoliticization has only become the dominant frame in foreign investment, leading to a situation where there is limited contestation about the need to consider the wider geostrategic effects of foreign acquisitions and block access to strategic competitors. For the case of renewable energy production and technological development, geopoliticizing trends have added to, but not overlaid, the politicized character of this domain. This area is therefore more contested and makes an EU-wide green industrial policy more difficult to implement. Still, in both cases, it is hard to imagine that the exceptional measures in response to Russia’s invasion of Ukraine could have been possible without the more gradual but structural geopoliticization process that gelled in previous years.

On a more normative level, the paper is a note of caution against overly geopoliticizing frames. Although EU officials and documents routinely insist that geoeconomic instruments are not the preferred option and that the proposed protective measures are a defence against those countries not playing by the rules, the overall unintended consequence is contributing to wider geopoliticization dynamics. By embedding new initiatives such as the FDI screening regulation, green industrial policy, or carbon adjustment mechanisms in the discourse of global power rivalries, these measures set a geopoliticization process in motion, the side-effect being heightened global competition and diminishing reservoirs of trust in multilateral institutions. This is also reflected in the EU’s emerging Green Deal diplomacy, so far characterised by a mostly defensive and inward-looking character that may pose new challenges for building strong renewable energy partnerships, as many of the EU’s partners also aspire to become renewable energy leaders. In that sense, an excessive focus on technological leadership and widespread moves to reshoring and decoupling from green tech global value chains could eventually delay the energy transition. In a recent opinion piece, the former European Commission Vice-President and the EU High Representative maintained that ‘the geopolitics of climate change must inform all of our thinking’ (Timmermans and Borrell 2021). Yet, the challenge facing the energy transition is also to avoid that, in a geopoliticizing world, climate change becomes hostage of global power rivalries.

Acknowledgements

This paper falls within the Project ‘Dangerous Assets? Foreign Investment Governance in times of De-Globalization,’ funded by the Netherlands Organization for Scientific Research (NWO). The author is grateful to Bjarn Eck for research assistance in the collection and visualization of data on foreign energy investment; as well as to all the colleagues that contributed detailed comments on previous versions of this piece: Germán Bersalli, Sjorre Couvreur, Niels Gheyle, Naná de Graaf, Fredi de Ville, Scott Hamilton, Thomas Jacobs, Daniel Scholten, Michal Natorski, Jan Orbie, Bernardo Rangoni, Clara Weinhardt, Veronika Zapletalová, and the two anonymous reviewers.

Notes

Disclosure statement

No potential conflict of interest was reported by the author.

Annex 1. Table 1. Overview of EU Member States’ policies on acquisition- and ownership-related policies to safeguard essential security interests

Country	FDI Screening Mechanism	Further reforms	Energy in the screening?	Other control mechanisms of energy assets?	
Austria	Yes (2011)	Planned (lower trigger threshold from 25 to 10%), updated 2022	n.d.	Yes (some energy assets under State ownership through holding company OeBAG)	
Belgium	Yes (2023)	No	n.d.	Yes (Golden-share arrangements for gas distribution)	
Bulgaria	No	Planning to introduce a screening mechanism	No	Yes (maintains certain assets under State ownership and control, incl. infrastructure and distribution in electricity and gas markets, nuclear sector)	
Croatia	No	No	No	Yes (holds a range of energy assets under State ownership)	
Czech Republic	Yes (2021)	No	n.d.	Yes (State retains stakes or control in enterprises in the energy and utilities sectors)	
Cyprus	No	Screening law in preparation (expected to enter into force 2023/2024)	n.d.	n.d	
Denmark	Yes (2012)	Amended in 2023 to tighten control on Energy Island in North Sea	No	Yes (legal obligation for its State-controlled energy infrastructure company Energinet to acquire electricity and gas network assets if they are divested from private owners)	
Estonia	Yes (2023)	No	No	Yes (keeps significant infrastructure assets under State ownership, e.g., the main electricity and gas operators Eesti Energia and Elering)	
Finland	Yes (1939)	Reform in 2012 and additional mechanism in 2019	No	Yes (State keeps certain companies and operators under partial or full State-ownership, incl. Gas and electricity infrastructure companies)	
France	Yes (1966)	Reform in 2014, 2019 and 2022 (prolongation of temporary reduction of control threshold from 25% to 10% voting rights of listed companies)	n.d.	Yes (controls or owns a significant portfolio of companies, incl. energy utilities, and since 2019, golden share option)	
Germany	Yes (2004, 2007, 2009)	Reform planned. Also, special measures after COVID-19 (reduce review threshold to 10% for advanced technology and critical infrastructure)	n.d	Yes (keeps some assets under government control, in particular in the infrastructure and energy sectors)	
Greece	Yes (1990)	Reform underway in 2023	No	n.d.	
Hungary	Yes (2019)	Update in 2022 to harmonise with EU screening	Yes	Yes (keeps significant parts of its economy in State ownership, incl. energy firms)	
Ireland	No	Screening law in preparation (expected to enter into force in 2023/2024)	No	Yes (partial State-ownership over electricity and gas operators)	
Italy	Yes (2012)	Reform in 2019. Also, COVID-19 reforms temporarily expand the scope of the powers to cover additional sectors declared strategic and lower the review threshold to 10%; update in 2022 to factor in war in Ukraine on sectors like cybersecurity, raw materials and agricultural goods	Yes	n.d.	
Latvia	Yes (2017)	Reform in 2022 (prohibition of acquisitions by Russian and Belarussian citizens in sensitive sectors)	Yes	Yes (State keeps a significant number of enterprises in sectors traditionally sensitive, incl. Energy)	
Lithuania	Yes (1995, 2009)	Reform in 2022	Yes	Yes (State keeps some enterprises in sectors traditionally sensitive, incl. Energy)	
Luxembourg	Yes (2023)	No	No	Yes (State holds some assets, especially in energy, in State- ownership)	
Malta	Yes (2020)	No	n.d.	n.d.	
Netherlands	Yes (1998)	Reform planned to integrate the different screening mechanisms	Yes	No (but the screening mechanisms are specific for gas and electricity)	
Poland	Yes (1920, 2002, 2015)	Reform 2022 (expansion of sectors subject to screening)	Yes	Yes (ownership limits in nine enterprises operating in the energy sector)	
Portugal	Yes (2014)	No	Yes	n.d.	
Romania	Yes (2011, 2019)	Reform underway	Yes	Yes (keeps a significant range of assets, especially enterprises operating in the infrastructure sectors, in State-ownership)	
Slovakia	Yes (2022)	No	No	Yes (State owns controlling stakes in several companies, especially in the energy and energy infrastructure sectors, and plans to make greater use of State-ownership and -control)	
Slovenia	Yes (2020)	Reformed 2023	No	Yes (State holds stakes of 50% plus one vote in energy companies)	
Spain	Yes (1981, 1999, 2007, 2013)	Reform 2022 to update definitions (e.g. critical technologies) and procedures	Yes	No	
Sweden	No	Planning to introduce a screening mechanism	No	No	
Source: own elaboration from OECD (2020) and European Commission (2023c).

1. Using the number of entries featuring ‘geopoliticization’ on the search engine Google as a proxy, the evolution is telling: if the historical records until the end of 2009 indicate only 80 entries featuring that term, the number of mentions had risen to 700 by the end of 2019, and accelerated from 2020 onwards (1.160 mentions only between January 2020 and October 2023, more than half of them in Google Scholar).

2. Google shows an exponential increase from 1.300 annual entries in 2010 to 15.000 in 2019 and over 32.000 in 2022 and 57.000 in 2023.

3. Own calculation from investment transactions data provided in Łoskot-Strachota (2008:35–39).

4. For the period 2000–2009, Russia was the acquirer in 89 (17.6%) of the energy-related acquisitions (above 10% stake) in OECD economies, compared to 45 (8.9%) of acquisitions by Chinese companies. For the period 2010–2020, the order inverted, with China being the acquirer in 158 cases (23.7%) and Russia in 78 cases (11.7%) (own calculation from Zephyr database).

5. Presentation by a senior DG Trade official during a CELIS symposium on EU investment screening April 2020.
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