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Fossil fuels, such as coal, gas and oil are rapidly declining in the EU energy mix, dropping below 39% of electricity production in early 2026, with wind and solar reaching roughly 30% and becoming the primary power source in some states. Despite this shift, fossil fuels still make up significant portions of energy in countries like Cyprus, Malta and Poland, with gas remaining a key needed resource. With the growing energy security and dependence on imported fuels, the rise of domestically produced renewables (wind and solar power) is seen as a cornerstone of Europe’s economic and geopolitical resilience.
Background
The so-called Total Energy Supply (TES) is a key concept used in energy statistics and policy analysis to measure the total amount of energy that a country needs to supply to meet its final end-use demand. It reflects the energy that is either produced domestically or imported, minus what is exported or stored. Some energy sources are consumed directly whilst others may be converted into fuels or electricity for final consumption with transmission, distribution, and efficiency losses impacting throughout the system.
TES serves as a baseline for assessing energy dependency, planning infrastructure, and evaluating sustainability and climate impacts. Calculating it typically follows the United Nations’ International Recommendations for Energy Statistics (IRES) for creating national energy balances.
Reference to: https://www.integrin.dk/2026/03/20/the-energy-mix-in-the-eu-member-states-fossil-fuels-and-renewables/
The fossil fuel equivalent method (FFEM) is a way of comparing the energy inputs of renewable energy sources, like solar or wind, to the primary energy inputs of traditional fossil fuels (coal, oil, natural gas) by converting renewable energy into a comparable unit using a “fossil fuel equivalency factor” allowing for a direct comparison. It indicates how much fossil fuel would be needed to provide the same amount of energy (usually electricity) as a given renewable source.
Oil is still the largest energy source in six of the world’s 10 biggest economies, including the U.S., Germany, Japan, the UK and Italy. In these countries, oil plays a major role in transportation and industrial sectors. Italy has the highest reliance on oil among the group, with nearly 46% of its energy coming from petroleum. Germany and the UK also depend heavily on oil, though both have been expanding renewable energy capacity in recent years.
https://www.visualcapitalist.com/energy-mix-of-worlds-10-largest-economies/?mc_cid=9de3dd7201
In an effort to bring Russian gas imports to zero, the EU has not only been reducing gas consumption, but also diversifying gas sources. This led to more reliance on imports of liquefied natural gas (LNG), which accounted for 38% of imports in 2024, up from 22% in 2019. This reliance is only likely to deepen as Russian gas exports to Europe via Ukraine stopped in January 2025. Continuing to reduce EU gas demand in all sectors – including power – will deliver further strategic, economic and climate benefits. It will minimise the exposure of households and companies to the inherent volatility and price shocks of the global LNG market. Additionally, it will avoid negative climate impacts, as burning US LNG is as polluting as burning coal. Finally, it is fully aligned with the EU’s security objective to end reliance on Russian energy.
Source: https://ember-energy.org/latest-insights/european-electricity-review-2025/five-years-of-progress/
Energy ambitions and modern crisis
For the second time in less than five years, European over-dependency on fossil fuels has led to higher energy prices. This dependency comes at a price: it reduces the disposable income of households and erodes the corporate competitiveness, especially energy-intensive companies. For example, during the first 50 days of the middle-east conflict, the EU has spent an additional
€24 billion on fossil imports.
While the EU’s energy security is currently not at risk, the price volatility caused by dependence on imported fossil calls for immediate relief to citizens, especially the most vulnerable ones, and companies.
The Commission’s “accelerate EU website” is aimed at assisting the member states and local authorities in providing immediate support to protect households and industries from rising costs. At the same time, the Commission supports the EU’s goal to achieve energy independence, through a decarbonised and resilient energy system based on homegrown clean energy and electrification.
As to the deeper EU-wide coordination, the following steps are envisioned:
= Better coordination among the EU-27 states on gas storage filling, possible oil stock releases and on the use of flexibilities to prevent shortages, including the safeguarding of jet fuel and diesel supplies.
= A new Fuel Observatory will map supply, prioritise alternative jet fuel sourcing, and optimise distribution.
= The Commission will map existing refining capacities in Europe, assess needs, and work on measures to ensure full use of – and sufficient – domestic refining capacity.
In accelerating the shift to the home-grown clean energy sources and electrification, the Commission has acknowledged that:
= the EU needs to boost domestic production of homegrown clean energy – such as renewables, nuclear and sustainable biofuels. Renewables and nuclear now account for over 70% of the EU’s electricity generation.
= Improving insulation, electrifying heating and cooling, and replacing inefficient household appliances can deliver immediate and long-lasting energy savings and cost relief. This will also boost clean tech manufactured in the EU and create jobs.
= The upcoming EU Electrification Action Plan will have an ambitious electrification target and measures to address barriers in the industrial, transport and building sectors. Replacing gas and oil boilers with heat pumps will cut final energy consumption and energy bills in buildings. Nd
Source and citations from: “Tackling a fossil fuel energy crisis by accelerating the shift to clean, homegrown energy”, Commission, April 2026. In: PDF ISBN 978-92-68-39418-2. doi: 10.2833/6674586.
The EIB’s investment analysis
Decreasing technology costs over the last two decades have allowed the development and operation of renewable energy projects solely based on market revenues, without the need for public financial support, in some markets. A significant number of onshore wind and solar photovoltaic projects are already developed without subsidies in certain European geographies, while for offshore wind, subsidy-free projects are increasing.
As outlined in a recent EIB’s market study, two financial instruments could be envisaged to address the credit risk of off-takers and the residual merchant risk for generators:
• An off-taker guarantee instrument to support the demand for commercial PPAs by providing credit risk protection against potential default by off-takers under a commercial PPA. The off-taker would then benefit from a level of long-term power price predictability that commercial PPAs offer. The guarantee would secure a part of the off-taker’s payment obligations under the agreement. Such an instrument could benefit stand-alone larger corporate off-takers that are not considered sufficiently credit worthy by project funders, or numerous small off-takers (or a consortia of off-takers) on an aggregated portfolio basis.
• A subordinated debt instrument that aims to support renewable energy promoters, especially in cases of exposure to merchant tail risk, following the maturity of initial short/medium-term commercial PPAs put in place to secure the financing. This instrument would be conditional on at least having a commercial PPA in place for an initial period and for a minimum volume and would be secured by a pledge on a given volume of energy to be delivered by the generator and a waterfall payment.
These “de-risking” instruments could also benefit from advisory support to further stimulate the market demand for commercial PPAs, especially targeting smaller corporate off-takers. For example, an advisory platform, partly online and with open access, could raise awareness, share best practices, build the capacity of relevant stakeholders and propose standardised approaches to or contracts for the use of commercial PPAs.
Source and citation from: https://www.eib.org/attachments/lucalli/20230330_investment_barriers_in_the_eu_2023_en.pdf