EU mulls foreign fossil fuel investments to combat rising energy costs

• The EU is considering investing in foreign LNG infrastructure to address rising energy costs, according to a leaked proposal obtained by Politico. Reduced renewable energy output has contributed to higher power prices across the bloc.
• The EU is currently engaged in talks with the U.S. to increase LNG imports. Environmental groups warn that such investments could conflict with the bloc’s climate goals.
• The proposal indicates that the EU wants to work immediately with international LNG suppliers and finalize long-term agreements by July.

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The European Union is reportedly exploring investments in foreign fossil fuel infrastructure to address rising energy costs across the continent. This development could potentially benefit the U.S. oil and gas industry.

Why is the EU considering this?

A recent trend of reduced output from renewable energy sources in the EU has increased power prices for consumers. In response, European leaders may increase spending on liquefied natural gas (LNG) to stabilize energy prices.

According to a leaked proposal obtained by Politico, the bloc is considering financial support for LNG infrastructure projects abroad and signing long-term contractual agreements to secure additional supplies of the fossil fuel. The proposal is part of the EU’s upcoming Action Plan for Affordable Energy.

This would mark a shift in current EU energy policies, focusing on phasing out LNG use while seeking short-term LNG contracts.

Will American LNG imports be used to meet EU energy needs?

The proposal also references the possibility of adopting a strategy similar to the so-called “Japanese model,” in which government-backed trade investments in overseas LNG projects secure preferential gas prices. Japan has applied this approach in collaboration with the U.S., becoming the largest public investor in American LNG projects in exchange for lower-cost imports.

The leaked proposal emerges as the EU engages in discussions with the U.S. regarding LNG imports. European envoys have reportedly been dispatched to Washington to negotiate a potential deal for increased American LNG purchases.

Has the EU’s LNG plan seen any pushback?

Environmental groups have expressed opposition to using public funds to expand fossil fuel infrastructure. Critics argue that such investments could conflict with the EU’s broader climate objectives.

“Fossil fuels are non-renewable sources of energy, and their production and use contribute significantly to climate change and pollution,” the European Environment Agency said while calling for “fossil fuel subsidies to be phased out without delay.”

What happens next?

Despite these concerns, the proposal indicates that the EU will immediately work with reliable foreign LNG suppliers to secure cost-competitive imports and establish long-term contracts. The bloc aims to implement these measures by July.