CES

Energy & Climate Security Risk Index

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Energy & Climate Security Risk Index

Europe is in the midst of a structural shift in its energy and climate policy. It will determine not only the continent’s success in meeting its decarbonization goals, but also the EU’s position in the global economy and the economic security of its members. The multiple crises hitting the European energy sector in the past almost four years have brought this challenge into sharp focus. Russia’s weaponization of fossil fuel exports, volatile global oil and gas markets, and the mounting competition for the raw materials and clean technologies that underpin the green transition have exposed deep vulnerabilities in the EU’s energy system.

The ECSRI uses 20 indicators across four dimensions to calculate a country’s risk score. As these indicators are measured in different units, each one is standardized by converting it into a z-score using the EU average and standard deviation from 2015 as reference values. 2015 was a critical inflection point, coming shortly after Russia’s annexation of Crimea when energy prices were low and the opportunity to diversify supply was missed. Using 2015 as a benchmark enables the index to capture shifts in risk levels and reflect the consequences of inaction during a period of strategic vulnerability for Europe.

The Energy Security Risk Index reflects the four dimensions of energy security (geopolitics, economics, reliability, and environment), covering 42 individual risk indicators, based on thousands of data points. Each of the four dimensions of energy security constitute a sub-index.
About the Index

Geopolitical

• Security of Petroleum Imports
• Security of Natural Gas Imports
• Security of Raw Materials and RES Imports

Affordability

• Oil & Natural Gas Import Expenditures per GDP
• Energy Expenditures per GDP
• Retail Electricity Prices - HH
• CO2 Costs
• Retail Natural Gas Prices - HH
• Retail Electricity Prices (non-HH)

Reliability

• Electricity Capacity Margins
• Electricity Capacity Diversity
• Gas Stocks
• Gas Infrastructure Reliability
• Household Energy Efficiency

Sustainability

• Energy Intensity
• Emissions Intensity
• Electricity Non-CO2 Generation Share
• Waste per Capita
• Circular Material Use Rate
• Material Footprint

Energy & Climate Risk

In the early 2020s, Europe confronted a painful truth: its economy was far more vulnerable than its policymakers had long assumed. Energy, the silent enabler of growth, competitiveness, and modern life, had become the continent’s biggest strategic liability. The rupture came not just from Russia’s brutal invasion of Ukraine, though that was the most visible trigger. It came from a deeper miscalculation: the belief that market liberalization and globalization had made energy security a second-order issue. In reality, Europe had built its prosperity atop imported fossil fuels, often from authoritarian states, and its clean energy ambitions on technologies and materials dominated by geopolitical competitors. The result was a system that looked stable in spreadsheets but cracked under pressure.
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Poland, Bulgaria, Greece, Czechia and Lithuania 

Very high-risk EU countries face a complex set of energy challenges, including high energy and carbon intensity. This not only creates significant sustainability issues but also fuels an affordability crisis and exposes them to geopolitical risks. The complex interplay of these risks stems from the knock-on effects of high energy and CO2 costs, which are driven by factors such as the soaring price of carbon allowances and tight natural gas supplies. Between 2020 and 2023, the average EU carbon price increased by over €40 per tonne, primarily due to a sharp reduction in the number of freely allocated allowances and a rise in natural gas prices which led to the increased use of coal for power generation and consequently a higher demand for emissions allowances.
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Hungary, Croatia, Italy, Belgium, Romania, Estonia 

Although these countries experience similar structural vulnerabilities in their energy and climate security risk profile, the drivers are more diverse. Hungary, Italy and Belgium face high geopolitical risks, while Romania and Estonia exhibit higher sustainability risks, in particular in relation to their high material consumption and waste generation. All of these countries also faced a severe affordability crisis in 2023.
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Ireland, Portugal, Slovenia, Germany, Finland, Netherlands, Luxembourg 

Initial text: This group of countries face a lower exposure to geopolitical and affordability risks. This is partly the result of the decisive action taken by their national policymakers since the start of Russia’s war in Ukraine to phase out almost entirely Russian oil and gas imports. The lower vulnerability is also linked to their economies’ overall low dependency on fossil fuels, which reduces energy expenditures and reliance on imports.
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Latvia, Spain, Slovakia, Sweden, Denmark, Austria, France 

The energy and climate security profile of the countries in this group demonstrates the strong link between the improvement of sustainability indicators and the lowering of affordability risk. High shares of renewables in electricity generation and low energy and emissions intensities translate directly into lower CO2 costs, electricity prices and energy expenditures. In addition, they lead to the decline in the geopolitical risk exposure associated with fossil fuel imports. The policy-driven energy transition process means a more diversified power mix, and hence more reliable supply based on less volatile energy technologies.

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Energy & Climate Risk

In the early 2020s, Europe confronted a painful truth: its economy was far more vulnerable than its policymakers had long assumed. Energy, the silent enabler of growth, competitiveness, and modern life, had become the continent’s biggest strategic liability. The rupture came not just from Russia’s brutal invasion of Ukraine, though that was the most visible trigger. It came from a deeper miscalculation: the belief that market liberalization and globalization had made energy security a second-order issue.
Read more

 
 

Poland, Bulgaria, Greece, Czechia and Lithuania 

Very high-risk EU countries face a complex set of energy challenges, including high energy and carbon intensity. This not only creates significant sustainability issues but also fuels an affordability crisis and exposes them to geopolitical risks. The complex interplay of these risks stems from the knock-on effects of high energy and CO2 costs, which are driven by factors such as the soaring price of carbon allowances and tight natural gas supplies.
Read more

Hungary, Croatia, Italy, Belgium, Romania, Estonia 

Although these countries experience similar structural vulnerabilities in their energy and climate security risk profile, the drivers are more diverse. Hungary, Italy and Belgium face high geopolitical risks, while Romania and Estonia exhibit higher sustainability risks, in particular in relation to their high material consumption and waste generation. All of these countries also faced a severe affordability crisis in 2023.
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Ireland, Portugal, Slovenia, Germany, Finland, Netherlands, Luxembourg 

This group of countries face a lower exposure to geopolitical and affordability risks. This is partly the result of the decisive action taken by their national policymakers since the start of Russia’s war in Ukraine to phase out almost entirely Russian oil and gas imports. The lower vulnerability is also linked to their economies’ overall low dependency on fossil fuels, which reduces energy expenditures and reliance on imports.
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Latvia, Spain, Slovakia, Sweden, Denmark, Austria, France 

The energy and climate security profile of the countries in this group demonstrates the strong link between the improvement of sustainability indicators and the lowering of affordability risk. High shares of renewables in electricity generation and low energy and emissions intensities translate directly into lower CO2 costs, electricity prices and energy expenditures. In addition, they lead to the decline in the geopolitical risk exposure associated with fossil fuel imports.
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Geopolitical Risk

The Geopolitical pillar assesses a country’s exposure to external geopolitical shocks based on its dependency on imported energy and raw materials. It captures vulnerabilities in oil, gas, and critical raw material supply chains, which are increasingly influenced by global market volatility and strategic competition. Key indicators include the security of petroleum imports, natural gas imports, and imports of raw materials and renewable energy sources (RES) components.
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Belgium, Greece, Hungary, Slovakia, Italy  

In 2023, the security of natural gas imports continued to be the primary risk factor in the geopolitical landscape. Despite the availability of alternative import routes, Hungary and Slovakia remain reluctant to reduce their imports of Russian oil and natural gas, citing security of supply concerns. Rather than using the time since the adoption of the REPowerEU plan to maximize alternative supply routes, they have aimed to entrench the Russian gas flows via the TurkStream pipeline, thus undermining the EU Roadmap.
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Bulgaria, Austria, Ireland, Lithuania, Czechia, Portugal, Spain  

These countries’ energy landscapes are characterised by a paradox of progress and vulnerability. Some nations have successfully diversified their energy supply chains, reducing their dependence on a single source of imports. This has been a key strategic objective since the energy crisis caused by Russia’s invasion of Ukraine. However, concerns remain over the security of their supply, given critical weaknesses in their infrastructure. 
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Luxembourg, Slovenia, Latvia, Poland, Croatia, France, Romania, Germany, Netherlands 

Countries in this group tend to perform well across most of the geopolitical risk indicators and have improved their security of oil and natural gas imports in 2023 by taking decisive action to decouple from Russia. Moreover, they were able to capitalise on the extensive network of interconnector pipelines at their disposal, along with ample LNG and storage capacity.
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Estonia, Finland, Denmark, Sweden 

In all four of these countries, natural gas makes up less than 10% of their gross inland energy consumption and, except for Denmark, the share of oil lies far below the EU average as well. Their electricity systems are well integrated and renewables in combination with nuclear power plants are often able to cover demand even during peak hours, while natural gas plays a negligible role in electricity generation.
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Geopolitical Risk

The Geopolitical pillar assesses a country’s exposure to external geopolitical shocks based on its dependency on imported energy and raw materials. It captures vulnerabilities in oil, gas, and critical raw material supply chains, which are increasingly influenced by global market volatility and strategic competition. Key indicators include the security of petroleum imports, natural gas imports, and imports of raw materials and renewable energy sources (RES) components.
Read more

 
 

Belgium, Greece, Hungary, Slovakia, Italy  

In 2023, the security of natural gas imports continued to be the primary risk factor in the geopolitical landscape. Despite the availability of alternative import routes, Hungary and Slovakia remain reluctant to reduce their imports of Russian oil and natural gas, citing security of supply concerns. Rather than using the time since the adoption of the REPowerEU plan to maximize alternative supply routes, they have aimed to entrench the Russian gas flows via the TurkStream pipeline, thus undermining the EU Roadmap.
Read more

Bulgaria, Austria, Ireland, Lithuania, Czechia, Portugal, Spain  

These countries’ energy landscapes are characterised by a paradox of progress and vulnerability. Some nations have successfully diversified their energy supply chains, reducing their dependence on a single source of imports. This has been a key strategic objective since the energy crisis caused by Russia’s invasion of Ukraine. However, concerns remain over the security of their supply, given critical weaknesses in their infrastructure. 
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Luxembourg, Slovenia, Latvia, Poland, Croatia, France, Romania, Germany, Netherlands 

Countries in this group tend to perform well across most of the geopolitical risk indicators and have improved their security of oil and natural gas imports in 2023 by taking decisive action to decouple from Russia. Moreover, they were able to capitalise on the extensive network of interconnector pipelines at their disposal, along with ample LNG and storage capacity.
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Estonia, Finland, Denmark, Sweden 

In all four of these countries, natural gas makes up less than 10% of their gross inland energy consumption and, except for Denmark, the share of oil lies far below the EU average as well. Their electricity systems are well integrated and renewables in combination with nuclear power plants are often able to cover demand even during peak hours, while natural gas plays a negligible role in electricity generation.
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Affordability Risk

The affordability risk pillar of the Index evaluates the financial strain that energy systems place on national economies, businesses, and households. It captures both direct and indirect affordability risks by assessing energy prices, import expenditures, and the broader macroeconomic burden of energy consumption. Together, these factors reveal how vulnerable countries are to energy-driven inflation, energy poverty, and competitiveness pressures.
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Poland, Bulgaria, Czechia 

The EU countries’ carbon and energy intensity are the strongest predictors of high affordability risks. Poland, Bulgaria and Czechia are particularly vulnerable because they generate a large proportion of their electricity from coal and have some of the most energy-intensive industrial sectors in the bloc. The surge in the EU carbon price, driven by the reduction of free emissions allowances under the “Fit-for-55” plan in combination with rising gas prices, has caused CO2 costs to soar in these three countries.
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Lithuania, Greece, Croatia, Slovenia, Italy, Netherlands, Estonia, Romania, Latvia 

Rather than prioritizing the immediate expansion of renewables, many of these countries have doubled down on the expanded use of natural gas as a ‘bridge fuel’ for the transition in the power sector. The additional overreliance on natural gas for residential heating has led to major vulnerabilities.
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Hungary, Germany, Slovakia, Belgium, Portugal, Austria, Spain 

Thanks to their ample nuclear energy capacity and/or the rapid growth of renewable energy sources, these countries have reduced their reliance on coal and gas, and they are now enjoying significantly lower energy and CO₂ costs than many of their European counterparts. They can also import cheaper electricity from neighbouring countries via extensive cross-border grid infrastructure, rather than having to turn on more expensive domestic peaker plants.
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Ireland, Denmark, France, Sweden, Finland, Luxembourg 

Electricity prices are generally lowest in EU countries where wholesale electricity prices are determined by renewables and nuclear power for most hours of the day. These countries also have some of the least energy- and emissions-intensive economies in the EU, thanks to a strong service sector, innovative industrial and building solutions, and advanced electrification. This results in very low CO₂ and overall energy costs relative to their GDP.
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Affordability Risk

The affordability risk pillar of the Index evaluates the financial strain that energy systems place on national economies, businesses, and households. It captures both direct and indirect affordability risks by assessing energy prices, import expenditures, and the broader macroeconomic burden of energy consumption. Together, these factors reveal how vulnerable countries are to energy-driven inflation, energy poverty, and competitiveness pressures.
Read more

Poland, Bulgaria, Czechia 

The EU countries’ carbon and energy intensity are the strongest predictors of high affordability risks. Poland, Bulgaria and Czechia are particularly vulnerable because they generate a large proportion of their electricity from coal and have some of the most energy-intensive industrial sectors in the bloc. The surge in the EU carbon price, driven by the reduction of free emissions allowances under the “Fit-for-55” plan in combination with rising gas prices, has caused CO2 costs to soar in these three countries.
Read more

Lithuania, Greece, Croatia, Slovenia, Italy, Netherlands, Estonia, Romania, Latvia 

Rather than prioritizing the immediate expansion of renewables, many of these countries have doubled down on the expanded use of natural gas as a ‘bridge fuel’ for the transition in the power sector. The additional overreliance on natural gas for residential heating has led to major vulnerabilities.
Read more

Hungary, Germany, Slovakia, Belgium, Portugal, Austria, Spain 

Thanks to their ample nuclear energy capacity and/or the rapid growth of renewable energy sources, these countries have reduced their reliance on coal and gas, and they are now enjoying significantly lower energy and CO₂ costs than many of their European counterparts. They can also import cheaper electricity from neighbouring countries via extensive cross-border grid infrastructure, rather than having to turn on more expensive domestic peaker plants.
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Ireland, Denmark, France, Sweden, Finland, Luxembourg 

Electricity prices are generally lowest in EU countries where wholesale electricity prices are determined by renewables and nuclear power for most hours of the day. These countries also have some of the least energy- and emissions-intensive economies in the EU, thanks to a strong service sector, innovative industrial and building solutions, and advanced electrification. This results in very low CO₂ and overall energy costs relative to their GDP.
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Reliability Risk

This pillar evaluates a nation’s ability to withstand disruptions to its energy supply and maintain stable energy flows during crises. It evaluates the robustness of infrastructure (e.g. energy storage, electricity capacity margins and the reliability of gas infrastructure, measured as the share of daily gas demand that could still be covered if the largest piece of gas infrastructure should fail), the adaptability of demand (e.g. household energy efficiency) and the risks associated with over-reliance on single suppliers or vulnerable trade routes.
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Luxembourg, Poland, Finland, Croatia, Ireland, Sweden 

The reasons for these countries’ high scores vary significantly from country to country, but are largely related to limited gas, power grid and storage infrastructure. However, high reliability risks are not always strongly correlated with higher geopolitical, affordability or sustainability risks, as neglecting gas infrastructure tends to result from the economy being less dependent on gas overall.
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Belgium, Portugal, Lithuania, France, Denmark, Italy, Estonia, Greece 

Most of the countries in this group struggle with high risk scores associated with gas stocks and their gas infrastructure reliability. While the average EU gas storage levels in 2023 could cover 122 days of average natural gas demand, Lithuania, France, and Italy could only supply fewer than 90 days (Belgium, Portugal, and Greece – less than 30 days).
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Germany, Netherlands, Hungary, Spain, Romania, Bulgaria, Czechia 

This group of countries benefits from an extensive network of gas pipelines and sufficient storage capacity, much of which was originally designed for importing and storing Russian natural gas. Following Russia’s invasion of Ukraine, the existing infrastructure was repurposed to reverse gas flows, allowing countries previously dependent on Russia to import LNG or Norwegian pipeline gas.
Read more

Austria, Slovenia, Latvia, Slovakia 

The best performing countries share common high electricity capacity margins, gas stocks and gas infrastructure reliability. All four countries in this top group have either extensive nuclear or hydropower capacity. Both of these technologies have high capacity credits, meaning they can operate at close to their maximum potential during evening peak hours.
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Reliability Risk

This pillar evaluates a nation’s ability to withstand disruptions to its energy supply and maintain stable energy flows during crises. It evaluates the robustness of infrastructure (e.g. energy storage, electricity capacity margins and the reliability of gas infrastructure, measured as the share of daily gas demand that could still be covered if the largest piece of gas infrastructure should fail), the adaptability of demand (e.g. household energy efficiency) and the risks associated with over-reliance on single suppliers or vulnerable trade routes.
Read more

Luxembourg, Poland, Finland, Croatia, Ireland, Sweden 

The reasons for these countries’ high scores vary significantly from country to country, but are largely related to limited gas, power grid and storage infrastructure. However, high reliability risks are not always strongly correlated with higher geopolitical, affordability or sustainability risks, as neglecting gas infrastructure tends to result from the economy being less dependent on gas overall.
Read more

Belgium, Portugal, Lithuania, France, Denmark, Italy, Estonia, Greece 

Most of the countries in this group struggle with high risk scores associated with gas stocks and their gas infrastructure reliability. While the average EU gas storage levels in 2023 could cover 122 days of average natural gas demand, Lithuania, France, and Italy could only supply fewer than 90 days (Belgium, Portugal, and Greece – less than 30 days).
Read more

Germany, Netherlands, Hungary, Spain, Romania, Bulgaria, Czechia 

This group of countries benefits from an extensive network of gas pipelines and sufficient storage capacity, much of which was originally designed for importing and storing Russian natural gas. Following Russia’s invasion of Ukraine, the existing infrastructure was repurposed to reverse gas flows, allowing countries previously dependent on Russia to import LNG or Norwegian pipeline gas.
Read more

Austria, Slovenia, Latvia, Slovakia 

The best performing countries share common high electricity capacity margins, gas stocks and gas infrastructure reliability. All four countries in this top group have either extensive nuclear or hydropower capacity. Both of these technologies have high capacity credits, meaning they can operate at close to their maximum potential during evening peak hours.
Read more

Sustainability Risk

The sustainability risk pillar evaluates the environmental sustainability of national economies by assessing their carbon intensity, resource efficiency, and progress toward circularity. It captures both climate-related and material-based risks that affect long-term economic resilience and alignment with EU climate goals. The indicators span energy use and emissions, as well as environmental pressures from consumption and waste. These factors signal the degree to which economies are decoupling growth from environmental degradation.
Read more

Finland, Bulgaria, Estonia, Poland, Romania 

Countries with the highest sustainability risks tend to have economies that are still heavily dependent on energy, emissions and raw materials. Unsustainable consumption drives a high rate of material extraction, both domestically and abroad. This can harm plants, animals and fragile ecosystems. Meanwhile, high energy consumption and the resulting emissions can lead to air pollution-related illnesses and have long-term climate change consequences.
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Hungary, Lithuania, Luxembourg, Czechia, Greece, Latvia, Denmark, Slovenia 

The primary drivers of sustainability risks across this group of countries is the high energy and carbon intensity of their economies. The link between a higher standard of living and increased material consumption is a major factor for all of these states despite performing well on most other sustainability risk indicators.
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Ireland, Croatia, Portugal, Sweden, Slovakia, Germany 

The “low-risk countries” group demonstrates a steep decline in sustainability risks in recent years but many countries still have mixed results in terms of phasing out fossil fuels or reducing the carbon intensity of the economy.
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Spain, Austria, Belgium, Italy, Netherlands, France 

While this group generally benefits from advanced energy and climate policies, high levels of renewable energy and robust regulatory frameworks, each country has a unique sustainability profile, driven by its economic structure and historical energy mix. Overall, even these top performers often prioritize strong energy or emissions performance at the expense of material sustainability, or vice versa, highlighting the need for integrated policy approaches that link climate, energy, and resource strategies with the aim of achieving long-term sustainable economic development.
Read more

Sustainability Risk

The sustainability risk pillar evaluates the environmental sustainability of national economies by assessing their carbon intensity, resource efficiency, and progress toward circularity. It captures both climate-related and material-based risks that affect long-term economic resilience and alignment with EU climate goals. The indicators span energy use and emissions, as well as environmental pressures from consumption and waste. These factors signal the degree to which economies are decoupling growth from environmental degradation.
Read more

Finland, Bulgaria, Estonia, Poland, Romania 

Countries with the highest sustainability risks tend to have economies that are still heavily dependent on energy, emissions and raw materials. Unsustainable consumption drives a high rate of material extraction, both domestically and abroad. This can harm plants, animals and fragile ecosystems. Meanwhile, high energy consumption and the resulting emissions can lead to air pollution-related illnesses and have long-term climate change consequences.
Read more

Hungary, Lithuania, Luxembourg, Czechia, Greece, Latvia, Denmark, Slovenia 

The primary drivers of sustainability risks across this group of countries is the high energy and carbon intensity of their economies. The link between a higher standard of living and increased material consumption is a major factor for all of these states despite performing well on most other sustainability risk indicators.
Read more

Ireland, Croatia, Portugal, Sweden, Slovakia, Germany 

The “low-risk countries” group demonstrates a steep decline in sustainability risks in recent years but many countries still have mixed results in terms of phasing out fossil fuels or reducing the carbon intensity of the economy.
Read more

Spain, Austria, Belgium, Italy, Netherlands, France 

While this group generally benefits from advanced energy and climate policies, high levels of renewable energy and robust regulatory frameworks, each country has a unique sustainability profile, driven by its economic structure and historical energy mix. Overall, even these top performers often prioritize strong energy or emissions performance at the expense of material sustainability, or vice versa, highlighting the need for integrated policy approaches that link climate, energy, and resource strategies with the aim of achieving long-term sustainable economic development.
Read more

Read the full energy security assessments below

Very low risk

Spain, Austria, Belgium, Italy, Netherlands, France 

While this group generally benefits from advanced energy and climate policies, high levels of renewable energy and robust regulatory frameworks, each country has a unique sustainability profile, driven by its economic structure and historical energy mix. Overall, even these top performers often prioritize strong energy or emissions performance at the expense of material sustainability, or vice versa, highlighting the need for integrated policy approaches that link climate, energy, and resource strategies with the aim of achieving long-term sustainable economic development. 

The low sustainability risks in France and Austria are largely due to their clean electricity systems. France stands out with the highest share of non-CO₂ technologies in their electricity mix, thanks to its extensive nuclear power fleet, which significantly reduces its emissions intensity.  

Similarly, approximately 80% of Austria’s power comes from renewable sources, primarily hydropower. While Austria performs well on energy and emissions indicators due to the widespread use of renewables, its material footprint is higher than the EU average.  

The Netherlands and Italy lead on resource efficiency and circularity. They have the highest resource productivity in the EU (measured in euros per kilogramme), which helps explain their relatively low material footprints despite their high levels of GDP and private consumption. The Netherlands has the lowest material footprint and a very high circular material use rate, thanks to its ‘waste-to-resource’ policies and service-oriented economy.  

Italy also demonstrates strong circularity performance, with robust recycling systems and a tradition of effective waste management, reflected in its high circular material use rate. However, while these countries lead in material sustainability, they both face higher risks due to their reliance on natural gas-fired power plants, leaving them vulnerable to the adverse geopolitical and affordability effects of the energy crisis.  

Spain has a low material footprint and leads in terms of low waste per capita, which is likely due to its service-based economy, as well as its effective waste reduction campaigns. However, it lags behind in terms of circularity due to its fragmented regional waste systems and limited recycling infrastructure.  

Belgium has benefited from a slower-than-planned nuclear phaseout, enabling it to retain a large low-carbon share in the energy mix.

Low risk

Ireland, Croatia, Portugal, Sweden, Slovakia, Germany 

The “low-risk countries” group demonstrates a steep decline in sustainability risks in recent years but many countries still have mixed results in terms of phasing out fossil fuels or reducing the carbon intensity of the economy.  

Ireland performs well on energy and emissions intensity and has a low material footprint. However, its heavy reliance on gas plants creates a significant vulnerability. Ireland also has one of the lowest circular material use rates in the EU.  

Croatia, on the other hand, struggles with high energy and emissions intensity but benefits from a low share of coal and gas in its electricity mix, as well as a small material footprint and low waste production.  

Portugal shows a strong performance across most sustainability indicators, with its main weakness being a low circularity rate.  

Sweden has a similar profile to Finland, performing well on energy-related metrics but struggling with a high material footprint, a low circular material use rate, and high waste per capita, likely due to a combination of factors including high levels of resource extraction for domestic industries like mining and forestry, a strong reliance on imported goods, and a high standard of living.  

Slovakia faces challenges with energy and emissions intensity but excels in material use and has a high share of non-CO2 technologies in its electricity mix, thanks to its extensive hydro and nuclear capacity.  

Finally, Germany stands out in this group for its consistently strong performance across all sustainability risk indicators except the share of low-carbon technologies due to its continued reliance on both coal and gas power plants. 

Overview

The sustainability risk pillar evaluates the environmental sustainability of national economies by assessing their carbon intensity, resource efficiency, and progress toward circularity. It captures both climate-related and material-based risks that affect long-term economic resilience and alignment with EU climate goals. The indicators span energy use and emissions, as well as environmental pressures from consumption and waste. These factors signal the degree to which economies are decoupling growth from environmental degradation. Sustainability risks are also closely intertwined with geopolitical and affordability risks, as higher shares of renewables and more efficient material use tend to reduce exposure to imported fossil fuels and mitigate carbon-related cost pressures. 

As of 2024, the EU has reduced its net GHG emissions by 34% compared to 1990 levels, and Europe is on track to exceed 50% emissions cuts by 2030. However, this progress has been mainly from cleaning up the electricity sector. Decarbonizing sectors with more complex emissions sources, such as transport, buildings, and industry, remains a significant challenge.  Progress on reducing sustainability risks has been uneven across the EU. Western and Northern European countries with advanced renewable energy systems can focus on synergy-building across policy objectives, while Eastern and Southern regions may require stronger financial and structural support to mitigate the trade-offs between sustainability and affordability. Central and Eastern European countries generally experience higher sustainability risks due to a slower transition away from fossil fuels and persistent reliance on carbon-intensive industries. In these regions, natural gas has often become the default decarbonization pathway, which simply replaces one fossil fuel dependency with another. 

As the EU reduces its dependence on fossil fuels, it will need to import substantial amounts of critical metals and minerals for upscaling clean energy technologies. Many of these resources are concentrated in a few supplier countries including authoritarian states such as China, creating new energy security vulnerabilities. Ensuring a stable supply of these materials is now a foundational requirement for the EU’s clean energy transition and its broader economic security agenda. Meanwhile, effective waste management and circular economy practices are seen as strategic tools to help mitigate these risks. Scaling up reuse, recycling, and sustainable product design is essential to decouple economic growth from resource consumption.

Very low risk

Austria, Slovenia, Latvia, Slovakia 

The best performing countries share common high electricity capacity margins, gas stocks and gas infrastructure reliability. All four countries in this top group have either extensive nuclear or hydropower capacity. Both of these technologies have high capacity credits, meaning they can operate at close to their maximum potential during evening peak hours.  This is evident in their status as net exporters during these high-demand periods when neighbouring countries lack the necessary capacity or would need to switch on more expensive fossil fuel-fired power plants to cover their demand.  

However, Austria and Latvia’s heavy reliance on hydropower makes their energy systems vulnerable to extreme weather events like droughts, which is reflected in their higher risk scores for electricity capacity diversity. Slovakia, Latvia and Austria are the three top performers in terms of gas infrastructure reliability and all four countries are scoring exceptionally well on gas stocks. Austria, Slovakia and Latvia have some of the largest gas storage capacity in the EU which help cover not only domestic demand but also that of neighbouring countries like Germany, Italy, Poland and the Baltics. Slovenia also benefits from Austria’s gas storage facilities, but its reliance on this single source is a significant risk. Although Slovenia has interconnectors with Croatia and Italy, the one with Austria accounts for 72% of its total import capacity. If this pipeline were to fail, it would create a serious supply shock for Slovenia, resulting in one of the highest gas infrastructure reliability risks among these countries.  

Paradoxically, countries with robust gas infrastructure often fail to use it to reduce import risks, while states with weaker systems achieve greater supply diversification. Slovakia, Austria, and Hungary, historically central hubs in the Russian gas transit networks, have exemplified this disconnect. Despite their low gas infrastructure risks all three retain some of the highest natural gas import security risks because of their continued dependence on Russian gas via TurkStream, despite the underutilization of alternative supply options, such as Norwegian pipeline gas via Germany, LNG from Italy’s Adriatic terminals, or Croatia’s Krk LNG facility.

Low risk

Germany, Netherlands, Hungary, Spain, Romania, Bulgaria, Czechia 

This group of countries benefits from an extensive network of gas pipelines and sufficient storage capacity, much of which was originally designed for importing and storing Russian natural gas. Following Russia’s invasion of Ukraine, the existing infrastructure was repurposed to reverse gas flows, allowing countries previously dependent on Russia to import LNG or Norwegian pipeline gas.  

For example, Bulgaria and Romania now import natural gas via Greece, and Czechia receives Norwegian gas through Germany. However, Hungary has so far failed to use its access to extensive import and storage capacity to reduce its reliance on Russian gas. This demonstrates that even with a reliable gas infrastructure, the lack of political can prevent a more diversified and secure supply.  

A highly diversified electricity generation mix further lowers these countries’ risk scores. The exceptions are Germany and the Netherlands, where coal and natural gas, respectively, play an outsized role in their power sectors. In the other countries, a mix of fossil fuels, nuclear, hydro, biomass, wind, and solar diversifies the risks associated with sudden outages due to technical issues, fuel shortages, or weather events. Additionally, all of these countries have relatively high electricity capacity margins, with the notable exception of Hungary, which relies heavily on imports during peak hours. Imports from Slovakia, in particular, sometimes cover more than 20% of Hungary’s electricity demand.  

Finally, due to milder climates and higher rates of energy poverty, Spain, Romania, and Bulgaria have some of the lowest average household energy consumption in the EU, which reduces the overall strain on their energy infrastructure and further lowers their reliability risk.

Overview

This pillar evaluates a nation’s ability to withstand disruptions to its energy supply and maintain stable energy flows during crises. It evaluates the robustness of infrastructure (e.g. energy storage, electricity capacity margins and the reliability of gas infrastructure, measured as the share of daily gas demand that could still be covered if the largest piece of gas infrastructure should fail), the adaptability of demand (e.g. household energy efficiency) and the risks associated with over-reliance on single suppliers or vulnerable trade routes. These risks are particularly relevant in the context of increasing electrification, high volatility in natural gas supply and prices, and more frequent extreme weather events.  

While affordability risks are related to the cost of energy, reliability measures the consistency of energy supply. Its absence often only becomes apparent in moments of failure, such as blackouts, grid congestion, curtailment of renewables or slow restoration times after outages. The ECSRI reveals that, although most of the EU has improved system reliability since the early 2010s, risks persist and, in some cases, are rising again due to uneven investment in infrastructure modernization and digitalization. Countries with smaller populations or limited infrastructure tend to perform worse in this area, often due to geographical constraints or systemic dependencies on a single source of supply. Closing the reliability gap in Europe requires more than just building additional capacity. It is also about building smarter systems, integrating flexibility at every level and ensuring that institutional readiness matches technological ambition. Reliability is the foundation of Europe’s future energy economy: often invisible, but absolutely essential. The transition to a resilient, low-carbon economy depends on transforming grids from passive networks into dynamic, continent-scale platforms. Although challenges such as permitting delays and supply chain bottlenecks continue to persist, Europe’s progress demonstrates that strategic grid investments are not only mitigating risks, but also unlocking new frontiers of industrial innovation and cross-border prosperity.

Very low risk

Ireland, Denmark, France, Sweden, Finland, Luxembourg 

Electricity prices are generally lowest in EU countries where wholesale electricity prices are determined by renewables and nuclear power for most hours of the day. These countries also have some of the least energy- and emissions-intensive economies in the EU, thanks to a strong service sector, innovative industrial and building solutions, and advanced electrification. This results in very low CO₂ and overall energy costs relative to their GDP. 

Notably, Finland’s commissioning of the Olkiluoto 3 nuclear reactor in 2023, following years of delay and cost overruns, expanded domestic electricity supply and allowed for greater exports to Estonia and Latvia, helping to reduce prices in those countries as well.  Thanks to abundant nuclear, wind, hydro, and biomass generation, Finland, Sweden and Denmark consistently maintained the lowest electricity prices in the EU, demonstrating the long-term affordability benefits of low-carbon baseload generation and the importance of the rapid addition of new renewable energy plants to the system.  

France, in contrast, has benefitted from a more stable price environment, largely thanks to its nuclear fleet and a regulated power tariff system. While the cost of maintaining and upgrading the ageing nuclear infrastructure is rising, France’s relative insulation from the volatility of gas markets has kept its affordability risk score well below the EU average. Most of these countries are also amongst the top performers in terms of emissions intensity, resulting in some of the lowest CO2 costs in the EU in 2023. As most of the indicators are expressed relative to GDP, Luxembourg and Ireland naturally perform better than most countries, given that they have the highest GDP per capita in the EU with the biggest contributors to their economies being the financial, tech and pharmaceutical sectors, which exhibit relatively low emission intensity levels.

Low risk

Hungary, Germany, Slovakia, Belgium, Portugal, Austria, Spain 

Thanks to their ample nuclear energy capacity and/or the rapid growth of renewable energy sources, these countries have reduced their reliance on coal and gas, and they are now enjoying significantly lower energy and CO₂ costs than many of their European counterparts. They can also import cheaper electricity from neighbouring countries via extensive cross-border grid infrastructure, rather than having to turn on more expensive domestic peaker plants. 

In Hungary and Slovakia, for example, nuclear energy plays a crucial role in reducing emissions from power generation. Meanwhile, the aggressive build-out of renewable energy has been the primary driver in Germany, Belgium, Portugal, Austria and Spain. This reduced reliance on high-emission fuels directly translates into lower expenses linked to the ETS. These countries also benefit from lower overall energy expenditures relative to their GDP, as their economies are less energy-intensive, with the notable exceptions of Hungary and Slovakia.  The situation in Hungary and Slovakia presents a unique challenge. The stark contrast between capped retail electricity prices for households and higher, market-driven prices for businesses has led to a bigger fiscal burden.  

In contrast, Portugal and Spain have managed to keep overall electricity prices low without incurring such significant fiscal costs. The high share of renewable energy in the electricity mix, combined with the limited use of expensive coal and gas, has enabled them to provide affordable, clean electricity in a more sustainable way. 

Very low risk

Estonia, Finland, Denmark, Sweden 

In all four of these countries, natural gas makes up less than 10% of their gross inland energy consumption and, except for Denmark, the share of oil lies far below the EU average as well. Their electricity systems are well integrated and renewables in combination with nuclear power plants are often able to cover demand even during peak hours, while natural gas plays a negligible role in electricity generation. Likewise, most households rely on firewood, electricity or district heating instead of gas or oil boilers during the long winter months. District heating plants in in these countries primarily use a mix of biomass, waste incineration, and surplus or waste heat.  

The low dependence of their economies on fossil fuel imports has also shielded these countries from the far-reaching negative impacts of the affordability crisis that most other EU countries experienced.  Estonia completed the full replacement of Russian oil and natural gas imports in 2023. The country is now importing Norwegian and US natural gas through Finland and Latvia and oil from alternative sources such as Kazakhstan. Its access to the Inčukalns underground gas storage facility in Latvia has been vital to replace Russian natural gas with LNG from terminals in Finland, Lithuania and Poland. Denmark, with its robust wind generation, strong interconnections, and proactive investments in green hydrogen and grid flexibility, is charting a path toward full energy sovereignty. It also plays a key role in European wind turbine manufacturing, creating positive spill overs in terms of resilience. Finland is now sourcing 57% of its oil from Norway and the rest from Sweden, the UK, and the U.S. Its gas now comes almost exclusively from Norway and the U.S., thanks to the commissioning of the Inkoo FSRU. Moreover, Finland’s and Sweden’s domestic production of key raw materials – including nickel, zinc, copper, cobalt – has reduced their exposure to Chinese and Russian-controlled supply chains for low-carbon technologies.

Low risk

Luxembourg, Slovenia, Latvia, Poland, Croatia, France, Romania, Germany, Netherlands 

Countries in this group tend to perform well across most of the geopolitical risk indicators and have improved their security of oil and natural gas imports in 2023 by taking decisive action to decouple from Russia. Moreover, they were able to capitalise on the extensive network of interconnector pipelines at their disposal, along with ample LNG and storage capacity. Consequently, they were able to substitute Russian gas with Norwegian pipeline gas and LNG from the US and other markets. 

Despite the lack of EU sanctions on Russian natural gas, Germany, Slovenia, Latvia, and Romania fully ended direct gas imports from Russia in 2023, although Russian gas continues to flow to Germany indirectly via LNG terminals in Belgium and the Netherlands.  Slovenia, Latvia, Poland and Croatia are able to import natural gas from a highly diversified set of suppliers as they have access to sufficient LNG capacity, while Romania will soon become the EU’s largest natural gas producer with the Neptun Deep offshore project in the Black Sea. In 2023, natural gas imports made up only 5% of total natural gas consumption in Romania.

Very low risk

Latvia, Spain, Slovakia, Sweden, Denmark, Austria, France 

The energy and climate security profile of the countries in this group demonstrates the strong link between the improvement of sustainability indicators and the lowering of affordability risk. High shares of renewables in electricity generation and low energy and emissions intensities translate directly into lower CO2 costs, electricity prices and energy expenditures. In addition, they lead to the decline in the geopolitical risk exposure associated with fossil fuel imports. The policy-driven energy transition process means a more diversified power mix, and hence more reliable supply based on less volatile energy technologies.  

Low reliability risks are also a key factor in the low overall energy and climate security risk score of Latvia, Slovakia, and to a lesser extent Austria. These nations are well-integrated into the European gas and power grids and have access to ample gas storage capacity. The Index results also point to a common weakness among wealthier member states in this group: their relatively poor performance on material use indicators, such as the circular material use rate and the material footprint. While there has been a downward trend in these metrics for the wealthiest EU member states, the less developed EU countries see their material footprint increase as their economies expand.

Low risk

Ireland, Portugal, Slovenia, Germany, Finland, Netherlands, Luxembourg 

This group of countries face a lower exposure to geopolitical and affordability risks. This is partly the result of the decisive action taken by their national policymakers since the start of Russia’s war in Ukraine to phase out almost entirely Russian oil and gas imports. The lower vulnerability is also linked to their economies’ overall low dependency on fossil fuels, which reduces energy expenditures and reliance on imports.  

However, the more geographically isolated countries in this group often face higher reliability risks, as they often lack sufficient domestic electricity and gas grid and storage infrastructure and instead rely on neighbouring countries’ power and gas systems through interconnectors to meet their demand. As these countries are mainly EU member states, this does not pose a geopolitical threat. Yet, it does demonstrate the importance of cross-border infrastructure and efficient resource sharing for the level of EU’s energy security. Germany is part of this group not because of its reliability risks but because of the high share of coal-fired power plants in its power generation mix and the correspondingly high carbon costs for the economy. This is somewhat paradoxical considering that Germany is among the least energy and emissions-intensive member states.

High risk

Hungary, Croatia, Italy, Belgium, Romania, Estonia 

Although these countries experience similar structural vulnerabilities in their energy and climate security risk profile, the drivers are more diverse. Hungary, Italy and Belgium face high geopolitical risks, while Romania and Estonia exhibit higher sustainability risks, in particular in relation to their high material consumption and waste generation. All of these countries also faced a severe affordability crisis in 2023.  

Natural gas makes up a very high share in total energy consumption in Hungary and Italy compared to other EU member states which comes as a result of a misguided strategy that expanded the use of natural gas in the power, industry, and household sectors, all while predominantly relying on Russian gas. Italy cut this dependence down to 5% in 2023. Yet, rather than replacing it with supplies from Norway or the US, Italy increased imports from other authoritarian countries like Algeria and Azerbaijan. Belgium’s moderately high-risk stems from its large volume of imports of raw materials and renewable energy equipment in 2023, but also from its increased imports of Russian LNG. Contrary to the EU’s target to phaseout Russian natural gas imports, Belgium has actually expanded its purchase of Russian LNG since 2022.

Very high risk

Poland, Bulgaria, Greece, Czechia and Lithuania 

Very high-risk EU countries face a complex set of energy challenges, including high energy and carbon intensity. This not only creates significant sustainability issues but also fuels an affordability crisis and exposes them to geopolitical risks. The complex interplay of these risks stems from the knock-on effects of high energy and CO2 costs, which are driven by factors such as the soaring price of carbon allowances and tight natural gas supplies. Between 2020 and 2023, the average EU carbon price increased by over €40 per tonne, primarily due to a sharp reduction in the number of freely allocated allowances and a rise in natural gas prices which led to the increased use of coal for power generation and consequently a higher demand for emissions allowances.  

Countries such as Poland, Bulgaria and the Czech Republic, which are heavily reliant on coal power, have been particularly hard hit by these exorbitant energy costs. To mitigate the financial burden on households and businesses, their governments provided extensive subsidies. While this offered temporary relief, it resulted in significantly higher government spending. Despite these cost pressures, decarbonisation in the energy and heavy industry sectors in these countries has been slow. Many of these countries also struggle with gas storage. Poland and Bulgaria, for example, struggle with limited or delayed storage capacities. Poland’s gas storage capacity is insufficient to meet its growing demand, and a planned expansion of Bulgaria’s Chiren gas storage facility has been delayed and is currently under investigation by the European Public Prosecutor’s Office (EPPO). Greece has no underground storage facilities and relies solely on its LNG terminals for natural gas storage. These nations’ heavy reliance on fossil fuels also exposes them to significant geopolitical risks, highlighting the strong correlation between the index’s dimensions. In 2023, Bulgaria, Greece and Lithuania were particularly vulnerable due to their heavy reliance on crude oil and petroleum product imports from a small number of non-democratic countries, such as Russia, Kazakhstan, Saudi Arabia and Libya.

High risk

Hungary, Lithuania, Luxembourg, Czechia, Greece, Latvia, Denmark, Slovenia 

The primary drivers of sustainability risks across this group of countries is the high energy and carbon intensity of their economies. The link between a higher standard of living and increased material consumption is a major factor for all of these states despite performing well on most other sustainability risk indicators.  

Circularity remains a major challenge for these countries, with only Luxembourg and Czechia having circular material use rates above the EU average. A poorly developed circular economy combined with intense material use is likely to harm ecosystems and makes these countries more vulnerable in the future. Their need for a constant flow of new materials exposes them to geopolitical pressure from countries that may exploit these trade dependencies.

Very high risk

Finland, Bulgaria, Estonia, Poland, Romania 

Countries with the highest sustainability risks tend to have economies that are still heavily dependent on energy, emissions and raw materials. Unsustainable consumption drives a high rate of material extraction, both domestically and abroad. This can harm plants, animals and fragile ecosystems. Meanwhile, high energy consumption and the resulting emissions can lead to air pollution-related illnesses and have long-term climate change consequences. Higher material and energy consumption also tends to be associated with higher geopolitical risks in countries without significant domestic production, while higher emissions intensity is a leading cause of increased affordability risks. 

Bulgaria and Poland are typical cases, as their continued reliance on coal power plants, widespread use of carbon-intensive fuels for heating and industrial processes, and slow progress on the decarbonization of the transport sector present highly complex challenges requiring concentrated policy efforts in multiple areas simultaneously. As a result of their ongoing heavy reliance on fossil fuels, Bulgaria and Poland faced the highest affordability risks in the EU in 2023. Rising carbon prices and a reduction in the amount of freely allocated emissions allowances placed a significant financial burden on the energy and industrial sectors. In addition, households and businesses in both countries faced some of the highest energy expenditure relative to GDP due to rising oil, gas and electricity prices.  

Finland’s case shows that sustainability involves more than just decarbonizing the power sector. Although it performs well on indicators such as energy and emissions intensity and the proportion of electricity generated without CO₂ emissions, it also has the highest material footprint in the EU, the third-lowest circular material use rate and produces the most waste per capita. This is primarily due to the dominance of its highly material-intensive forestry and paper industries, as well as an active mining and metals sector, both of which contribute to high levels of raw material extraction and waste production. Additionally, a high standard of living drives up consumption and waste generation. The country’s harsh climate and vast distances also increase energy and material demands for heating, transportation, and infrastructure.  

The case of Romania highlights a trend seen in many Eastern European countries, where rapid economic growth is coupled with a significant increase in their material footprint. As these nations’ GDP per capita has risen to approach that of their Western European peers, their material footprint has often grown at an even faster rate. For example, between 2011 and 2023, Romania’s GDP per capita increased by 54%, but its material footprint grew by an even higher 69%, making it the second-highest in the EU in 2023.

High risk

Belgium, Portugal, Lithuania, France, Denmark, Italy, Estonia, Greece 

Most of the countries in this group struggle with high risk scores associated with gas stocks and their gas infrastructure reliability. While the average EU gas storage levels in 2023 could cover 122 days of average natural gas demand, Lithuania, France, and Italy could only supply fewer than 90 days (Belgium, Portugal, and Greece – less than 30 days). These high-risk scores stem from a combination of factors, including extensive gas consumption and limited domestic storage capacity.  

Similarly, while on average the EU could still cover over 550% of its average daily gas consumption if its single largest piece of gas infrastructure (an LNG terminal or pipeline) failed, the situation is different for Portugal and Estonia. Due to their dependence on flows from neighbouring Spain and Finland, respectively, they could only maintain gas flows at slightly more than 100% of their average daily consumption in such an event. Portugal has an LNG terminal but otherwise can only import natural gas from Spain. The Iberian Peninsula remains relatively isolated from the rest of the EU gas market, a structural issue that has more adverse security of supply effects on other EU countries as they cannot make use of Spain’s large LNG import capacity.

Very high risk

Luxembourg, Poland, Finland, Croatia, Ireland, Sweden 

The reasons for these countries’ high scores vary significantly from country to country, but are largely related to limited gas, power grid and storage infrastructure. However, high reliability risks are not always strongly correlated with higher geopolitical, affordability or sustainability risks, as neglecting gas infrastructure tends to result from the economy being less dependent on gas overall. Nevertheless, some of these countries’ reliance on a single or a few underwater pipelines in the North and Baltic Seas poses a security risk, given Russia’s recent activities in the region. 

Luxembourg’s high score is an anomaly as the country lacks significant domestic energy infrastructure, such as gas storage facilities and power plants, by design. Instead, the country relies on a highly integrated cross-border network with its neighbours, including access to gas storage facilities and LNG terminals in Germany, Belgium, and France. Consequently, large-scale domestic investment would be both inefficient and redundant.  

In contrast, Ireland’s high risk score is a direct consequence of its geographical isolation. As an island nation, it lacks gas storage and LNG import terminals and relies entirely on a single gas pipeline from the United Kingdom. This limited connectivity and lack of supply diversification make Ireland particularly vulnerable to external disruptions. Meanwhile,  

Finland’s risk profile is not the result of infrastructure gaps, but rather of its low electricity capacity diversity and margins, as well as its low household energy efficiency, the lowest in the EU. Combined with a long, cold heating season and reliance on firewood for heating, this drives up energy consumption and contributes to the country’s elevated risk score.  

Croatia’s high risk is driven by a combination of factors, including low electricity capacity margins and heavy reliance on volatile hydropower. The country’s generation capacity can barely cover its peak demand, which means that Croatia often relies on imports. With climate change causing more frequent droughts, its dependence on hydropower making up around 50% of its electricity generation – is a significant vulnerability.  

Finally, Poland stands out as a large economy with high reliability risks due to very limited capacity diversity. Coal still accounts for half of its total installed capacity, leaving its energy system vulnerable. Although Poland has improved its gas infrastructure by expanding its LNG regasification capacity and building a new pipeline connecting it to Norway, its gas stock risk actually increased in 2023, highlighting a continued vulnerability in its gas supply.

High risk

Lithuania, Greece, Croatia, Slovenia, Italy, Netherlands, Estonia, Romania, Latvia 

Rather than prioritizing the immediate expansion of renewables, many of these countries have doubled down on the expanded use of natural gas as a ‘bridge fuel’ for the transition in the power sector. The additional overreliance on natural gas for residential heating has led to major vulnerabilities.  

In Italy and the Netherlands, for example, natural gas accounts for almost 35% of total gross inland energy consumption, a level of reliance that is surpassed only by Malta. As a result, these countries saw some of the highest electricity prices in the EU in 2022 and 2023, while oil and gas import expenditures soared as countries sought to replace Russian pipeline gas with more expensive spot market purchases.  Similar to the ‘very high-risk’ category, Greece, Croatia, Slovenia and Estonia also face exorbitant carbon costs resulting from the high energy and emissions intensity of their economies. The Netherlands’ drastic increase in affordability risks, on the other hand, highlights the link between import dependencies and affordability risks. Its shift from domestic gas production to imported LNG resulted in the most significant increase in affordability risks among EU member states.  

The Baltic states, on the other hand, used the crisis to accelerate market reforms. Lithuania combined temporary price caps with long-term contracts for green electricity, thereby expanding local renewables while avoiding unsustainable fiscal burdens. Meanwhile, Estonia created a windfall tax framework for energy firms, channelling the higher budget revenues into grid upgrades and compensation for vulnerable consumers.

Very high risk

Poland, Bulgaria, Czechia 

The EU countries’ carbon and energy intensity are the strongest predictors of high affordability risks. Poland, Bulgaria and Czechia are particularly vulnerable because they generate a large proportion of their electricity from coal and have some of the most energy-intensive industrial sectors in the bloc. The surge in the EU carbon price, driven by the reduction of free emissions allowances under the “Fit-for-55” plan in combination with rising gas prices, has caused CO2 costs to soar in these three countries.  

Despite significant expansion of the renewable energy-based generation, particularly solar power, electricity prices for industrial consumers have surged to some of the highest levels in the EU. As a result, heavy industries in these countries are struggling to remain competitive. Total energy expenditures relative to GDP have also risen sharply, as oil and gas prices have skyrocketed and only incremental improvements of energy efficiency have been achieved. Even so, as the emissions from electricity generation in Bulgaria and Poland have peaked, Bulgaria recorded the largest reduction in affordability risks among all EU member states in 2023. The decarbonization of the power mix comes on the back of the rapid expansion in solar power capacity, growing by 79% between 2022 and 2023 and a further 31% in 2024. Between 2018 and 2023, Poland increased its installed onshore wind capacity by 55%, while its solar capacity increased 45-fold. The country is also planning to install 5.9 GW of offshore wind capacity by 2030.

Overview

The affordability risk pillar of the Index evaluates the financial strain that energy systems place on national economies, businesses, and households. It captures both direct and indirect affordability risks by assessing energy prices, import expenditures, and the broader macroeconomic burden of energy consumption. Together, these factors reveal how vulnerable countries are to energy-driven inflation, energy poverty, and competitiveness pressures. Countries with high affordability risks often also exhibit high vulnerability across the other index dimensions, reflecting the deeply interconnected nature of energy systems.  

For example, states who are heavily reliant on imported fossil fuels not only face the risk of authoritarian governments using energy dependencies as a geopolitical tool, but also the economic fallout of price volatility, as seen during the energy crisis. These spikes had a direct impact on consumers and industries, particularly in countries previously almost solely dependent on Russian gas and with limited options for short-term supply diversification or domestic production capacity, highlighting how geopolitical risks can rapidly amplify affordability risks. Initially stable between 2008 and 2019, affordability risks surged sharply from 2021 to 2023 due to soaring energy prices driven by post-pandemic economic recovery, supply disruptions, and geopolitical tensions, particularly involving Russian gas supplies. The average retail electricity price for households in the EU increased by more than 30%, with some countries seeing even sharper spikes. In contrast, electricity prices are generally lowest in the EU countries where renewables and nuclear power typically determine the average day-ahead price.

High risk

Bulgaria, Austria, Ireland, Lithuania, Czechia, Portugal, Spain  

These countries’ energy landscapes are characterised by a paradox of progress and vulnerability. Some nations have successfully diversified their energy supply chains, reducing their dependence on a single source of imports. This has been a key strategic objective since the energy crisis caused by Russia’s invasion of Ukraine. However, concerns remain over the security of their supply, given critical weaknesses in their infrastructure. Some countries are overly reliant on a few interconnector pipelines, while others lack sufficient gas storage facilities. This leaves them vulnerable to both short-term supply disruptions and long-term geopolitical instability. 

For instance, in 2023, Bulgaria had the second-highest oil import risk as the country was 100% dependent on Russian crude oil imports and its only refinery, also owned by a Russian company, controlled 90+% of the wholesale market.  The situation has rapidly changed since early 2024 when Bulgaria banned the imports of Russian oil, and has stopped buying Russian nuclear fuel for its Kozloduy power plant. Simultaneously, Bulgaria has a very low risk for raw material imports because it has substantial reserves of critical raw materials, particularly copper, which it extracts, refines, and exports to other EU member states.  

Ireland has one of the highest shares of natural gas in gross inland energy consumption – stemming from the deep penetration of gas boilers in the buildings sector – but remains entirely dependent on pipeline imports from the UK as it does not have an LNG terminal, while its oil and raw materials imports are more diversified.  

Austria has been slow to shift away from Russian gas supplies due to long-term contracts with Gazprom. Although Russian imports declined following the invasion of Ukraine, by 2024 they had recovered to account for 80% of Austria’s gas supply. A higher risk score for imports of raw materials, combined with a relatively high material footprint, further indicates a resource-intensive economy that relies on external suppliers to meet demand.  

Portugal and Spain remain exposed to risks associated with oil and gas imports, but are less dependent on raw materials imports as resource-light sectors like services make up a large share of their GDPs. 

Very high risk

Belgium, Greece, Hungary, Slovakia, Italy  

In 2023, the security of natural gas imports continued to be the primary risk factor in the geopolitical landscape. Despite the availability of alternative import routes, Hungary and Slovakia remain reluctant to reduce their imports of Russian oil and natural gas, citing security of supply concerns. Rather than using the time since the adoption of the REPowerEU plan to maximize alternative supply routes, they have aimed to entrench the Russian gas flows via the TurkStream pipeline, thus undermining the EU Roadmap.  

Italy is still the most gas-dependent economy in the EU despite having little to no domestic gas production. Despite largely phasing out Russian gas imports, Italy remains excessively dependent on a single supplier – Algeria – for almost 50% of its natural gas needs.  

Greece’s main vulnerability lies in its oil import dependence – one of the highest in Europe. Greece has also emerged as a critical enabler of Russian oil shipments through its vast fleet of tankers that have been moving around 20% of all Russian crude around the world.  

Belgium has increased its imports of Russian gas since 2022, becoming a key part of Russia’s strategy to replace pipeline with LNG exports to the EU. The country is also a unique EU case for its overreliance on the import of critical raw materials and equipment for renewable energy facilities. This could be also the result of the Belgian ports’ critical role as trading and import hubs for other EU countries.

Overview

The Geopolitical pillar assesses a country’s exposure to external geopolitical shocks based on its dependency on imported energy and raw materials. It captures vulnerabilities in oil, gas, and critical raw material supply chains, which are increasingly influenced by global market volatility and strategic competition. Key indicators include the security of petroleum imports, natural gas imports, and imports of raw materials and renewable energy sources (RES) components.  

Countries with more diverse energy sources and suppliers tend to face lower geopolitical risk, as they are less exposed to disruptions in any single supply route. While expanding renewable energy capacity helps reduce fossil fuel dependence, it also introduces new risks tied to the availability of critical materials for low-carbon technologies. As the green transition advances, securing stable, diversified, and geopolitically resilient supply chains for these inputs is becoming a central challenge to national energy security. In 2023, geopolitical risks in the EU sank to their lowest level in the 16-year period, covered by the Index. The continent’s historical reliance on authoritarian states for fossil fuel imports, particularly from Russia, has underscored systemic vulnerabilities highlighted by Russia’s annexation of Crimea in 2014 and the full-scale invasion of Ukraine in 2022. While geopolitical risks increased during these crises, the overall trend is a decrease in risk since 2008. As the EU continues to move towards more renewable energy generation and less reliance on fossil fuels from undemocratic regimes, this trend is expected to continue. The rapid decline in pipeline gas imports from Russia has shifted the structure of supply. LNG terminals across the continent have absorbed increased volumes from the United States, Norway, Qatar, and Algeria. Interconnection capacity has expanded. For the first time in decades, Russia is no longer the indispensable energy partner for Europe. 

General

The sharp deterioration in the EU’s Energy and Climate Security Risk Index (ECSRI) in 2021 and 2022 was the result of the extreme dependence on a single supplier, as well as the subsequent surge in energy prices caused by Russia’s decision to cut the gas supply to most EU countries. The slow pace of the energy transition exacerbated the security of supply crisis. Massive interventions by national governments as well as the gradual phaseout of Russian oil, gas and coal imports have significantly reduced these risks in 2023, but challenges in all four dimensions of the index (geopolitical, affordability, reliability, and sustainability risks) remain.

Across the continent, affordability risks has surged. Electricity and gas prices remain dramatically higher than global benchmarks. Despite more renewables being added to the system, marginal pricing rules still peg electricity prices to volatile gas markets. For households in southern and eastern Europe, energy bills now exceed pre-crisis levels by 40–70%. For industry, the consequences are more existential: plant closures, offshoring, and a new wave of job loss. Between 2021 and 2024, more than a million industrial jobs disappeared from Europe, not because of climate policy per se, but because of its incomplete implementation in an uncompetitive energy market environment.

System reliability, too, is splitting Europe in two. Wealthier countries with digitized, integrated grids in Northwest Europe are reinforcing supply resilience through demand-side management and diversified capacity. But in much of Central and Eastern Europe, outdated grids, inefficient district heating, and investment bottlenecks are leaving countries vulnerable. Here, the fear is not just affordability, but breakdown: of infrastructure, of public trust, of institutional capacity.

On sustainability, the picture is more mixed. Greenhouse gas emissions fell by 8% in 2023: a striking drop. But this was not the product of long-term technological change. It was the product of demand destruction. Industrial activity slowed, factories closed, energy consumption collapsed. Sustainability gains built on economic decline are fragile and politically unsustainable.

Europe’s energy crisis is not over but it is evolving. The continent may have reduced its exposure to Russian gas, but it has not yet solved the deeper conundrum: how to decarbonize in a way that enhances, rather than erodes, economic competitiveness. That challenge is no longer theoretical. It is now the defining test of Europe’s ability to maintain strategic autonomy in an age of global fragmentation.

Countries that dominate the technologies of the clean energy will shape global trade, value chains, and diplomacy. If Europe cannot produce these technologies competitively, or at scale, then it will not be able to lead on climate, or protect itself economically.

Methodology

The current geopolitical crisis has clearly demonstrated that Europe needs to put energy security at the top of its policy priorities and make sure that it stays there even after the peak of the crisis subsides. Clearly establishing energy security as a core element of the EU’s energy strategy and synchronising energy security priorities with decarbonisation and market integration and liberalisation policies is a crucial first step with implications for the medium-term and long-term policy objectives. It is essential to take this step as soon as possible to ensure the long-term consistency of measures and investments.
The process of achieving common European goals has been hindered by a policy ambition gap due to widespread energy sector governance deficits in a number of member-states. Evidence-based policy instruments to monitor member-states’ progress such as an Energy and Climate Security Risk Index (ECSRI), allowing for an objective, comparative assessment, could become an EU-wide instrument for policy convergence. By using the Index, the EU would be able to further and deepen coordination of national policies across sectors and policy areas on the back of a long-term political, financial and social commitment.

The ECSRI has four pillars, reflecting the four dimensions of energy security risks: geopolitical, affordability, reliability, and sustainability. The Index covers 39 individual risk indicators, based on thousands of data points. While these individual factors are distributed between the four pillars, they remain closely interlinked. For instance, global crude prices are reflected in the geopolitical dimension via the assessment of their volatility, as well as in the affordability dimension, as they are also included in the analysis of the level of energy expenditures. Similarly, oil and gas consumption has an impact not only on energy expenditures, but also on the overall energy intensity of the economy, as well as GHG emissions.

The Index allows policy-makers and experts alike to fully reflect on a wide spectrum of risks associated with the high reliance on fossil fuels, as well as the risk mitigation potential of decarbonisation policies. In addition, the reliability dimension captures the risks associated with the structure of the energy system and its ability to absorb potential shocks. This is measured through indicators such as energy efficiency of different economic sectors, the resilience of the electricity system (transmission losses, density of the electricity grid, etc.), and petroleum/natural gas stock levels.

The ESCRI can improve the understanding and transparency of the most important energy security and climate vulnerabilities faced by EU member-states based on data-driven policy action. It would help track the progress of European countries towards the diversification of supply sources, the liberalization of energy markets, the decarbonization of key economic sectors, as well as the improvement of energy affordability and energy system reliability. It will also monitor the impact of climate policies on key environmental and sustainability indicators.

A critical element of this instrument is a common assessment of the risks related to natural gas, oil and electricity imports based on (i) overall reliance on imports, (ii) diversification of the import sources, and (iii) the reliance on authoritarian states for imports. Such an assessment for the EU and several key Member States clearly reveals the strong increase of security risks since 2014. It also demonstrates the historically much higher risk exposure of Southeast Europe compared to the EU-level risk. From this perspective, reduction of natural gas demand, avoiding a natural gas lock-in, a phase out of coal in combination with massive renewable energy-based transition and a smarter, more resilient and integrated electricity system would be key policy actions to make the European energy system much more resilient. This would result in an overall reduction in energy security risks.

The ECSRI will rely mainly on Eurostat data, with additional metrics that are not available there coming from the US Energy Information Administration (EIA), the Pathways explorer developed by CLIMACT, and national statistical authorities. For the global factors in the Geopolitics pillar, which are the same for all countries, the ECSRI for Germany and Italy will use the indicators from the Index of U.S. Energy Security Risks developed by the The Global Energy Institute (GEI). In cases when the preferred data for a particular indicator is not publicly available and cannot be measured directly, proxy estimates will be developed.

The individual risk metrics are measured in different units, such as EUR per barrel for crude prices or toe per EUR 1000 GDP for the fossil energy intensity of the economy. To transform them into comparable indicators that use a common unit and can be assembled into an index, each risk metric is normalised by setting the value for the EU-27 in 2015 as 100. For each indicator, all values are measured in proportion to the base value for the EU-27 in 2015. Hence, the index reflects the relative risk compared to the average for the EU-27 and the change of the metric’s value over time. Hence, it measures the trend of the level of risk over time, as well as the relative risk level vs the EU-27.

The time period covered by the ECSRI is 2008-2021, reflecting key data availability in Eurostat. The choice of the base year, 2015, is intended to reflect the immediate aftermath of the Crimea crisis, as it is a key potential turning point and a missed opportunity for improving Europe’s energy security. It follows the collapse of global crude prices in 2014 and at the same the rise of a more aggressive Russia in the foreign policy domain. From this perspective, 2015 is when relatively low global crude oil and natural gas prices created favorable conditions for a ramp up of supply diversification efforts, while at the same time geopolitical signals should have incentivized European countries to make a U-turn on their foreign policy towards Russia. The use of 2015 as a base year will serve to highlight the strategic failures in Italy and Germany’s energy and climate security policies linked to Russia.