Will the Iran war threaten the EU’s green transition?

With rising energy prices and the threat of supply disruptions, the European Union is forced to strike a balance between staying on the path to neutrality and ensuring affordable energy for households and businesses across the bloc.

The EU’s plan to reduce carbon dioxide emissions and achieve climate change by 2050 is facing increasing pressure, as heads of state grapple with rising energy costs and inflation. Some member states are considering a return to coal in order to reduce the burden on consumers.

As long as tensions in the Middle East continue to increase – including the closure of the Strait of Hormuz, a key area from which about a quarter to a third of the world’s oil exports and a fifth of liquefied natural gas (LNG) – energy prices in Europe are expected to remain high.

Since the United States and Israel launched military strikes against Iran on February 28, gas prices in the EU have risen by around 70%, while oil prices have risen by around 60%. Analysts warn that even after the conflict ends, prices are likely to remain high for some time.

Despite the pressure, the EU insists it will stick to its green transition, arguing that reliance on fossil fuels leaves the bloc vulnerable to frequent shocks.

“We are doing everything we can to prevent this from happening again. We must double down on our path to energy independence,” Energy Commissioner Dan Jørgensen told MEPs in the European Parliament on 25 March.

From pricing to supply chain issues

Although the crisis is changing from a question of prices to one of potential supply shortages, Energy Commissioner Dan Jørgensen continues to advocate the case for a green transition after an emergency meeting of EU energy ministers on March 31.

Speaking at a press conference, he said that clean domestic energy, electrification, modern communications and improving energy efficiency “is the only way forward”.

Although EU countries remain free to choose their own energy mix, they are bound by general rules to achieve climate neutrality by 2050, which requires a sustainable reduction in greenhouse gas emissions.

Any measures to reduce investment in clean energy or renewable energy – or to rely on fossil fuels as a short-term solution to the worsening energy crisis – would risk colliding with the EU’s long-term climate goals.

German energy minister Katherina Reiche recently argued that the EU27 should consider easing its climate rules. He also proposed a temporary return to coal to end natural gas shortages and help lower electricity bills. This proposal was confirmed by Chancellor Friedrich Merz, who told an event in Frankfurt on March 27 that “we may need to keep our coal plants online for a long time”.

Meanwhile, the Italian government has announced a delay in the coal shutdown, pushing the deadline to 2038 and describing the move as a “defense” against gas shortages or price cuts.

However, Luca Bergamaschi, executive director of environmental think tank ECCO, said a return to coal is not possible.

He said: “Italy’s coal fleet is getting old and most of them are not working, with the recent limited funding. The plants have been idle for years.

Germany and Italy’s renewed reliance on coal is being made as a last resort to avoid the worst of the crisis, and Berlin and Rome are maintaining their long-standing commitments to clean energy.

Berlin recently joined the United Kingdom in increasing wind power investment in response to the crisis. Meanwhile, Italy has received approval from the European Commission to use 6 billion euros in public funds to expand renewable hydrogen production.

Despite the political problems, the EU continues to take a firm stance against opening the door to Russian fossil fuels as a temporary fix – an idea recently floated by Belgian Prime Minister Bart De Wever.

On March 30, the bloc warned member states to prepare for a “long-term disruption”, urging capitals to accelerate efforts to reduce oil and gas consumption.

The EU green road

Wind and solar energy are always much cheaper than natural gas and imported oil. In 2025, renewables cost around €24 per megawatt hour, compared to around €100 per megawatt hour for gas, according to EU data. However, these costs have increased significantly since the outbreak of war in Iran.

Since the energy crisis caused by Russia’s invasion of Ukraine in 2022, the EU has been arguing that large investments in renewable energy are the key to achieving greater energy independence.

However, the bloc still faces a long way to go before it can become fully self-sufficient in power.

Improving the European energy grid network is seen as an important step, helping to improve the flow of renewable electricity while reducing congestion and reducing shortages.

Jørgensen urged MEPs on March 25 to support “quick and determined agreement” on the Commission’s plan to modernize Europe’s network, speeding up the construction of “much-needed” infrastructure and connections.

Simone Tagliapietra, a senior figure at the Bruegel think tank, advised EU leaders not to slow down the low-carbon transition. He argues that the conflict in the Middle East shows that the deployment of clean, domestically produced energy sources should be accelerated.

“Only by reducing dependence on oil and LNG imports can Europe protect its economy from recurring crises,” said Tagliapietra.

Due to rising energy prices, the French government is accelerating the electrification of its economy and ending dependence on fossil fuels, Prime Minister Sébastien Lecornu said on Wednesday.

“The issue is no longer just about the climate, it is now affecting the interests of the country,” Lecornu said.

The government aims to reduce France’s dependence on fossil fuels from 60% to 40% by 2030, by electrifying transport and buildings, including the wider adoption of electric cars and heat pumps.

Spain and Portugal were protected from high prices

Spain and Portugal have been hailed as two good examples of how investing in renewables pays off in the long run for energy security.

Madrid and Lisbon are the most exposed to supply shocks, due to their heavy reliance on wind, solar and hydropower, which has kept electricity prices well below those in major European economies during the crisis.

Although the Iberian countries do not see an immediate increase in prices, they are still exposed to fluctuations in global prices, however the abundance of clean energy in their energy sources helps to protect them from astronomical electricity bills.

This situation gives more impetus to EU leaders to encourage member states to seek renewable energy, energy efficiency and electrification.

As part of efforts to speed up the flow of clean energy, Energy Commissioner Dan Jørgensen met with representatives from wind, geothermal and bioenergy – including biomass and crop-based energy – on March 27, while exploring ways to rapidly scale up heating and cooling systems while boosting industry competitiveness.

The European Commission is expected to present an updated energy security plan in the coming weeks, as well as an energy efficiency plan and a dedicated heating and cooling strategy.

“Bioenergy is now part of the solution across households, industry and district heating. When the EU establishes its next policy measures, that effective contribution should not be ignored,” a statement from the trade association Bioenergy Europe said.

Aneta Stefańczyk, industrial expert at the European Climate Neutrality Observatory and public policy analyst at the Reform Institute, said that expanding electricity and clean energy – while reducing dependence on imported fuels – should form the basis of Europe’s long-term policy.

“The current crisis in the Middle East highlights the importance of this approach, as rising oil and gas prices also expose the dangers of continued dependence on fossil fuels,” he said.