On May 18th a Joint Statement – the Malta Statement- was signed by the MED9 EU countries (Croatia, Cyprus, France, Greece, Italy, Malta, Portugal, Slovenia and Spain) to promote the Mediterranean as a Green energy Hub. Country representatives met in La Valletta to launch the project of a Mediterranean Green Energy Hub in order to accelerate the energy transition and to attract investments. However, despite the combined forces of the MED9 with their excellencies and expertise, the financial contribution of the EU Commission will be crucial to determine a satisfying outcome for the project. Several obstacles might arise such as geopolitical rivalries and internal difficulties of political and economic nature.
The Malta statement, the EU Green Deal and the Repower EU
The Statement presents a vision of the Mediterranean as a Green Energy Hub, particularly offshore renewable energy. It also underlines the importance of prioritizing investments in the renewable energy sector and of enhancing regional cooperation to enable the Mediterranean to become an excellency in the green energy sector. It also aims to strengthen cooperation with Northern African countries in the trade of renewable energy and in viewing solutions to common obstacles in the sector. Furthermore, the creation of a Mediterranean Green Hub would also ensure more stability in the region.
The Malta statement has been signed in a moment in which renewable energy is prioritised, despite the policy and technical difficulties, as the European Green Deal is boosting energy transition in the entire continent. In the wave of this trend, the Mediterranean countries aim at embracing new energy sources to be in line with the EU objectives and to create more jobs. Furthermore, it is well-known that Africa disposes of a considerable renewable energy potential, which if well-exploited could solve many of the continent’s social and economic issues. A cooperation on renewable energy and energy trade will be beneficial for both the EU9 and Northern Africa.
The Malta meeting took place on the anniversary of the REPowerEU plan, whose aims would be well-served in the accomplishment of the Statement’s goals. The REPowerEU plan views energy diversification and investing in renewables as two of their main actions to achieve energy independence. This plan is to be viewed in the aftermath of the energy crisis after Russia’s invasion of Ukraine and the urgency for Europeans to develop their own energy resources. This plan is funded with €72 billion in grants and approximately €225 billion in loans. Investing in the realization of green energy hubs like the one imagined by the MED9 would make the EU more independent and competitive in the international energy market.
The MED9 potential and EU geoeconomic goals
Despite the leading position of Northern Europe in the field of renewables, the MED9 also have an important series of tools to invest. These countries have a considerable expertise and many of their firms are highly specialised in this sector. Important examples are represented by the Italian Enel, the French ACTEAM and the Spanish Holaluz. A Mediterranean hub would represent a competitor to other green hubs in Europe and elsewhere, and an important step towards international climate and energy goals. A focus on renewable energy is likely to be supported by EU funds, increasing its attractiveness for the MED9, as these funds would support the most demanding projects, such as the construction of connections to facilitate energy corridors with Africa, like the one supported in 2022.
Particularly, Italy and France will have the chance to further develop their green energy excellency areas that will make them stand among their partners. Forecasts concerning the use of renewables are optimistic for both countries. According to the French Energy Transition Ministry, in 2028 renewables will represent 21 billion euros for the country’s economy. Furthermore, by 2030 Italy will occupy 55% of renewables in its electricity mix, becoming a renewable energy champion. The two countries have already cooperated on the renewable promotion in the G7 and other fora.
At the EU level, the perspective of a Mediterranean Green Energy Hub is highly attractive as it would fortify the Union in the energy sector, comply with international environmental goals, create new jobs in a worse-off region and promote internal cooperation. It is no surprise that EU institutions have strongly voiced their support for this project. According to the EU Commissioner Kadri Simson, the Mediterranean has played a crucial role in the 2022 energy crisis.
Cooperation with Northern Africa
Malta’s Minister for the Environment, Energy, and Enterprises, Miriam Dali, has declared that North Africa will play a crucial role in the deployment of renewables in the European Union and the same opinion was also shared by the EU climate chief Frans Timmermans in an interview with Euractiv. On the occasion of the Malta Statement, the EU Commission was indeed invited to explore options for funding to create interconnections between EU and non-EU countries in the Mediterranean. One can clearly view a common will from Northern African and European actors to cooperate to interconnect their economies and talents. Climate cooperation with Africa would also mean the accomplishment of 2 of the Green deal Pillars: namely trade and multilateralism.
More sustainability aimed investments towards the MED9 and Northern Africa will promote energy diversification, more employment, and economic and social stability. The two shores of the Mediterranean have already worked together under the Union for the Mediterranean Energy and Climate Action and the EU neighbourhood policy in the Southern Mediterranean. Further cooperation between the two Mediterranean shores also represents a way for the EU to influence the Northern African countries and leverage on matters such as migration and conflicts. As far as the turbulent situation in Libya is concerned, a renewable energy cooperation linked to a Green Energy Hub can be seen as a strategy to rebuild and modernize the country’s economy, which has already shown an interest in becoming a renewable energy exporter as in the Memorandum recently signed with Malta.
Geopolitical challenges
Considering the fact that a Green Energy Hub would mean a further step for the EU energy independence, one might suspect potential attacks and retaliation from external actors. Russian military forces are still present in Libya, which is one of the main partners in the green energy and renewables sector. The Russian forces might have a special interest in mapping and eventually even sabotaging energy sources in the likelihood of a conflict with the West. A similar scenario has been imagined in the North Sea, where Scandinavian authorities have launched an investigation concerning Russian ghost ships that have the potential to map submarine infrastructure and to strike it to neutralize entire countries. A similar scenario has been cause of concern also for the UK energy supplies.
Internal political challenges
A potential obstacle to the promotion of the Mediterranean as a Green Energy Hub might originate by a lack of interest by ruling political parties in the involved countries. It is the case of the Italian ruling coalition, ranked as the last political force in the country with concrete green energy ambitions. Beyond political trends or lack of policies and subsidies, a lack of trust from the EU and the decision to direct investments elsewhere is a serious threat to the realization of a Green Hub. The MED9 will have to prove their commitment to the project’s realization and its maintenance.
Economic challenges
Obstacles of economic nature would be a lack of funding from the EU, national funds directed to other sectors, a lack of trust among the MED9 and with the Northern African partners. According to Reuters, a lack of financing and a volatile regulation are the reasons why the solar and wind energy sectors are growing more in the US rather than in Europe. As far as EU investments are concerned, the worst that might happen is a poor result of the first investments directed to support the project. A suspicion that the funds might be ill-used or that the decision-makers might choose to invest in unrealistic projects might halt the investments flow and cause the slowdown or even the end of the project.
Scenarios
- Best. Win-win situation for the EU and for the Northern African countries as both sides can benefit from the Green Energy Hub, enhancing their status at the global level. More jobs are created and stability is ensured on both Mediterranean shores. Furthermore, the EU investments are well received and directed to reinforcing the Green Hub, which becomes an innovation attractor and economy booster. Finally, the MED9 are able to influence Northern African countries, stabilise the most turbulent areas and contain migration flows.
- Medium. Considerable improvement is achieved in the long run, despite the occasional disagreement between the MED9 and also with the Northern African countries. Occasional political instability in Northern Africa is also an obstacle to the Green Hub’s development, especially Libya. The Med9 make considerable progress in the sector but are not at the level of other energy hubs in the continent that keep receiving more EU funds.
- Worst. Political instability in Northern Africa complicates any agreement or cooperation with the MED9, who are also divided by internal disagreement caused by prioritizing national economic interests to common goals. A lack of trust by EU representatives poses a stop to funding and other green energy hubs receive more financial support. The initiated projects are tackled and eventually sabotaged by the Russians that want to prevent Europe from becoming more energy independent. Furthermore, the Russians also choose to provoke more migration towards the Mediterranean, which is not contained and this brings devastating political consequences.
