POLICY BRIEF GLOBAL AND REGIONAL ORDER THE INTERPLAY BETWEEN THE GREEN TRANSITION, GEOPOLITICS AND ENERGY SECURITY The changing energy landscape in Greece, Bulgaria and Serbia Dr Yiorgos Christidis July 2023 The energy landscape in Southeast Europe has been evolving, not only under the effect of global and EU goals of energy transition, but also from geopolitical considerations Natural gas continues to play a central role in the Greek economy and in the energy diplomacy that Athens has actively pursued in recent years Despite the prevailing scepticism in some European countries about the merits of enlargement to the Western Balkans, the benefits for the EU outweigh potential minuses. This is also true in the area of Green Transition.

GLOBAL AND REGIONAL ORDER THE INTERPLAY BETWEEN THE GREEN TRANSITION, GEOPOLITICS AND ENERGY SECURITY The changing energy landscape in Greece, Bulgaria and Serbia

Contents PREAMBLE ................................................................. 2 1 GREECE ...................................................................... 3 2 SERBIA ....................................................................... 5 3 BULGARIA ................................................................. 7 RECOMMENDATIONS .............................................. 9

FRIEDRICH-EBERT-STIFTUNG – THE INTERPLAY BETWEEN THE GREEN TRANSITION, GEOPOLITICS AND ENERGY SECURITY PREAMBLE Combating climate change is recognised as a fundamental priority for the planet. The Paris Climate Agreement in 2015, signed by no fewer than 197 states, set the goal of limiting global warming to 1.5–2°C compared with 1850, by reducing greenhouse emissions, primarily caused by fossil fuels (such as coal, oil and natural gas). Following suit, the EU agreed to a binding 40 per cent reduction in greenhouse gas emissions by 2030 and to become climate-neutral by 2050. The EU has also played a central role in enabling and accelerating the energy transition in Southeastern Europe, as four states in the region are members of the EU, while the Western Balkans countries aspire to join the Union. Despite its urgency, however, the energy transition is being challenged by a multitude of factors. Thus, there has always been an accompanying concern that instability in the EU’s neighbourhood»could involve the risk of an excessive securitisation of the project, whereby climate and environmental targets could be marginalised and priority is given to the exploitation of fossil fuels«(Siddi 2016: 139). This concern became acute following Russia’s invasion of Ukraine in February 2022. Therefore, the question of safeguarding energy security(in terms of both access and cost) has always been of the utmost importance to governments everywhere, including Southeastern Europe. As a result, the energy landscape in this region has been evolving, not only under the effect of global and EU goals of energy transition, but also from geopolitical considerations and short-term concerns over safeguarding energy security and dealing with the economic and social costs of decarbonising economies. This brief analysis concentrates on three southeastern European countries, Bulgaria, Greece and Serbia, examining some of the energy dilemmas they face and the energy policies they are pursuing, in relation to the imperative of combating climate change effectively. 5

Greece 1 GREECE Greece has been making substantial progress in terms of meeting the EU climate change targets by phasing out lignite from electricity production and increasing the share of renewable energy sources(RES) in its energy production mix. Thus, by October 2021 the share of renewable energy sources in Greek energy production had risen by 36 per cent, while that of lignite had fallen to 11 per cent(Deloitte, cited in Sokou, May 2022: 7). And although the recent rise in energy prices forced the Greek government to extend the operation of old lignite plants until 2025, it still plans to phase out lignite from energy production by the end of 2028(Sokou, May 2022: 8). Natural gas, however, continues to play a central role in the Greek economy, accounting for 47 per cent of the national energy mix in October 2021(Deloitte, cited in Sokou, May 2022: 7). It also plays a central role in the energy diplomacy that Athens has actively pursued in recent years. One notable example, closely connected to Greece’s wider foreign policy concerns, is the so-called EastMed pipeline. In January 2020, Greece, Cyprus and Israel signed an agreement for the construction of a pipeline, aimed at carrying between 9 and 12 billion cubic meters of gas from the gas fields of Cyprus and Israel to Greece, and from there eventually to other destinations in Europe, such as Italy. The future of the project became increasingly uncertain, however, as it obviously did not correspond with the professed goal of moving away from fossil fuels. Thus, the European Commission made its final support for the EastMed project conditional upon»its commercial viability and its ability to contribute to the EU Green Deal goals«(cited in Mihalopoulos, 5 April 2022). In addition, the US State Department announced in January 2022 that»we are shifting our focus to electricity interconnectors that can support both gas and renewable energy sources«, making it clear that it no longer supported the construction of the EastMed pipeline(cited in Mihalopoulos, 10 January 2022). Natural gas has also been central to the development of energy infrastructure in northern Greece, closely connected to a developing regional connectivity. Alexandroupolis, a port city located in the northeastern corner of Greece, has been emerging as a major energy hub not only for Greece, but potentially for southeastern Europe, with Washington’s and Brussels’ support, as the former has emerged as the second largest source of liquefied natural gas(LNG) imports to Europe after Norway, 1 while both are seeking to diversify energy imports away from Russia. The so-called Alexandroupolis Independent Natural Gas System(INGS) comprises an offshore floating unit for the reception, storage, and re-gasification of LNG and a subsea and onshore gas transmission pipeline. The inaugural ceremony for the construction of the LNG terminal took place in May 2022, attended by Greek Prime Minister Kyriakos Mitsotakis, European Council President Charles Michel, Serbian President Aleksandar Vucic, the Prime Minister of Bulgaria, Kiril Petkov, and the Prime Minister of North Macedonia, Dimitar Kovacevski, underlining the European and regional importance attached to the project. The new terminal, planned to be constructed by the end of 2023, will be located at a distance of 17.6 km southwest of Alexandroupolis and would have the capacity to connect with and transmit gas to other gas transmission systems, such as the Greek National Natural Gas System, the Trans Adriatic Pipeline(TAP) and the natural gas Interconnector Greece-Bulgaria(IGB). It will have a send-out capacity of 700,000 cubic meters of gas per hour or 6.1 billion cubic meters of gas per year and a storage capacity of up to 170,000 cubic meters of LNG(Kokkinidis, 3 May 2022). EU finance is central to the construction of the LNG terminal, through the European Structural and Investment Funds that Greece has access to, while in June 2021 the European Commission approved 166 million euros(€) for the project(Pekic, 17 June 2021). Alexandroupolis INGS would eventually be connected to an existing and developing network of pipelines in northern Greece. As already mentioned, TAP(in operation since November 2019) crosses northern Greece into Albania, ending up in Italy, while Greece and Bulgaria have also completed the new natural gas interconnector, IGB, inaugurated in July 2022. The 182 km, 249 million euro pipeline enables Bulgaria to import natural gas supplies through Greece, reducing its dependence on Russian natural gas.»The pipeline, along 1 As of December 2022 US LNG exports bound for Europe and the United Kingdom had increased to more than 42 per cent of total LNG imports into Europe. In November 2022 a renewed EU–US agreement for energy security»implies that Europe will seek up to 147 bcm of LNG imports in 2023. Though this target is roughly double the lost Russian pipeline supply(77 bcm in 2022) Europe exceeded it with 159 bcm of LNG imports«(Palti-Guzman, Majkut, Barlow 2023). 6

FRIEDRICH-EBERT-STIFTUNG – THE INTERPLAY BETWEEN THE GREEN TRANSITION, GEOPOLITICS AND ENERGY SECURITY with the other energy infrastructure projects that are underway, and together with the interconnections with North Macedonia, with Italy, constitutes a reliable natural gas distribution network for the markets… They thus enhance the energy security, the security of supply, for all the associated countries«, said the Greek Prime Minister at the inauguration ceremony(cited in Enterprise Greece, July 2022). More recently, in February 2023, Athens and Sofia signed two more agreements on energy cooperation. The first concerns the construction of an oil pipeline between Alexandroupolis and the port city of Burgas in Bulgaria, an old idea resuscitated in a»reverse flow«. 2 The second agreement concerns the storage on behalf of Greece of natural gas in Bulgarian storage facilities 3 and, at the same time, corresponding amounts of LNG storage at Revithoussa near Athens on behalf of Bulgaria(Belos, 16 February 2023). Fossil fuels, such as natural gas and oil, also figure in a developing energy relationship between Greece and North Macedonia. Following the signing of the Prespa Agreement in 2018, Greece and North Macedonia have been looking forward to developing their cooperation in the energy sector with Washington’s backing(Sokou, May 2022: 17). Although at present there is no interconnection between Greece’s and North Macedonia’s gas systems, an initial memorandum for the construction of a gas pipeline was signed back in October 2016, by DESFA(Hellenic Gas Transmission System Operator) and North Macedonia’s state-owned Energy Resources Utilisation Corporation(MER JSC). DESFA has already been granted conditional approval for a ten-year development plan covering 2017 to 2026, which includes the construction of the gas pipeline from Nea Mesimvria in Thessaloniki to Gevgelija in North Macedonia. In July 2021, Athens and Skopje signed the agreement for the construction of the gas interconnector, budgeted at around€110 million(ecozen.gr, 9 July 2021). Furthermore, in December 2021 the European Investment Bank announced that it would provide€28.4 million finance for the construction of the project(makthes.gr, 28 December 2021). The new gas interconnector, once completed, would connect North Macedonia with TAP. North Macedonia has also expressed an interest in participating in the construction of the LNG terminal in Alexandroupolis, as well as in the planned building of a power plant near Alexandroupolis that will operate on LNG(Analytica& ELIAMEP 2020: 57–58). There are also renewed discussions concerning the reactivation of the Thessaloniki–Skopje oil pipeline. Back in July 2002, a 213-km oil pipeline with a capacity of 2.5 million tonnes per year was officially launched, connecting the oil storage facilities at the Greek port of Thessaloniki with the biggest oil refinery outside Skopje. At the beginning of 2013, however, the refinery was shut down and the pipeline ceased operations. It has been inactive since then. In April 2019, following ratification of the Prespa Agreement, the Greek and North Macedonian sides were in talks with each other to make sure that the pipeline»will reopen in the coming months«(Analytica& ELIAMEP 2020: 55–56). Although the pipeline hasn’t restarted yet, there is a new»geopolitical urgency« for getting it working again and even its expansion further north, potentially connecting northern Greece with Serbia and even Pristina in Kosovo(Reporter.gr, 4 Ιουνίου 2021). More suitable to the goals of energy transition away from fossil fuels are two other regional projects involving Greece. The first is the so-called Greece–Africa Power Interconnector, a project that will connect Egypt’s North African coast with the island of Crete, transferring electricity, produced by renewable energy sources, from Africa to Europe through Greece. Washington has also expressed its support for a proposed EuroAsia interconnector, linking the Israeli, Cypriot and Greek electricity grids(Sokou, May 2022: 24). Both projects enjoy US support(Sokou, May 2022: 24), and they have also received European backing: the EuroAsia Interconnector is supported politically and financially by the European Commission(European Commission, 14 October 2022), while the Greece–Africa Interconnector is set to be listed among the European Projects of Common Interest, facilitating its funding(Kathimerini, 23 March 2023). 2 The idea of building an oil pipeline between Burgas and Alexandroupolis is an old one, going back to the 1990s when the idea was born as a means of carrying Russian oil, bypassing the Turkish straits. In March 2007 Greece, Bulgaria and Russia even signed a trilateral agreement on the construction of the pipeline. However, the idea never materialised as Sofia cancelled its participation in December 2011, citing»environmental and supply concerns«. For the project and its evolution see for example Y. Christidis,»The development of post-Soviet Greek-Russian relations«, in Русия, Европа и светът. Сборник с материали от международната научна конференция ( София , 28-29 септември 2009 г .). Съставител и научен редактор: проф. д-р Искра Баева. Университетско издателство “” Св . Климент Охридски ”, София , 2012, pp. 461473. 3 It should be noted that Bulgaria is the only other country in southeastern Europe, besides Croatia, that has the resources to store natural gas in underground storage, at the underground storage facility at Chiren, which has a capacity of 550 million cubic meters and can cover about 20 per cent of the country’s annual consumption. Sofia has announced that its gas storage facility will double its capacity with EU finance(Nikolov, 30 January 2023). 7

Serbia 2 SERBIA All six countries in the Western Balkans are signatories of the Energy Community Treaty 4 and at the same time aspiring EU members. This means that»they have to follow EU rules and regulations« as far as energy is concerned(PEET, September 2021: 3). The six Western Balkan countries have also signed, in November 2020, the so-called Sofia Declaration on the Green Agenda for the Western Balkans, formally aligning themselves with EU climate law and thus committing themselves to decarbonising their economies by 2050. 5 There are, however, important questions related to the degree of implementation of EU rules and regulations, including in the energy sector(see PEET, September 2021). The region’s full integration into EU structures is still incomplete, as its EU accession process has faced varying degrees of difficulties and delays. This has also allowed competitors, such as Russia and China, to either maintain or strengthen their presence in some areas – in energy in the case of Russia, and in mining or infrastructure works in the case of China. 6 Serbia has in principle committed itself to meeting the targets of the EU Green Agenda. It faces a number of important challenges related to a multitude of factors, however. These involve its current energy mix and energy policies. Serbia has the second most coal-dependent power supply in the Western Balkans, 7 with more than half(53.5 per cent) of its installed electricity generating capacity in 2019 based on coal plants, while the share of renewables in electricity production is extremely low, standing at around 5 per cent in 2019 4 The Energy Community is an international organization that brings together the European Union and its neighbours in the Western Balkans and the Black Sea region, seeking to create an integrated pan-European energy market. It was founded in October 2005 in Athens and its key objective is to extend the EU internal energy market rules and principles to member states of the community on the basis of a legally binding framework. https://www.energy-community.org/aboutus/whoweare.html 5 For the text of the Sofia Declaration on the Green Agenda for the Western Balkans, see file:///C:/Users/Admin/Downloads/Leaders%20 Declaration%20on%20the%20Green%20Agenda%20for%20 the%20WB.pdf 6 For China’s presence see, for example, Anastas Vangeli(ed.)»The Role of China in Southeast Europe«, Friedrich-Ebert-Stiftung, June 2022, https://library.fes.de/pdf-files/bueros/athen/19416.pdf 7 Coal remains critically important in electricity production in the Western Balkans. For example, compared with the EU average, the Western Balkan countries consumed 2.3 times more coal, while the share of gas is 50 per cent lower(Turcalo 2020: 4). (PEET, September 2021: 139). Another fossil fuel, natural gas, is crucial for heating in Serbia, where it is responsible for over 80 per cent of the heat from centralised heating plants. Russia has a dominant position in the import of gas into Serbia and an important one in oil – around 74.5 per cent of Serbia’s oil consumption in 2019 was covered by imports, primarily from Iraq and Russia(PEET, September 2021: 139). Russian fossil fuels reach Serbia through a network of pipelines: oil pipelines connected to terminals on the Croatian coast and, in the case of gas, pipelines coming from the east, the most important being the so-called Turkish or Balkan pipeline, connecting Serbia to Turkey, through Bulgaria, carrying Russian gas. The import of Russian fossil fuels(natural gas and oil) makes up the bulk of Serbia’s trade relations with Russia, while Russian investments in Serbia are concentrated in the energy sector. 8 In May 2022, Serbia even concluded a new three-year supply contract with Russian energy giant Gazprom, securing deliveries through the winter of 2022–2023 at advantageous prices(Bechev 2023). For Belgrade, energy ties to Russia are»a matter of necessity«(Bechev 2023) and together with Russian diplomatic support on the issue of Kosovo have until recently constituted the backbone of Serbian–Russian relations. Since the Russian invasion in Ukraine, however, Belgrade has been forced to examine ways of diversifying its energy imports 9 and lessening its dependency on Russia. It has to date not done so in ways that will accelerate its energy transition towards renewables, however. The Serbian government has announced that once its current three-year deal with Gazprom expires, it will be negotiating the import of gas from Azerbaijan and LNG producers(Bechev 2023). Belgrade is seeking to obtain liquefied natural gas from LNG terminals in 8 For example, it is estimated that between 2005 and 2013 alone Russia invested€598.4 million in Serbia, most of which was in the gas and oil sectors, acquiring Beopetrol and a majority interest in the Naftna Industrija Srbije oil company(NIS)(Turcalo 2020: 9). 9 Although Serbia did not introduce any sanctions on Russia, the sanctions imposed by Brussels have affected Russian energy imports to Serbia. Thus, when the EU imposed a full embargo on seaborne Russian crude oil in early October 2022 it meant that the decision would cut supplies to Serbia linked to terminals on Croatia’s Adriatic coast. The EU decision was not welcomed by Belgrade, but Serbia had no other choice: the Serbian government announced that starting on 1 November 2022 the Serbian Oil Industry(NIS) will only be importing non-Russian oil(FoNet: 6 October 2022). 8

FRIEDRICH-EBERT-STIFTUNG – THE INTERPLAY BETWEEN THE GREEN TRANSITION, GEOPOLITICS AND ENERGY SECURITY Greece and Turkey, and in particular Azeri gas. For that purpose, a new gas interconnection is being build between Serbia and Bulgaria, a 170-km pipeline between Novi Iskar in Bulgaria and Nis in Serbia. The construction of the Serbian segment of the interconnector started in February 2022, while Bulgaria started the construction of its segment in February 2023. The new gas pipeline is financed by the EU: the Serbian part is worth€85.5 million, of which€25 million is covered with a loan from the European Investment Bank, €49.6 million is a European Union grant and the remainder is provided by the Serbian government and Srbijagas( Balkan Green Energy News, 1 February 2023, also bne IntelliNews, 2 February 2023). Serbia’s President Aleksandar Vučić has expressed hopes that the construction of the gas interconnection would be finished by October 2023 and that his country would receive the first volumes of gas by the end of the year ( Balkan Green Energy News, 1 February 2023). Serbia’s energy diplomacy»complements« policy choices that the country is making internally, not serving the needs of the energy transition. Thus, not only has there been no serious planning to increase the share of renewables in the country’s energy mix (especially in heating), but the Serbian government remains committed to spreading the gas network in Belgrade and other big cities, while it is also financing and planning new coal plants, with notable Chinese involvement(PEET, September 2021: 149). The EU is obviously critically important not only in facilitating Serbia’s gradual distancing from Russian energy dependency, but also in the transition away from fossil fuels. An example in that direction is Serbia’s inclusion in the Trans-Balkan electricity transmission corridor, the fourth section, connecting the electricity transmission systems of Bosnia and Herzegovina, Montenegro and Serbia with Croatia, Hungary, Romania and Italy. 10 In January 2023 the Serbian government announced that it had signed a grant agreement of€8.5 million with Germany’s KfW for implementation of the fourth section of the Trans-Balkan electricity transmission corridor(Energo – CEE/FSU Power, 23 January 2023). In addition, on 14 February 2023 the European Commission announced that a financial agreement for the energy support package from the EU to Serbia, worth€165 million, had been signed, helping» the energetic safety of Serbia… and also the green transition«(Jelisavac, 15 February 2023). 10 In 2019, a submarine power link between Montenegro and Italy was brought into operation(Nuttall 30 January 2023). 9

Bulgaria 3 BULGARIA Bulgaria, an EU Member State, has been severely criticised for its approach to decarbonisation. As of 2019 the three main sources of electricity generation were coal plants(34 per cent), hydro power(25 per cent) and nuclear power(15.6 per cent)(PEET, September 2021: 53). Natural gas is used primarily in heating(more than 60 per cent in 2019). The share of renewables in Bulgaria’s energy production mix stood, in 2020, at 21.5 per cent(PEET, September 2021: 58). Until February 2022, Russia was Bulgaria’s main energy partner, as the country imported almost 100 per cent of its natural gas, nuclear fuel, and crude oil from there. The war has forced Bulgaria to look for ways to reduce its energy dependency on Russia, but not away from fossil fuels; it’s more the case that Sofia is looking for alternative sources of natural gas and crude oil. Thus, as already mentioned, Bulgaria has become connected to TAP through the natural gas Interconnector Greece–Bulgaria that recently became operational. On 3 January 2023 Bulgaria’s main gas operator, Bulgargaz, also signed a new energy agreement with Turkish state energy company BOTAS, a 13-year deal for the transit of 1.5 billion cubic meters of natural gas per year from Turkey to Bulgaria (Nikolov, 4 January 2023). This agreement has raised serious concerns about its compatibility with certain EU regulations, however. 11 While, as mentioned earlier, Sofia also recently signed a preliminary agreement with Athens for the construction of an oil pipeline between Alexandroupolis and the port city of Burgas. Bulgaria has received the strongest criticism in relation to phasing out coal from electricity production, however. The EU energy transition had already led to a fall of 8 per cent in electricity generation from coal power plants in Bulgaria by mid-2019, compared with the previous year. The corresponding figure for the EU was 19 per cent(KlimaPolitika 2020: 4–5). The pandemic brought about a further significant decrease in electricity generation from coal plants: the change in average coal and lignite fired generation compared with 2019(which was already reduced compared with 2018) was 11 The European Federation of Energy Traders has»drawn the attention of two Directorates-General of the European Commission – those for Competition and Energy – to possible unlawful state aid and abuse of monopoly power in the Botas-Bulgargaz contract, which governs access to transmission capacity at the Strandja-1/Malkoclar interconnection point(IP)«(Vassilev, 8 February 2023). close to 12 per cent for Bulgaria(KlimaPolitika 2020: 6). The risk of job losses and lack of political support for closing down coal plants, however, have undermined decarbonisation targets in Bulgaria(KlimaPolitika 2020: 9, also PEET, September 2021: 60). A notable example is the Maritsa Basin where there are over 10,000 active coal miners. Most major political formations in Bulgaria»argue that coal is part of Bulgarian independence, and the 10,000 highly educated engineers in the coal regions would lose their jobs«(Nikolov, 7 April 2023). The issue of job losses in the coal sector has emerged as a politically sensitive issue in Bulgaria, as well as elsewhere in the region, for example, in Romania, which has to be addressed adequately. Otherwise it threatens to undermine public support for the whole decarbonisation policy. Thus, it is recognised that»long term support will be needed… in the form of unemployment benefits, early retirement, or support for reskilling and job matching as well as for the economic development of impacted regions«(KlimaPolitika 2020: 9). An additional factor complicating decarbonisation policies is the fact that following Russia’s invasion of Ukraine in February 2022,»old coal power plants have become very profitable. Bulgaria earned€3 billion from exporting electricity from the power plants that were previously on the verge of bankruptcy and relied entirely on state subsidies. It also made the country the second largest exporter of electricity in the EU and helped neighbouring Balkan countries with energy imports. Profitability has become a strong political argument for keeping coal even as electricity prices fall and plants begin to run unprofitably again«(Nikolov, 7 April 2023). Bulgaria’s National Energy and Climate Plan(NECP) states that it»intends to reach a balanced mix of different national and imported energy sources, and that it aims at making an efficient and environmentally sound use of local energy sources, mainly lignite. It also intends to include new nuclear sources in the energy mix after 2030«(the Ministry of Energy and the Ministry of the Environment and Water of the Republic of Bulgaria, 2020, cited in KlimaPolitika 2020: 5). Its National Energy and Climate Plan has been criticised, however, for»avoiding specifying any coal phase-out date«(PEET, September 2021: 56). Bulgaria does not have a clear timetable for decommissioning coal power or developing renewables on land and offshore wind farms in the Black Sea(Constantsa Rangelova, senior energy analyst, Center for the 10

FRIEDRICH-EBERT-STIFTUNG – THE INTERPLAY BETWEEN THE GREEN TRANSITION, GEOPOLITICS AND ENERGY SECURITY Study of Democracy, cited at Nikolov, 7 April 2023). Sofia’s reluctance to implement the necessary energy reforms, however, is proving not only environmentally damaging but also costly. Bulgaria has already lost€100 million from the Just Transition Fund, while it risks losing another€10 billion (Nikolov, 7 April 2023). 11

Recommendations RECOMMENDATIONS i. Greece should accelerate its transition to renewables and reduce its dependence on fossil fuels and in particular natural gas, although admittedly it has made more progress than other countries in the region. The imperative of accelerating the energy transition concerns all governments in southeastern Europe, as well as societies at large, which must change their energy policy»mind set«, treating climate change as an»existential threat«, accelerating the decarbonisation of their economies and the transition to renewables. Such a change involves difficult decisions, ranging from budgetary policies(moving investment away from fossil fuels to renewables and updating energy infrastructure), to energy consumption patterns and energy diplomacy. One could also validly question the environmental wisdom of putting fossil fuels at the heart of energy diplomacy. ii. The Greek government in principle supports Western Balkan accession to the EU. But it should be more actively engaged in lobbying for this, on the example of other states, such as Austria. Despite the prevailing scepticism in some European countries about the merits of enlargement to the Western Balkans, the benefits for the EU outweigh potential minuses. This is also true in the area of Green Transition. Enlargement will not only limit the space for EU competitors to influence energy policies in the Western Balkans in a direction that is not compatible with the targets of the Green Transition, but it will also provide the Western Balkan states with more – financial and other – instruments to accelerate their Green Transition in key areas such as upgrading their outdated energy infrastructure in order to be able to accommodate renewables. iii.Transition towards renewables is socio-economically costly, affecting the labour market and whole regions. This applies also to Greek regions, such as the Peloponnese and in particular Western Macedonia, where the decarbonisation process has deeply affected local economies and in particular employment. The ripple effects on unemployment could very well expand into other energy sectors, such as natural gas, as the Green Transition – hopefully – gains speed. Its more than necessary for the Greek and other governments in the re12 gion to alleviate the socio-economic costs of the Green Transition by properly supporting those who become unemployed and, at the same time, retraining and reskilling people so that they can re-enter the labour market. In this context, particular attention should also be paid – through targeted programmes – to women, who are particularly exposed to these ripple effects. Existing EU support schemes should be expanded. iv.The EU continues to play a critical role in the Green Transition and its input in influencing energy policies in Southeastern Europe cannot be sufficiently emphasised. The EU should prioritise big energy projects that promote renewables, especially in electricity production, while at the same time using the financial instruments it has at its disposal to punish those(whether current or aspiring Member States) that do not fully engage in combating climate change according to their obligations. EU supervision is central here, as governments in the region have a questionable track record in implementing European policies(and not only in the area of fighting climate change).

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IMPRINT ABOUT THE AUTHOR IMPRINT Dr Yiorgos Christidis, Professor of Comparative Politics in the Balkans at the Department of Balkan, Slavonic and Eastern Studies, University of Macedonia and a Senior Research Fellow at ELIAMEP. Friedrich-Ebert-Stiftung Athens Office Neofytou Vamva 4| 10674 Athens| Greece Responsible: Arne Schildberg| Director Phone:+30 210 72 44 670 https://athens.fes.de Email: info.athens@fes.de Commercial use of all media published by the FriedrichEbert-Stiftung(FES) is not permitted without the written consent of the FES. The views expressed in this publication are not necessarily those of the Friedrich-Ebert-Stiftung or of the organizations for which the authors work.

SUMMARY The Russian invasion of Ukraine has given rise to new security and energy challenges for Europe. But Europe’s energy mix is emerging»from this crisis more diversified than ever, with new sources of imports, points of entry, delivery routes and types of energy«(Palti-Guzman, Majkut, Barlow 2023). This also applies to Southeastern Europe. But while since February 2022 the EU»has not just managed to avert a crisis« but has actually»turbocharged the green transition… potentially enough to knock a full decade off the continent’s decarbonisation timeline«(The Economist, 13 February 2022), as in 2022 wind and solar energy for the first time generated more electricity in Europe than did gas and coal (David Wallace-Wells, 15 February 2023), the same cannot be said for Southeastern Europe. Energy transition in the region, in the direction of meeting the challenges of climate change, continues to move more slowly than in the rest of Europe. Energy policies in Greece, Bulgaria and Serbia are being shaped not only in terms of the commitments the three countries have made in international agreements and in accordance with EU laws on fighting climate change, but also, as this brief study shows, by geopolitical considerations, an overarching emphasis on»energy security« and even short-term electoral calculations. It is also clear that governments in the region do not treat climate change with the urgency it demands. Only recently a UN agency warned that»the world is almost certain to experience new record temperatures in the next few years and temperatures are likely to rise by more than 1.5°C above preindustrial levels«, with dire consequences for health, food security, water management and the environment(Harvey, 17 May 2023).