Atlantic Council GLOBAL ENERGY CENTER
ISSUE BRIEF
Transforming Ukraine into a European Energy Hub L. MORNINGSTAR, ANDRÁS SIMONYI, AUGUST 2023 RICHARD OLGA KHAKOVA, PADDY RYAN
Foreword
Russia’s unprovoked full-scale invasion of Ukraine has caused untold devastation. The country’s civilian infrastructure has been targeted by Moscow, in direct violation of international law, to break Ukrainian defenses. Despite Russia’s persistent attacks, Ukraine has demonstrated resolve to defend itself. The Russian threat to Ukraine has accelerated its movement toward integration into the European and transatlantic political, economic, and security partnerships. It is in the interest of the United States and the European Union (EU) that Ukraine not only wins the war and recovers rapidly but also—with transatlantic support—embarks on a fast-track modernization to bring its political and economic systems in line with European standards. In these efforts, energy will play an important role. There is growing understanding in the United States and Europe that Ukraine can be a critical pillar of Europe’s energy security and green transition. The tremendous potential of a post-war Ukrainian energy sector described in this paper is also the best antidote to the dangers of returning to the pre-war energy relationship with Russia. The United States and Europe must work together to make this happen. With the support of this transatlantic partnership, Ukraine can overcome a legacy of graft, political uncertainty, and opaque governance to create stable political and legal conditions to attract private sector investment and enable the transfer of new technologies. Governments’ and international lending institutions’ support will be critical for Ukraine’s energy sector reconstruction and transformation, but private investment will also be vital for creating a prosperous, resilient, and self-sufficient energy system in Ukraine. The Atlantic Council Global Energy Center develops and promotes pragmatic and nonpartisan policy solutions designed to advance global energy security, enhance economic opportunity, and accelerate pathways to net-zero emissions.
Merely restoring Ukraine’s energy system to its prewar state will be insufficient to realize the country’s potential; it must be upgraded to ensure long-term energy independence, reach decarbonization goals, and take on a broader role in European energy security as an energy exporter. Only through a transformation of its energy system can the country achieve these goals and capitalize on its resources. This is not only in Ukraine’s interest but also in the interest of transatlantic energy security and global climate ambitions.