Europe’s energy operating system: P-TEC as the North Star in a European maze – Atlantic Council

Report on Europe’s Energy Transition and the Role of Transatlantic Cooperation in Achieving Sustainable Development Goals

1.0 Introduction: Navigating Complexity in Pursuit of Sustainable Development

Europe’s transition towards a sustainable energy system, a critical component of achieving Sustainable Development Goal 7 (Affordable and Clean Energy) and SDG 13 (Climate Action), has become increasingly complex. The current landscape is characterized by a maze of overlapping regulations, conflicting policy objectives, and divergent national interests. This complexity is compounded by geopolitical shifts, notably the reduction of Russian hydrocarbon supplies, which has created significant uncertainty for investors and stakeholders. This report analyzes these challenges and evaluates the role of the Partnership for Transatlantic Energy Cooperation (P-TEC) as a vital instrument for aligning Europe’s energy strategy with the Sustainable Development Goals.

2.0 Challenges to Achieving SDG 7 and SDG 13 in Europe

The path to a decarbonized and resilient energy system is obstructed by significant regulatory and policy inconsistencies. These contradictions create market fragility and deter the investment necessary for progress on the SDGs, particularly impacting SDG 8 (Decent Work and Economic Growth) and SDG 9 (Industry, Innovation, and Infrastructure).

2.1 Regulatory and Financial Contradictions

Several key policy areas demonstrate a gap between ambition and execution, undermining the stability required to achieve sustainable energy targets.

• Natural Gas Financing: The European Investment Bank’s policy of not financing natural gas projects, even for diversification from Russian supply in regions like the Western Balkans, conflicts with the immediate need for energy security and a pragmatic transition, hindering progress towards SDG 7.
• Methane Emissions Regulation (MER): While aligned with SDG 13, the 2024 MER has created operational uncertainty. The difficulty in interpreting compliance requirements for reporting and certification highlights a need for greater regulatory clarity to support industry action.
• Nuclear Power Classification: The inconsistent treatment of nuclear power, recognized as a zero-carbon source but often excluded from green financing frameworks, divides member states and deters investment in a key technology for achieving both SDG 7 and SDG 13.

3.0 The Partnership for Transatlantic Energy Cooperation (P-TEC) as a Catalyst for the SDGs

P-TEC, an annual gathering of public and private energy leaders, serves as a crucial platform for advancing SDG 17 (Partnerships for the Goals). Its mission is evolving from a forum for discussion to a strategic body capable of architecting a more coherent and resilient energy framework for Europe.

3.1 P-TEC’s Twofold Mission for Sustainable Development

1. Enhance Regulatory Literacy: P-TEC must act as a translator, helping US and regional partners navigate Europe’s dense network of rules and climate instruments. This function is essential for unlocking investment and ensuring that projects align with the objectives of SDG 7 and SDG 9.
2. Architect a Coherent Framework: P-TEC should facilitate transatlantic cooperation to build a more realistic and resilient European energy system. This involves shaping policies that balance climate ambition with energy security and economic competitiveness, directly supporting SDG 7, SDG 8, and SDG 13.

4.0 Strategic Recommendations for a SDG-Aligned Energy Future

To accelerate progress, P-TEC and its partners should focus on strategic initiatives that enhance connectivity, interoperability, and institutional capacity, leveraging the power of SDG 17.

4.1 Fostering Resilient Infrastructure and Integration

• Strengthening Connectivity: The North–South energy corridor, linking the Baltic, Adriatic, and Black Seas, is fundamental to regional resilience and sovereignty. US investment and expertise can help realize this critical infrastructure, advancing SDG 9.
• Promoting Interoperability: The focus should be on enhancing interoperability between existing institutions, such as P-TEC and the Three Seas Initiative. These platforms share goals of regional integration and diversification and can collectively form a transatlantic “operating system” that balances climate ambition (SDG 13) with security and competitiveness.
• Investing in Regulatory Capacity: Both sides of the Atlantic must invest in regulatory literacy. The ability to navigate, interpret, and align policy frameworks is a strategic necessity for building the clean energy infrastructure required to meet the SDGs. This strengthens institutional capacity, a core tenet of SDG 16 (Peace, Justice, and Strong Institutions).

5.0 Conclusion: Clarity as a Prerequisite for Sustainable Energy

Europe’s future energy landscape will be defined by new understandings as much as by new technologies. P-TEC is positioned at the intersection of both. By fostering clarity, promoting pragmatic policy, and strengthening transatlantic partnerships under the banner of SDG 17, P-TEC can guide the development of a resilient and innovative European energy system. This will ensure the continent can effectively meet its commitments to SDG 7 (Affordable and Clean Energy) and SDG 13 (Climate Action) while enhancing regional security and prosperity.

Analysis of Sustainable Development Goals in the Article

1. Which SDGs are addressed or connected to the issues highlighted in the article?

1. SDG 7: Affordable and Clean Energy
   • The article’s central theme is Europe’s energy system, its transition towards sustainability, and the challenges in achieving a coherent energy policy. It directly discusses energy security (reducing dependence on Russian gas), the role of different energy sources like natural gas and nuclear power, and the need for investment in energy infrastructure.
2. SDG 13: Climate Action
   • The article explicitly refers to Europe’s “climate ambition” and its “decarbonization agenda.” It analyzes specific climate-related policies like the EU’s Methane Emissions Regulation (MER), which aims to reduce methane emissions from fossil fuel operations, a key component of climate action.
3. SDG 9: Industry, Innovation, and Infrastructure
   • The text emphasizes the need for resilient energy infrastructure, mentioning the “North–South energy corridor, linking the Baltic, Adriatic, and Black Seas” as the “backbone of regional resilience.” It also discusses expanding interconnections, market interoperability, and new nuclear builds, all of which fall under the development of sustainable and resilient infrastructure.
4. SDG 17: Partnerships for the Goals
   • The article is built around the “Partnership for Transatlantic Energy Cooperation (P-TEC),” which it describes as a gathering of “public and private energy leaders.” It highlights the importance of transatlantic cooperation, regional integration (Three Seas Initiative), and public-private partnerships to navigate Europe’s complex energy landscape and achieve shared goals.

2. What specific targets under those SDGs can be identified based on the article’s content?

1. Target 7.a: By 2030, enhance international cooperation to facilitate access to clean energy research and technology, including renewable energy, energy efficiency and advanced and cleaner fossil-fuel technology, and promote investment in energy infrastructure and clean energy technology.
   • The article positions P-TEC as a key platform for this, stating it should help US partners understand European rules and evolve into “a space where transatlantic cooperation contributes to a more coherent, realistic, and resilient European framework.” It also notes the US can “add real value through investment and project expertise.”
2. Target 9.1: Develop quality, reliable, sustainable and resilient infrastructure, including regional and transborder infrastructure, to support economic development and human well-being, with a focus on affordable and equitable access for all.
   • This target is directly addressed through the call for “Expanding interconnections and ensuring market interoperability” and the focus on the “North–South energy corridor” as essential for “regional resilience” and “sovereignty.”
3. Target 13.2: Integrate climate change measures into national policies, strategies and planning.
   • The article discusses the EU’s integration of such measures, citing the “Methane Emissions Regulation (MER)” as an example of “well-intended climate ambition.” However, it also critiques the implementation, noting the regulation creates “operational uncertainty” and highlights a “gap between ambition and execution.”
4. Target 17.17: Encourage and promote effective public, public-private and civil society partnerships, building on the experience and resourcing strategies of partnerships.
   • P-TEC is presented as a prime example of such a partnership, described as an “annual gathering of public and private energy leaders.” The article advocates for enhancing interoperability between critical platforms like P-TEC and the Three Seas Initiative to create a more effective “transatlantic ‘operating system’.”

3. Are there any indicators mentioned or implied in the article that can be used to measure progress towards the identified targets?

1. Indicator for Target 7.a: Level of US investment and project expertise in European energy infrastructure.
   • The article implies this as a measure of P-TEC’s success, stating, “Here, the United States can add real value through investment and project expertise that turn political declarations into results.” Progress would be the tangible flow of capital and technical support for projects.
2. Indicator for Target 9.1: Degree of expansion of energy interconnections and market interoperability.
   • The article identifies “Expanding interconnections and ensuring market interoperability” as key technical goals. Progress could be measured by the number and capacity of new cross-border energy connections built, particularly along the North-South corridor.
3. Indicator for Target 13.2: Clarity and effectiveness of climate regulations.
   • While not a standard UN indicator, the article strongly implies that the success of climate policies depends on their practical application. It notes that companies “struggle to interpret what compliance with the [MER] policy means in practice.” Therefore, a measure of progress would be the level of “regulatory literacy” and the reduction of “operational uncertainty” for investors and companies.
4. Indicator for Target 17.17: Enhanced interoperability and collaboration between strategic partnership platforms.
   • The article suggests that progress lies not in creating new institutions but in “enhancing interoperability among those that already exist, including P-TEC and the Three Seas Initiative.” A measure of success would be the number of joint initiatives or aligned strategies between these platforms.

4. Summary Table of SDGs, Targets, and Indicators

Source: atlanticcouncil.org