REPOWEREU AND EU ENERGY TRADE: REDUCING DEPENDENCY ON RUSSIA AND DIVERSIFYING SUPPLY

The Russian invasion of Ukraine in 2022 exposed the European Union's structural dependence on fossil fuel imports from Russia, prompting an urgent policy response. In this context, the REPowerEU plan was launched to reduce the EU’s reliance on Russian energy and accelerate the diversification of supply sources. This dissertation investigates the extent to which REPowerEU has reshaped the EU’s external energy trade relations by decreasing imports of fossil fuels from Russia and increasing imports from alternative partners. Using a panel dataset of EU fossil fuel imports between the first quarter of 2017 and the first quarter of 2025, the study applies a Difference-in-Differences methodology to estimate the causal impact of the policy intervention. Findings indicate a statistically significant decline in Russian fossil fuel imports following the REPowerEU’s implementation in petroleum oils, gaseous natural gas and solid fossil fuels. Crucially, however, liquefied natural gas (LNG) imports from Russia increased post-REPowerEU, highlighting a complex short-term dynamic. This shift was accompanied by a statistically significant increase in imports from alternative suppliers with which the EU signed energy agreements. The results suggest a shift in the EU’s external energy trade landscape, largely succeeding in reducing Russian dependency over the period under analysis. However, the uneven transition across energy types, particularly with Russian LNG, underscores continued vulnerabilities. By providing empirical evidence on REPowerEU’s effectiveness, the study contributes to the literature on energy security, trade diversification, and policy evaluation in the context of international economics.