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Maya Lameche

UKEUUS HG2

Memo

Policy Associate, Boundary Stone Partners

As energy security becomes the new battleground for global influence, the US and EU must decide—will they lead together or fall behind? 
At the World Economic Forum in January 2025, Ursula Von Der Leyen <a href="https://ec.europa.eu/commission/presscorner/detail/en/speech_25_285">highlighted</a> the European Union’s (EU) plans to strengthen its international cooperation in response to “rising global competition.” Von Der Leyen singled out the United States (US): “No other economies in the world are as integrated as we are.” As energy security has become the driver of many Western democracies, as shown by President Trump’s immediate announcement of a <a href="https://www.whitehouse.gov/presidential-actions/2025/01/declaring-a-national-energy-emergency/">National Energy Emergency</a>, cooperation and competitiveness are now key to advancing clean energy and industrial policies. This reality is exacerbated by a shifting geopolitical landscape, threatened by a potential dependence on and direct competition with strategic adversaries such as Russia and China. As fossil fuel dependence is a geopolitical risk, decarbonisation should be seen as a strategic opportunity for energy security. Decarbonisation strengthens energy independence and resilience, making the US and EU less vulnerable to external pressures. As such, transatlantic allies must strengthen their collaboration on clean energy development to ensure long-term energy security and affordability while strengthening their competitive edge and economic growth.
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<h2>Key Takeaways:</h2>
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Transatlantic cooperation is essential for clean energy security and economic resilience for both the US and the EU amid rising global competition.
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Tariffs and trade tensions risk undermining US-EU collaboration, benefiting geopolitical competitors.
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Decarbonisation is a strategic advantage—aligning policies can enhance competitiveness while reducing reliance on hostile nations.
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Joint investment and regulatory alignment in clean energy can secure supply chains, drive innovation, and create jobs.
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A coordinated EU-US approach will strengthen industrial leadership and ensure long-term energy security for both.
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<h2>Facing the Challenge: US and EU Leadership Amid Rising Global Tensions</h2>
There have been continuous efforts over time to strengthen transatlantic cooperation and facilitate trade in the clean energy sector. Initiatives such as the Clean Energy Ministerial (CEM) and the US-EU Energy Council have played a key role in advancing collaboration, fostering policy alignment, and promoting innovation between the US and Europe to achieve decarbonisation. However, while the EU has historically had an ambitious commitment to climate action—as seen in the Green Deal and climate targets—a recent shift to a more tech-inclusive approach has made it more prone to cooperation with the US.
Indeed, Mario Draghi’s report, titled <a href="https://commission.europa.eu/document/download/97e481fd-2dc3-412d-be4c-f152a8232961_en">The Future of European Competitiveness</a>, emphasizes the EU’s new commitment to a more flexible energy strategy—balancing decarbonisation with business-friendly practices—bringing it closer to the US’ historical stance on energy policy. While this approach is relatively new for the EU, who’s been traditionally focused more on regulatory-driven solutions, Carbon-Free Europe (CFE) has long been <a href="https://www.carbonfreeeurope.org/publications">its advocate</a>, and such a change marks a key opportunity for cross-atlantic energy industry cooperation. Both the US and the EU are now aligned on the need to deploy flexible technologies and boost the competitiveness of their energy industries to strengthen their global leadership. 
Decarbonisation as an industrial strategy is key to increasing competitiveness in a rapidly evolving global energy market. However, a core takeaway of the <a href="https://commission.europa.eu/topics/eu-competitiveness/draghi-report_en">Draghi report</a> is that no single region can secure supply chains or outcompete global competitors like China and Russia. Instead, the US and EU must work together to strengthen the clean energy economy to ensure it is competitive, secure, and innovation-driven.
Existing trade agreements and strategic alliances, such as NATO and the US-EU Trade and Technology Council (TTC), already provide a framework for stability, secure supply chains, and economic resilience. In an era of geopolitical uncertainty, it will be crucial to keep this safe transatlantic environment—one that fosters secure trade, manufacturing, and investment without the disruptions posed by external geopolitical competitors. Existing joint projects, such as shared renewable energy infrastructure and the development of nuclear power plants, are a proof of the success of this framework, as they boost energy security by reducing dependence on external competitors such as China which has been expanding its influence in the global energy market. Chinese investments alone account for <a href="https://www.iea.org/reports/world-energy-investment-2024/china">one-third</a> of clean energy investments worldwide. These partnerships enhance energy security while driving job creation and technological exchange in clean energy.
Cooperation also promotes economic growth by <a href="https://policy.trade.ec.europa.eu/eu-trade-relationships-country-and-region/countries-and-regions/united-states_en#:~:text=Bilateral%20trade%20and%20investment%20support,of%20the%20Atlantic%20are%20supported.">fostering job creation</a> in the clean energy sector through a mutual exchange of technology, skills, and knowledge, as seen through the DOE-led initiative,<a href="https://www.energy.gov/ia/partnership-transatlantic-energy-and-climate-cooperation-p-tecc"> Partnership for Transatlantic Energy and Climate Cooperation</a> (P-TECC). P-TECC aims to boost energy cooperation between the US and Central and Eastern European countries by reducing reliance on Russian energy, as the Commission is set to further its efforts on this topic through the upcoming Roadmap Towards Ending Dependence on Russian Fuel in March 2025, creating economic opportunities, and accelerating clean energy adoption. Such a framework also ensures that workers are trained for the right technologies, which facilitates the development of transatlantic projects, either in the US or in the EU, as an alternative to initiatives led by competitors. 
A key issue at stake: Under the Trump administration, US tariffs on Chinese goods may drive China to offload its overproduction in Europe, disrupting markets, including the potential for unfair competition and undermining pricing structures. In this context, a EU-US partnership must collaborate and lead on the deployment of mutually beneficial clean energy projects and technologies through joint policies, regulations, trade agreements, and other commercial initiatives facilitating fair access to the US and European markets.  
<h2>Protecting Transatlantic Prosperity: US-EU Cooperation Amid Trade Challenges </h2>
During his campaign, Trump had signaled his intention to impose tariffs on the EU, which he <a href="https://www.politico.eu/article/eu-warned-to-prepare-for-early-donald-trump-tariff-action-us/">confirmed</a> after taking office. Following his decision to impose tariffs on Canada and Mexico, President Trump cited concerns over the significant US trade deficit with the region. In response, the EU, though it has repeatedly mentioned it would collaborate with its transatlantic partner, is preparing for a potential retaliation.
However, the start of a transatlantic trade war will likely benefit China, as EU Foreign Policy Chief Kaja Kallas pointed out. “We need America, and America needs us as well,” she <a href="https://www.cbc.ca/news/world/eu-trump-tariffs-1.7448782">said</a> last week. Indeed, such protectionist measures risk undermining the broader economic and security cooperation between the US and EU—particularly in the context of shared challenges from Russia and China. Russia remains the most immediate security risk—especially after its invasion of Ukraine—while China continues to pose a long-term strategic challenge in technology, critical minerals, and economic influence. 
To address these challenges and counter the threats to industries and economic competitiveness, the US and EU must balance their national interests with the need for cooperation on strategic issues. Divisions on trade would only undermine their shared goals; instead, aligning policies to secure supply chains, invest in clean energy, and reduce reliance on hostile nations is essential. By presenting a united front both regions can enhance economic resilience and strengthen their position against geopolitical threats. In clean energy, a united US-EU front is more cost-effective and impactful than fragmented efforts, both for securing jobs and leading the global market. They can secure critical supply chains through mutually beneficial agreements and maintain a competitive edge in emerging industries, thus ensuring energy security and leadership. 
<img src="//images.ctfassets.net/228txxvb8tt7/3XPXJtejuxSqBFhTKXvste/1c94124427869c86d240de5433a51b09/Trump_vdl.jpg" alt="" width="754" height="425">
Given that demand for clean energy is rising globally, the EU and the US have a strategic opportunity to lead the global clean energy economy. As Ursula von der Leyen <a href="https://ec.europa.eu/commission/presscorner/detail/en/speech_25_404">noted</a>, millions of American jobs depend on European trade and companies, underscoring the deep economic interdependence between these markets. Additionally, developing nations require vast amounts of steel and cement to build essential infrastructure, including electrical grids, transportation networks and urban developments. The EU and US should strive to be the main providers of these key infrastructures and technologies, and this can only be done through joint collaboration. The EU’s recent <a href="https://commission.europa.eu/document/download/10017eb1-4722-4333-add2-e0ed18105a34_en">Competitiveness Compass</a> highlights the crucial role of governments, noting that key policy levers—such as taxation, labor markets, and industrial policies—are largely controlled by EU member states. To drive progress, it calls for coordinated national reforms and investment through a Competitiveness Coordination Tool. The Compass makes the goal clear: Europe must become more business-friendly to keep pace with the US and China while maintaining its climate commitments.
Harmonising policies—such as coordinating <a href="https://taxation-customs.ec.europa.eu/taxation/excise-taxes/revision-energy-taxation-directive_en">tax incentives</a>, <a href="https://fsr.eui.eu/contracts-for-difference/#:~:text=What%20are%20Contracts-for-Difference%20%28CfDs%29%3F%20Contract-for-Difference%20%28CfD%29%20is%20a,used%20to%20protect%20consumers%20against%20high%20electricity%20prices.">Contracts for Difference (CFDs)</a>, and integrating the EU’s <a href="https://www.carbonfreeeurope.org/product/what-american-manufacturers-need-to-know-about-the-eu-cbam">CBAM</a> with US and UK frameworks—would strengthen transatlantic industrial leadership. Without coordination, fragmented policies could weaken market leadership, allowing China’s cheaper, <a href="https://www.iea.org/reports/co2-emissions-in-2023/the-changing-landscape-of-global-emissions">high-emission</a> alternatives to dominate. A cohesive transatlantic strategy will strengthen supply chains, accelerate innovation, safeguard jobs, and enhance long-term economic resilience in the clean energy sector.
<h2>Competitive Strength Through Cooperation: A Transatlantic Path to Energy Security</h2>
With impending threats to their energy markets, the US and EU must coordinate to maintain their leadership on the global stage, in line with their recent alignment on competitiveness strategies. Building on the momentum of its Competitiveness Compass and its upcoming Clean Industrial Deal, the next EU mandate should focus its transatlantic efforts on the following areas: 
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Harmonise Regulations and Market Standards for Clean Energy Technologies: As the EU has reaffirmed in its Competitiveness Compass, it should aim to harmonise its single market and simplify its regulations across member states. The goal is to facilitate access to its market and boost its competitiveness. This would entail a clear alignment on standards and certification processes for clean energy technologies to facilitate transatlantic trade and deployment. 
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Deploy Effective Financing Mechanisms: The EU and the US should establish a transatlantic clean energy investment fund to support companies working on emerging technologies, and promote mechanisms to de-risk project costs. Additionally, they should encourage joint ventures between EU and U.S. based companies through tax incentives and investment guarantees. 
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Leverage and Align Trade Agreements Across Member States: Since the effectiveness of EU-US trade agreements will be heavily tied to the tariff policy, the EU should focus on leveraging existing bilateral agreements between individual Member States and the US and harmonise them across the EU. This would entail ensuring that Member States follow specific EU guidelines that favor secure supply chains for clean energy deployments when engaging in bilateral trade agreements with the US. 
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The EU-US relationship is set to evolve significantly in the coming months as the Commission and the second Trump administration establish new norms for cooperation. Both the EU and the US are striving to be more competitive on the global stage, but instead of vying for individual dominance, they can use this as an opportunity for transatlantic cooperation. As both regions are converging on industrial growth, supply chain resilience, and economic security, it is vital that the US and EU partner in establishing a competitive edge over foreign adversaries. In the race for geopolitical influence via energy and its industries, Carbon-Free Europe will continue to support opportunities for transatlantic leadership in energy security, competitiveness, and economic innovation through the deployment of all clean energy technologies.

Power, Policy, and Partnerships: EU-US Energy Security in a Changing Geopolitical Landscape

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Power, Policy, and Partnerships: EU-US Energy Security in a Changing Geopolitical Landscape