From Import Vulnerability to Energy Transition Performance: The Mediating Role of Green Fiscal Policy in the European Union

In the modern world, the energy that powers our homes, factories, and cities is a complex web of global trade. For many nations, this web is a source of weakness. When a country relies heavily on buying electricity, oil, or gas from neighbors or distant suppliers, it faces a constant risk. If a conflict erupts, a supply line breaks, or prices spike, that nation's economy can shudder. This state of being exposed to outside forces is known as energy import vulnerability. For decades, experts assumed that this vulnerability simply made it harder for countries to switch to clean, green energy. The logic seemed straightforward: if you are busy scrambling to keep the lights on, you cannot afford the expensive transition to wind and solar power.

However, the story of how nations move from fossil fuels to clean energy is not just about resources or geography; it is also about how governments choose to act. A nation's ability to change its energy system depends heavily on its "green fiscal policy." This is a fancy term for a set of financial tools, such as taxes on pollution or subsidies for clean technology, that a government uses to steer the economy toward sustainability. The central question for researchers has long been whether the pressure of needing to import energy forces governments to use these tools more aggressively, or if the pressure simply paralyzes them. Understanding this link is crucial for the European Union, which has set a bold goal to become climate-neutral by 2050 while trying to secure its energy supply against global instability.

A team of researchers from universities in Romania set out to untangle this relationship across the twenty-seven member states of the European Union. They analyzed data from 2014 to 2023, a period that included significant geopolitical shocks and rapid changes in climate policy. Instead of looking at individual countries in isolation, they built a comprehensive picture of how energy dependence, government taxes, and energy performance interacted across the entire continent. Their goal was to test a specific idea: that the danger of relying on foreign energy does not directly stop or start the transition to green power. Instead, they hypothesized that this danger acts as a trigger, pushing governments to adopt stronger financial rules, and it is those rules that actually drive the change.

To test this, the researchers gathered a vast amount of information from official European statistics. They measured how much each country relied on imported energy, how much they taxed energy use and pollution, and how well they were performing in shifting to renewables and improving efficiency. They combined these many different numbers into three clear scores for each country: one for how vulnerable they were to outside shocks, one for how strong their green tax policies were, and one for how well their energy transition was working. By using advanced statistical methods to look at the patterns in this data, they could see which factors were truly connected and which were just coincidental.

The results of this analysis revealed a clear and surprising chain of events. The researchers found that energy import vulnerability does not directly determine how well a country performs in its energy transition. In fact, when they looked at the data, the direct link between being dependent on imports and having a successful green transition was so weak it was statistically invisible. A country being highly dependent on foreign energy did not automatically mean it would fail to switch to clean power, nor did it guarantee success. The danger of import dependence was not the final judge of a nation's energy future.

Instead, the study showed that the real driver was the government's response. The data confirmed that when a country faced higher levels of energy import vulnerability, it tended to respond by strengthening its green fiscal policies. In other words, the pressure of needing to import energy acted as a catalyst, pushing governments to implement tougher taxes on pollution and create better financial incentives for clean energy. This was the first crucial link in the chain. The second link was even stronger: countries that adopted these robust green fiscal policies saw significant improvements in their energy transition performance. They became more efficient, used more renewable energy, and produced more economic value per unit of energy consumed.

The most important finding of the study is that the entire process works as a relay race. The vulnerability of importing energy passes the baton to the government's fiscal policy, and the fiscal policy then runs the final leg to achieve a successful energy transition. The researchers demonstrated that without the middle step—the active use of taxes and financial incentives—the pressure of import dependence goes nowhere. It does not lead to progress on its own. This means that the danger of relying on foreign energy is not a dead end; it is a signal. If a government listens to that signal and uses its financial tools effectively, the very vulnerability that threatens the nation can become the motivation for a successful shift to clean energy.

This discovery challenges the old view that countries with high energy dependence are doomed to struggle with their climate goals. The study suggests that the difference between success and failure lies not in the geography or the resources a country possesses, but in its governance. Some nations, particularly those in Northern and Western Europe, have shown that strong institutions and consistent fiscal policies can turn the pressure of vulnerability into a powerful engine for change. In contrast, countries that failed to activate these fiscal mechanisms, regardless of their level of dependence, did not see the same improvements. The research indicates that the path to a green future is not blocked by the need to import energy; it is blocked only if governments fail to use their financial levers to respond to that need.

The implications of these findings are significant for how the European Union plans its future. It suggests that the solution to energy insecurity is not just to build more pipelines or find new suppliers, but to build better fiscal systems. The study supports the idea that environmental taxes and carbon pricing are not just revenue generators, but essential strategic tools that allow nations to convert external risks into internal progress. For countries that are highly dependent on imports, the lesson is clear: the path forward requires a deliberate and strong fiscal response. The data shows that when governments act decisively with their financial policies, they can transform the threat of vulnerability into a driver for a sustainable, resilient, and clean energy future.