loading . . . Beyond diversification: new report warns CEE fossil dependence heightens risks amid Iran war energy shock A groundbreaking report by the Centre for the Study of Democracy (CSD) published today , an advance copy of which was obtained exclusively by EUalive.net, delivers a stark warning: Central and Eastern Europe’s heavy reliance on fossil fuels is amplifying energy and climate security risks at a time when global markets are once again convulsing. Russia’s war in Ukraine exposed the region’s vulnerabilities; now the escalating conflict with Iran is driving fresh oil and gas price spikes, underscoring how incomplete structural change leaves households and industries dangerously exposed.
The 54-page study, “ Beyond Diversification: Energy Security through Structural Change in Central and Eastern Europe ,” combines the Energy and Climate Security Risk Index (ECSRI), expert assessments of updated National Energy and Climate Plans (NECPs), and a Discrete Choice Experiment conducted in Bulgaria, Croatia, Poland and Romania. Its central message is clear: emergency diversification and subsidies bought time, but they cannot replace deep transformation. Decarbonisation has advanced mainly in the power sector, while buildings, heating, transport and industry remain fossil-fuel dependent — creating rising affordability risks and conditional public support for the green transition.
Geopolitics: security without resilience
The report shows that supply security has improved through LNG terminals, new pipelines and alternative suppliers. Poland replaced Russian gas via the Baltic Pipe and LNG; Romania and Croatia leveraged domestic production and the Krk terminal; Bulgaria completed the Greece interconnector. Yet the analysis warns that new dependencies are emerging around clean energy supply chains and critical raw materials, highly concentrated outside the EU. Nuclear expansion is treated as geopolitically neutral, but fuel supply and waste risks are underplayed. Renewables offer the most durable security path, yet deployment outpaces grid integration, storage and flexibility, risking system instability.
Bulgaria stands out as the most politically sensitive case, with lingering TurkStream transit obligations and delayed full decoupling from Russian oil until 2023. The report notes that indirect Russian gas flows may still reach the region via virtual swaps, while the recent U.S. sanctions on Lukoil’s Burgas refinery add fresh uncertainty.
Affordability: the political fault line
Energy poverty remains unacceptably high across CEE, the region most vulnerable in the EU. Emergency subsidies exceeding €1 trillion EU-wide cushioned the 2022-2023 shock, but the CSD analysis shows they did not address root causes: outdated housing stock, carbon-intensive heating and low efficiency. Public willingness to pay for climate measures is limited and conditional. Citizens accept ambitious policies only when they visibly reduce everyday risks, distribute costs fairly (higher-income households contributing more) and deliver shared benefits.
The Discrete Choice Experiment reveals striking differences: Poles show the strongest willingness to pay for reduced import dependence, reflecting deep geopolitical concerns. Bulgarians and Croatians value independence but hesitate when costs rise. Romanians appear somewhat insulated by domestic production, yet still demand fairness.
Reliability and sustainability: progress without transformation
Reliability risks have fallen thanks to diversification, but new vulnerabilities emerge as renewables grow faster than balancing infrastructure. Sustainability risks persist because decarbonisation remains uneven: power sectors lead, while transport and buildings lag. The report criticises NECPs for lacking concrete demand-reduction, deep-renovation and circular-economy measures.
Concrete steps forward
The CSD proposes a roadmap for structural change:
– Prioritise energy efficiency and electrification over price caps and subsidies.
– Embed progressive cost-sharing and visible benefits to maintain public support.
– Treat grid, storage and demand-side flexibility as immediate priorities, not future options.
– Extend decarbonisation beyond power to transport, buildings and industry.
– Integrate circular economy and domestic clean-tech manufacturing to reduce critical-raw-material dependence.
– Turn NECPs into credible “social contracts” with transparent timelines, financing and stakeholder buy-in.
Martin Vladimirov, Director of CSD’s Energy and Climate Program and lead author, summarises the challenge: “The energy transition in CEE is no longer just about emissions reduction – it is about protecting citizens from price volatility and supply shocks while rebuilding industrial competitiveness.”
The Iran war’s ripple effects on oil markets make these recommendations urgent. Without deeper structural reform, CEE countries risk repeating the 2022 crisis cycle: temporary fixes followed by renewed vulnerability.
Caption: The Liberia-flagged tanker Shenlong, carrying crude oil from Saudi Arabia to India via the Strait of Hormuz, arrives at Mumbai Port in Mumbai, India, 12 March 2026. Iran has allowed Indian oil tankers to pass through the Strait of Hormuz following diplomatic talks between External Affairs Minister S. Jaishankar and his Iranian counterpart Abbas Araghchi. EPA/DIVYAKANT SOLANKI https://eualive.net/beyond-diversification-new-report-warns-cee-fossil-dependence-heightens-risks-amid-iran-war-energy-shock/
