EU members possess approximately 0.6 percent of the world’s proven oil reserves and 2.0 percent of the world’s proven natural gas reserves. The EU holds 4.0 percent of proven coal reserves, and 18.0 percent of the world’s electric generating capacity.

The EU is a net importer of energy. According to a report published by the European Commission, (European Union Energy Outlook to 2020), two-thirds of the EU’s total energy requirements will be imported by 2020. Eurogas expects that the EU will import up to 75 percent of its natural gas requirements by 2020. EU member countries import oil predominately from Russia, Norway, Africa and the Middle East.

In 2003, the EU consumed 73.7 quadrillion British thermal units (Btu) of energy, 17 percent of the world’s total energy consumption. In comparison, the United States consumed 98.8 quadrillion Btu (23 percent of world total) in 2003.

The EU’s dominant fuel in 2003 was oil, accounting for 40 percent of total EU energy consumption. Over the past decade, natural gas has been the fastest growing fuel source in the EU. In 2003, natural gas accounted for 24 percent of EU energy consumption. The increase in natural gas consumption has been mainly at the expense of coal, whose share declined from 20 percent in 1991 to 13 percent 2003.

Environmental concerns are a major reason for the decline in the use of coal, most evident in the EU’s Directive 2001/80/EC, which seeks to limit air pollutants produced from large coal-fired combustion plants. The Directive requires all thermal power generators with at least 50 MW of capacity to reduce their nitrogen oxides (NO x) and sulfur dioxide (SO2) emissions or face closure. Generators deciding not to comply will only be allowed to operate for 20,000 hours after the Directive comes into force in 2008. The EU carbon emissions trading scheme, which began in January 2005, limits the amount of carbon dioxide (CO2) power generators can emit, further decreasing the probability of expanded coal use in current EU member countries. Other factors in coal’s decline include the increased availability of natural gas supplies from Russia, Norway, and Algeria by pipeline, as well as increased liquefied natural gas (LNG) imports from Nigeria.

Nuclear power currently accounts for 14 percent of total EU energy consumption. A group of EU countries including Austria, Denmark, Portugal and Spain are opposed to using nuclear power in the EU as an energy source. Conversely, countries (Italy, Germany, Sweden, UK and the Netherlands) that were formerly opposed and/or had bans against using nuclear power are now rethinking and supporting nuclear development. In Sweden, those in opposition to nuclear power came out in support of it last year, although, the country did close its second nuclear reactor in May 2005. The Dutch government decided to continue using its only nuclear power plant, Borssele, indefinitely. The plant had a former closure date of 2013. Belgium’s new government has commissioned a new study of nuclear power in the country. Nuclear reactors currently in Belgium would not be closed until 2017 if on schedule. Finland plans to bring a new 1,600-MW reactor online by 2009, and a new French reactor is being planned.

In 2003, hydroelectric power accounted for approximately 4 percent of total EU power consumption. Although other “renewables” (geothermal, biomass, solar, and wind) constituted only 2 percent of total EU energy consumption in 2003, wind power has made great strides over the past decade. At the end of 2004, the EU had installed wind capacity of over 34,000 MW, according to the data published by the European Wind Energy Association (EWEA). Denmark’s 166-MW Nysted wind farm, the largest such development in the EU, started to produce electricity in December 2003. Wind energy is playing a critical role in EU attempts to generate 22 percent of the region’s electricity from renewables and to reduce carbon emissions by 2020. EWEA expects installed wind capacity in the EU to reach 75,000 MW by 2010.