“The new normal” in the global energy sector: challenges for Russia

The global energy sector has entered a state of “The New Normal”. This term is usually used to describe the current crisis situation in which society finds itself due to coronavirus. Now it has become widely used in Russia as well. Usually, this concept refers to changes that occur under the influence of a crisis in society and economy, denoting something that used to go beyond the norm, but has now become commonplace. However, the situation with the “The New Normal” is much more complicated. For Russia the most important characteristic of “the new normal” is that that the COVID-19 pandemic has served as the foundation for promoting the values of sustainable development, new economy and energy transition.

That trend is particularly evident in the European Union. The EU seeks to convert the large-scale task of overcoming the negative consequences of coronavirus into the driver of a radical green transformation of the European economy and energy. In particular, this is reflected in the plans of the EU leadership to introduce a mechanism for carbon adjustment of borders in the coming years.

In turn, the significant rise in the global role of the “low-carbon agenda” that is taking place in the context of the transition to “The New Normal” causes increasing pressure on consumers and producers of fossil energy resources. All this leads to the emergence of fundamentally new threats and challenges for Russia, especially considering the crucial role that energy plays for it. Russia is one of the world's largest consumers, producers and exporters of energy resources. In addition, Russian exports, due to their structure, are characterized by increased carbon intensity. Therefore, global trends in the production and consumption of energy resources are of particular importance for Russia. They have an impact not only on its socio-economic situation, but also on the foreign policy positions. How effectively Russia will be able to adapt to the conditions of “The New Normal” will depend on the future of its energy sector and, accordingly, the prospects for the development of Russia as a whole. In these conditions, the country is immediately required to develop a comprehensive and long-term energy policy that would minimize or even turn to its advantage the challenges that brings the new global energy reality.

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