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Summary:
- Russia’s war on Ukraine has reshaped European energy markets and lent new urgency to the EU’s decarbonisation plans, altering the incentives of the bloc’s energy partners.
- Surging demand for Algeria’s oil and gas exports has temporarily undercut pressure for domestic reform, including in the energy sector.
- But growing local energy consumption and European plans to reduce fossil fuel imports in favour of renewables threaten Algeria’s rentier system.
- The country’s leaders have taken only minimal steps to build renewable energy capacity and remain fixated on raising hydrocarbon investment.
- While Algeria has little spare capacity to increase its hydrocarbon exports in the short term, it holds far more promise for Europe as a long-term partner in renewable energy.
- Europe’s ambitious climate goals, deep pockets, and technical expertise make it well placed to help Algeria kick-start a robust energy transition – if the country chooses to go along.
- At a high-level energy dialogue this month, EU and Algerian officials will convene for the first of many discussions to reshape the future of their energy partnership.
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