EU-MERCOSUR links: between the centrality of the energy transition and geostrategic considerations

Having passed the first quarter of the 21st century, the international system is going through a turbulent stage, marked by the hegemonic dispute between the United States and China, as well as growing tensions among different actors, where economic, energy, environmental, and geopolitical crises converge. To characterize the moment, labels emerge that highlight, on the one hand, the specific challenges of the period, while also alluding to features shared with other historical stages. Concepts such as “polycrisis” — introduced by Edgar Morin in 1993 — are thus revisited. The term “permacrisis,” chosen as the Collins Dictionary’s word of the year in 2022, also refers to a situation of permanent crisis, in which social, economic, political, and environmental problems worsen and reinforce each other, generating a scenario of uncertainty and risk. Conceptualizations such as “interregnum” — recovered by José Antonio Sanahuja (2020) — address present-day challenges by referring to earlier historical phases and underscore systemic instability and the erosion of the consensuses that prevailed in previous decades. Likewise, the intensification of conflicts — particularly in Ukraine and Gaza — with the strong reintroduction of geopolitics and geoeconomics — including the “weaponization” of trade — has led to the emergence of notions such as the “1933 Syndrome,” coined by Siegmund Ginzberg (2024).

This panorama is indicative not only of an accumulation of crises, but rather suggests a change of era, in which the margins of action of States and regional organizations are redefined, affecting the possibilities for multilevel governance in different areas. In this context, the energy transition becomes an articulating axis connecting the economy, geopolitics, and environmental sustainability: the dynamics outlined above affect the core issue of energy, imposing specific challenges of coordination and articulation to confront the climate crisis and impacting the ability to promote effective responses. In terms of commitments, the G20 agreed in India in September 2023 to triple global renewable energy capacity by 2030, rising from more than 3,500 gigawatts (GW) currently installed to roughly 11,000 GW, in order to maintain the goal of limiting global warming to 1.5 degrees, according to the Paris Agreement. However, it is not simply a matter of replacing fossil sources with clean energy, but rather a process that reconfigures power relations and global value chains.

For the European Union (EU), the energy transition fulfills a dual function: it constitutes an internal decarbonization goal and simultaneously represents an instrument of foreign policy. Especially after Russia’s invasion of Ukraine, a reorientation can be perceived in the EU’s community diplomacy and its energy and climate policies, shifting from a normative-axiological approach toward one more strongly permeated by security concerns.

For Latin America and the Caribbean (LAC), a central aspect of its ties with Europe has historically been the fact that the EU presented the region with a relatively more diverse agenda compared to that of other external actors. In the framework of new association agreements, the green transition is a prominent theme.

In LAC, political-ideological polarization has strongly shaped the past decades. Added to this are the economic crises that have successively hit the region, its vulnerability to external shocks, its dependence on the export of raw materials, and the pressure on natural resources, within a current landscape of “liquid regionalism,” as characterized by Karina Pasquariello, Regiane Bressan, and Bruno Theodoro Luciano (2023).

Against this backdrop, despite the difficulties in establishing common standards and homogeneous policies given the differences among its members (size, population, economic weight, and levels of development), MERCOSUR constitutes an organization with a significant degree of consolidation. The evolution of the bloc reveals a zigzagging process of institutional-normative development aimed at promoting “clean” energies. Agreements at the MERCOSUR level could be relevant for establishing shared guidelines and governance schemes that could eventually lead to an energy community. At the same time, the bloc also appears as a relevant partner for the EU due to its natural resource endowment, including certain critical minerals for the energy transition.

At present, this transition is evolving toward the decarbonization of sectors where reducing or “abating” greenhouse gas (GHG) emissions is difficult, such as transportation. Thus, the debate on the hydrogen economy has gained importance, with the particular challenges posed by the modalities through which its promotion unfolds in countries of the Global South. Parallel to cooperation initiatives such as the European Green Deal and the EU’s Global Gateway, critical perspectives also emerge regarding a developmentalist approach that could entail risks of financialization, technological dependence, and limited benefit capture for countries of the Global South.

Initiatives such as the Global Gateway contribute to the emergence of investment projects whose priorities include, for example, the production of green hydrogen and methanol, generating impacts on the foreign policy and external action of MERCOSUR member countries, with implications for the development of their territories.

EU-MERCOSUR relations, with the prospect of finalizing the framework association and free trade agreement, hold the potential to generate a shared space for policy dialogue, regulatory convergence, and productive transformation: in fluid connection with initiatives such as the Global Gateway, the capacity for regional and interregional coordination could be deepened, contributing to the fulfillment of global decarbonization objectives. In the context of the green transition, opportunities arise for the creation of regional and national value chains, with repercussions for innovation, local development, quality employment, and the export of products such as green hydrogen and its derivatives. Although there are risks of heightened competition among countries of the South American bloc, there is also room for regulatory convergence around certifications such as CertHILAC, an initiative of OLADE (Latin American Energy Organization) that aims to harmonize certification of “clean” hydrogen production across LAC, with the exception of Brazil.

Currently EU-MERCOSUR relations are at a turning point: Europe is seeking reliable partners for its green transition, and Latin America should reposition itself by leveraging its natural resources and energy assets. Both partners should capitalize on the opportunity for a bi-regional commitment aimed at overcoming asymmetric patterns of interaction, promoting an association grounded in reciprocal ties.

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Amalia Stuhldreher holds a degree in International Relations from the University of Salvador and a PhD in Political Science from the University of Mainz. She is an Associate Professor with full dedication at the Institute for Sustainable Development, Innovation and Social Inclusion (IDIIS) of the University of the Republic (UDELAR) in Tacuarembó, and an active member of Uruguay’s National Research System (SNI). Her work, grounded in multilevel governance, analyzes Latin American integration and global issues such as climate change, renewable energies, and the bioeconomy, focusing on their implications for sustainable territorial development.

The opinions expressed in this blog are solely those of the author and do not reflect the views of the EULAS Network.