From LNG to Renewables: The Future of EU-Egypt Energy Cooperation

Eliška Kotingová

The European Union (EU) has long positioned itself as a leader in environmental challenges and an advocate for global cooperation. Yet its energy cooperation with Egypt and Israel–particularly the 2022 Memorandum of Understanding (MoU) on natural gas trade–presents policy challenges. The agreement was signed amid Europe’s efforts to strengthen energy security following Russia’s invasion of Ukraine. While the MoU does not explicitly mention reducing reliance on Russian gas, EU officials framed it as part of broader diversification efforts. By 2025, geopolitical shifts, legal concerns, and logistical constraints raise questions about its long-term viability.

The EU-Egypt partnership has evolved over decades, with energy gaining prominence over time. The 1977 Cooperation Agreement prioritised trade, while the 1995 Barcelona Process introduced environmental and energy concerns. A significant milestone came in 2008 with the Memorandum of Understanding on Energy Cooperation, which promoted regulatory reforms and renewables. Over time, EU-backed projects, including Benban Solar Park and the COP27 green hydrogen initiative, exemplify successful renewable energy collaboration.

At its signing, the 2022 MoU was widely seen as a way to enhance European energy security, enabling Israeli gas to be transported to Egypt for liquefaction and export to European markets. European Commission President Ursula von der Leyen called it a “historic agreement” to stabilise EU gas supplies. However, several emerging challenges–legal, geopolitical, and logistical–have cast doubt on its long-term sustainability.

A key issue in the 2022 MoU is the legal ambiguity surrounding the origins of exported gas. Reports, including one by BADIL and a group of regional human rights organisations, have raised concerns that Israeli gas exports may involve resources from disputed maritime zones. Under international law, including the Hague Regulations (1907) and the Fourth Geneva Convention (1949), resource exploitation in occupied territories is legally contentious. Given the EU’s strict stance on similar disputes, such as Crimea, it remains to be seen whether similar assessments will be applied in this case. A European Parliamentary question also raised concerns over the absence of a territorial clause in the agreement, underscoring the need for clarity on the legal framework governing these exports.

Beyond legal concerns, the 2022 MoU has faced geopolitical and logistical setbacks. Since October 7, 2023, regional instability has complicated energy cooperation. The shutdown of Israel’s Tamar gas field disrupted gas supplies to Egypt, temporarily reducing LNG exports to Europe. Operations resumed in mid-November 2023, but the episode exposed regional energy vulnerabilities. Simultaneously, Egypt’s energy shortages–partly due to declining output from key gas fields such as Zohr–have increased its reliance on imports and strained exports. While Israeli gas exports to Egypt rose by 13.4% in 2024–reflecting Israel’s growing role as a key regional supplier–Egypt’s infrastructure constraints have limited its capacity to scale up exports.

Despite its ambitions to become an LNG export hub, Egypt faces persistent supply challenges, with over 70% of its electricity generated from natural gas. Declining gas output and infrastructure constraints raise concerns about Egypt’s export capacity. The government has pledged $15 billion over the next three years to sustain production, but its effectiveness remains uncertain. Additionally, Egypt can no longer import LNG, as its regasification units (FSRUs) were relocated, making it reliant on domestic production and Israeli pipeline imports.

Although the 2022 MoU was seemingly intended to provide short-term relief to Europe’s energy crisis, its long-term sustainability appears increasingly uncertain due to geopolitical instability, Egypt’s declining gas production, and infrastructure limitations. Rather than relying on volatile LNG exports, a more strategic approach would be to strengthen the renewable energy partnership between the EU and Egypt. Both parties have already made substantial commitments to sustainable energy. Egypt’s Vision 2030 aims to generate 42% of its electricity from renewables by 2035, while the National Hydrogen Strategy, launched at COP27, positions Egypt as a major player in the green hydrogen sector. Similarly, the EU’s REPowerEU plan prioritises renewable hydrogen and green energy imports as part of its broader decarbonisation strategy.

While the 2022 MoU played a role during a time of crisis, the current energy landscape demands a forward-looking approach. Egypt’s infrastructure and supply chain constraints, coupled with Europe’s growing energy diversification, highlight the need to prioritise renewables. Investing in Egypt’s renewables, particularly green hydrogen, would help the EU meet climate goals and ensure a stable, legally sound energy partnership. As both sides look toward the future, aligning policies with sustainability goals, legal principles, and energy resilience will be essential to ensuring a lasting and strategically beneficial partnership. 

Acknowledgement: This blog was funded by the European Union through the Jean Monnet Chair in Global Actor EU: The International Relations of the European Union in a Competitive and Fractured World (GLOBALEUTY), project number 101175018. 

Disclaimer: Views and opinions expressed are however those of the author only and do not necessarily reflect those of the European Union, the European Education and Culture Executive Agency or the Institut Barcelona d’Estudis Internacionals. Neither the EU nor IBEI can be held responsible for them.