Scientific insights: how the war in Ukraine is reshaping Europe’s energy and business strategies

Russia’s war against Ukraine, along with the conflict involving the United States and Israel and Iran, has exposed deep structural vulnerabilities in Europe’s energy system, according to researchers from the Faculty of Business at Kauno kolegija Higher Education Institution working in the fields of energy policy, management and economics.

According to them, Europe’s long-standing dependence on external suppliers – particularly Russian natural gas – turned into a major energy security challenge after the outbreak of Russia’s war against Ukraine. Meanwhile, since the start of the US and Israel’s conflict with Iran on 28 February, European gas prices have risen sharply, with additional concerns stemming from strikes on Qatar’s LNG infrastructure and disruptions in the Strait of Hormuz.

Economic pressure and shifts in investment

One of the most immediate consequences of Russia’s war against Ukraine in 2022 was a sharp increase in energy prices. In March 2026, natural gas prices surged again – not only due to the ongoing conflict but also because of broader geopolitical tensions in global energy markets – rising by as much as 65% in some cases.

Dr Bahman Peyravi, Associate Professor at the Faculty of Business at Kauno kolegija, who researches innovation management, eco-innovation, circular economy solutions and sustainable business transformation in small and medium-sized enterprises, notes that prolonged market volatility is already reshaping investment patterns across Europe. Capital is being redirected from long-term sustainability projects towards faster-return energy security solutions.

‘In times of economic uncertainty, both governments and businesses tend to prioritise immediate energy security solutions over long-term sustainability goals. As a result, the green transition becomes more cautious and uneven,’ says Dr B. Peyravi.

At the same time, the crisis is intensifying political debates within the European Union. Discussions about potentially restoring some energy ties with Russia in order to reduce economic pressure reveal growing disagreements over how to balance energy security with climate commitments. Increasingly, public discourse questions whether short-term economic interests are beginning to overshadow long-term strategic goals.

Infrastructure – the weakest link

Despite the challenges, Europe continues to expand its renewable energy capacity. According to European Commission data, in 2024 nearly half (47.5%) of EU electricity was generated from renewable sources, with solar energy growing at a record pace – from just 1% in 2008 to 23.4% in 2024.

However, the pace of expansion and the readiness of infrastructure still fall short of actual needs, notes Dr Indrė Šikšnelytė-Butkienė, Associate Professor specialising in energy economics. She emphasises that increasing generation capacity alone is not enough – electricity grids must also be fundamentally strengthened and modernised.

The expert concludes that while renewable energy expansion is a key part of the energy transition, it does not in itself ensure the stability of the entire energy system without adequate infrastructure.

‘Although renewable energy capacity is growing rapidly, the expansion of electricity grids, energy storage solutions and system flexibility is developing much more slowly. Therefore, comprehensive modernisation of the entire energy system is essential to accelerate the transition, enhance its security and reduce vulnerability to external shocks,’ she explains.

The business and policy dilemma

Dr Evelina Gulbovaitė, a researcher in Department Tourism and Leisure Management, highlights that sustainability goals in corporate strategies are increasingly under pressure from short-term priorities. According to her, supply stability is often becoming more important than environmental performance.

‘The war has shown that companies are finding it increasingly difficult to reconcile long-term sustainability goals with urgent challenges related to energy security, supply stability and rising costs,’ she says.

A similar trend is observed by Dr Aistė Lastauskaitė, economist and Vice Dean for Science at the Faculty of Business. She says that the energy transition is not only a technological process but also a complex matter of political and economic balancing.

She notes that large upfront investments become a heavy burden during times of crisis: ‘While renewable energy promises long-term independence and stability, high initial investment costs and infrastructure requirements make it more difficult to pursue ambitious climate goals during periods of crisis.’

Future outlook: can Europe stay on course?

Although the pace of the green transition is slowing, the process has not stopped. Public support remains strong – recent Eurobarometer data show that 88% of Europeans support stronger action to expand renewable energy.

Dr Justas Štreimikis, a sustainability expert, warns that without clear political will, temporary crisis-management measures may become permanent. He says the need to remove bureaucratic barriers so that short-term decisions do not hinder long-term progress.

‘Short-term energy security challenges may still overshadow long-term climate goals. If economic and geopolitical pressures continue to dominate political decision-making, temporary crisis measures could slow down or even weaken the overall transition,’ he concludes.

Recent conflicts have made one thing clear: Europe must pursue two goals simultaneously – ensuring reliable energy supply in the short term while continuing long-term transformation. How successfully these priorities are balanced will have a decisive impact on Europe’s economic competitiveness and political stability in the future.

For this reason, researchers at Kauno kolegija emphasise that maintaining the direction of the green transition requires a clear political vision, decisive reduction of regulatory and financial barriers, and stronger strategic coordination across Europe.