Dangerous Assets? The Securitization of Foreign Capital in the European Energy Sector

The transition to low-carbon energy systems is one of the biggest challenges facing the world and one that requires massive investments and international cooperation. However, the current (geo)political context suggests declining stocks of trust among relevant actors, which undermine chances of international collaboration and transnational exchange. One of the areas that encapsulates this rising mistrust is foreign investment. Although there is a large global investment capacity, particularly by emerging economies, this has also raised concerns about the risks that foreign investments by State Owned Enterprises and Sovereign Wealth Funds can pose in sensitive domains such as the energy sector, in terms of greater vulnerability to political pressure, cyber-attacks or industrial espionage. In Europe, several EU member states and the EU as a whole have introduced tighter screening mechanisms on foreign investment, targeting specifically the energy sector. This paper investigates the extent of this phenomenon, presenting a new dataset encompassing legislative changes and cases of screened/blocked foreign investment in the energy sector in EU member states. Conceptually, the paper examines these trends from the perspective of securitization theory, discussing the mechanisms and practical implications of the (over)extension of the notion of national security to economic interactions.