Will Russian Gas Return to Europe? How sunk costs, incumbency and ideology shape post-2022 regulatory environments

Russia’s invasion of Ukraine has been a landmark moment for Russian gas in Europe. Having built ties for about five decades, and having become the continent’s main source of supply, Russia’s exports of gas to Europe in 2024 were back to the levels witnessed in the mid-1970s. Now, Russia is suddenly faced with a new reality: it’s been downgraded to a marginal supplier. And yet the question of the future of Russian gas looms on the horizon of European energy and climate policies. The present paper puts forward a political economy heuristic for explaining the past behavior and future choices in Europe’s gas trajectories, based on sunk costs, incumbency and ideology underpinning policy and regulatory environments. The key argument the paper makes is that these three tenets, or a combination thereof, allow to better understand why individual European countries went for Russian gas as a dominant source of supply in the past, and subsequently, why their policies on displacing Russian gas diverged since the onset of the war in Ukraine. By extension, it provides the basis of judging whether Russian gas may see a return to Europe, should Moscow’s war end and a window of opportunity opens up for revisiting external supply options.