Powering Forward

The EU’s renewed urgency to end its reliance on Russian fossil fuels has focused attention in Washington and European capitals on energy-related commitments in the US-EU trade deal concluded in July. In that accord, Brussels agreed to procure up to $750 billion in American-produced energy by 2028.

The headline figure was widely seen as aspirational when it was announced. Meeting it, after all, would require a wholesale reconfiguration of European fossil fuel demand and US supply. An August joint statement outlining the deal’s terms—the EU “intends” to procure American energy products with an “expected” offtake value of $750 billion—offers political flexibility, treating the figure as a ceiling rather than a binding target.

EU energy imports from the United States are almost certain to rise in the coming years whether or not a proposed ban on Russian oil and gas making its way through EU institutions this fall becomes law. In addition, the Trump administration’s “energy dominance” agenda seeks to expand exports of oil and gas and to advance US nuclear power, data centers, and regulatory decisions in the EU and multilateral forums that favor American companies.

Parsing the deal’s language shows where challenges remain and where paths forward exist. Section 5 commits both sides to “secure, reliable, and diversified energy supplies”, including by addressing nontariff barriers. That is also the section that notes the EU’s intention to procure US liquefied natural gas (LNG), oil, and nuclear products with an expected offtake value of $750 billion through 2028. Section 6 adds that European companies are “expected to invest an additional $600 billion across strategic sectors in the United States”.

Assuming the trade deal remains the core framework for US-EU economic relations through the end of the Trump presidency, how can both sides preserve the agreement’s strategic intent while adapting to geopolitical and market realities? There are five key points to consider when answering these questions.

The “offtake value of $750 billion” probably will not be met. Focusing on Russian gas replacement and high-visibility investment and offtake “wins” can help manage expectations.

“Offtake value” is a shaky foundation for real, rather than political, targets. The term refers to the estimated value of long-term supply deals among energy companies. But those contracts, often running 20 to 30 years, are based on volumes, not dollar amounts. Total value shifts with market prices, exchange rates, and contract terms, while credible energy forecasts used to predict prices vary significantly.

The $750 billion figure also obscures big differences among energy products. As of mid-2025, the United States supplied roughly 54% of Europe’s LNG and 14% of its oil. Russia supplied 14% of Europe’s LNG during the same period. But oil makes up 65%–70% of US-EU energy trade by value, while LNG accounts for about 29%. To reach a $250 billion annual offtake, Europe would need to import more than half its oil from the United States, far above today’s 14%. Yet Europe’s oil demand has peaked, and much supply is already locked in through long-term contracts with Norway, Kazakhstan, and other countries.

LNG is the more plausible growth area. Although smaller in value and also facing declining demand, it has strategic importance because gas prices heavily influence Europe’s electricity costs. More American LNG could replace Russian supply but not on a one-to-one basis or at the scale implied by the $750 billion goal. In 2024, the EU imported about 80 million tonnes of LNG; the United States supplied half of it by volume, worth about $20 billion. Hitting the deal target would mean buying far more gas than Europe needs, especially as oversupply puts downward pressure on global LNG prices as of 2026.

A more realistic benchmark would link progress to replacing Russia’s phased-out volumes, potentially worth an additional $7–$8 billion a year in US LNG imports. Framing this as a milestone for energy security and substitution, rather than an inflated dollar amount, would fit market conditions and political goals.

A handful of new 20-year LNG contracts between US exporters and European utilities, each worth roughly $20 billion, could provide political headlines, supported by steady oil trade. The broader challenge will be agreeing on which purchases and investments count toward the total and avoiding accusations that Europe failed to meet its side of the deal.

The United States and the EU are home to multinational firms working across value chains. Expansively but credibly interpreting their trade and investments will facilitate the deal.

Neither Washington nor Brussels directly buys or sells energy. Transactions are carried out by private companies, some state-affiliated in Europe, and are shaped by incentives, licensing, and regulations.

Defining an “EU purchase” is not straightforward in a globalized market, especially for oil and gas. European firms are major investors in the US LNG industry, and they are importers to Europe, where they may reclassify cargoes for domestic use or resell them elsewhere. TotalEnergies, a French multinational energy and petroleum company, for instance, holds stakes in US export projects such as Cameron LNG, and channels some volumes to France and other European countries. But TotalEnergies also sells much through its global trading arm, often to its own subsidiaries.

Whether such transactions count toward “EU purchases” depends on how negotiators define qualifying deals. Washington’s political goals blur investment and offtake, and seek to package energy exports with other deals. Accountants will not be going through transactions with a fine-toothed comb, but officials should work with the private sector to turn this ambiguity into an advantage by emphasizing deep transatlantic energy-market integration and refocusing on measurable investments and infrastructure growth rather than rigid purchase accounting.

Legislation could help mitigate risks from political shifts, strategic misalignment, and global market fluctuations, all of which affect “secure, reliable, diversified” supply noted in the trade deal.

For Europe, rising dependence on US LNG brings risks different from those associated with declining reliance on Russia.

Policy risk: The proposed EU ban on Russian fuels is a direct response to Moscow’s weaponizing its control over energy exports. The United States will not do the same, but it has re-politicized such exports by using them as leverage in trade deals and other negotiations. At the same time, LNG sales are subject to regulatory and policy shifts. The Department of Energy must review applications to export to the EU, as the bloc has no free trade agreement with Washington. Also, the Federal Energy Regulatory Commission must license export terminals. The Trump administration is acting to accelerate processes, but politics can change. The link between gas exports and domestic electricity prices is complex, yet rising US power prices are a growing political problem and could unleash pressure to keep more gas at home. Legislation would provide some certainty, especially since future administrations may take a different line on facilitating exports. Congress has proposed but not passed bills that would require fast-track approvals for gas exports to NATO members and Ukraine (e.g., this year’s American Gas for Allies Act in the House of Representatives and a similar Republican-led proposal in the Senate).

Market risk: US-EU trade operates within a global energy market that is reaching an oil and gas supply glut. The American LNG industry is in a boom phase, but a bust may be coming. Global demand is softening in key markets such as China, Pakistan, and Europe, where clean energy is expanding rapidly. Many US producers are burdened with debt, and face shrinking margins and potential project cancellations as oversupply meets weaker demand. These challenges are beginning to play out in the courts. Venture Global, a major US LNG exporter, recently lost a $1 billion arbitration case to BP, potentially undermining confidence among European offtakers in American suppliers’ reliability just as Europe grows more dependent on their LNG. Lower prices due to oversupply may favor EU consumers, but the industry’s shifting economics may lead European buyers to push for shorter, more flexible deals over long-term agreements sought by the Trump administration.

Strategic risks on diversification: The EU faces major dilemmas in balancing its commitments under the deal with further diversification toward renewables, which are outside the scope of this paper. In the short term, new frictions with the United States could arise over Europe’s intention to continue clean or climate-related cooperation at the sub-federal level. Brussels’ freshly published “global climate and energy vision” elides its dependence on US fossil fuels, highlighting vastly different strategic ambitions. Finally, relying too heavily on US fossil-fuel supply, even if prescribed by political agreement, could limit diplomatic flexibility, constraining efforts by EU member states and national energy champions to pursue other partnerships, such as with Ukraine, Algeria, or Caspian countries, which are vital to a balanced strategy.

Nontariff barriers are a significant irritant for the United States, but forward-looking carbon policies could be a source of alignment in an era of renewed economic statecraft.

The trade deal explicitly references the EU’s Carbon Border Adjustment Mechanism (CBAM) and the Corporate Sustainability Due Diligence Directive (CSDDD). Ongoing talks on EU methane regulations are not mentioned but have an impact on the LNG trade. Many US firms view these as trade barriers.

European Commissioner for Energy and Housing Dan Jørgensen has ruled out withdrawing the bloc’s methane regulations or rolling back climate rules to satisfy US concerns. Many EU lawmakers warn that exemptions for US oil and gas producers would undermine European climate credibility. Perceived or real concessions specific to the United States could weaken Europe’s position with India (in free trade agreement talks, where CBAM is already being challenged) and Qatar (another major LNG supplier and opponent of CSDDD).

Yet there is room for pragmatic alignment. The EU’s moves to streamline CBAM and CSDDD implementation began before the trade deal but have been read in Washington as a positive gesture and a win for the Trump administration. US policymakers increasingly recognize that taking a neutral stance on CBAM could benefit American industry, given its relatively low emissions intensity. Congressional proposals such as a Foreign Pollution Fee and expressed bipartisan support for similar measures resonate in an era of tariffs.

A transatlantic approach to carbon border measures could yield joint leverage against high-emission imports, particularly from China. Cooperation also represents an opportunity for the United States and the EU to lead a future carbon border adjustment club that includes Australia, Canada, Norway, and the United Kingdom. Such an effort could then draw countries such as Brazil, which is engaged in major carbon pricing diplomacy and watching CBAM carefully, closer to transatlantic policies.

Timelines on nuclear energy projects are lengthy, but strategic investments and policy planning could lay the foundation for long-term transatlantic energy security.

The European Commission clarified in August that the deal’s language on nuclear includes US reactors and services, not just fuel. A shift toward more US-origin designs and services could move trade figures, though flexible accounting would still be needed.

Nuclear power is the source of 20%–25% of EU electricity, and Russia remains a significant supplier of enriched uranium for the plants it designed. Washington and Brussels have accelerated investment in fuels compatible with these facilities, and the trade in such fuels is strategically vital. But it is a niche business that is commercially insufficient for reaching headline targets.

More significant is rising interest in advanced nuclear technology, including small modular reactors (SMRs). Poland’s Synthos Green Energy and Hungary’s Hunatom recently agreed to develop up to 10 GE Vernova BWRX-300 SMRs, with support from the US State Department’s SPRING initiative. Slovakia has a cooperation deal with the United States to develop a new large Westinghouse reactor. Equinix, an American firm, has signed nuclear-power agreements with European suppliers, linking data-center demand with SMR deployment. Collectively, these and other moves highlight growing transatlantic alignment on advanced nuclear technology, supply-chain cooperation, and investment.

But in nearly all these cases, deployment is unlikely before the 2030s. In the absence of finalized deals before the end of the Trump presidency, a productive approach could build on work by the Nuclear Energy Agency and other bodies to quantify and develop the strategic implications of transatlantic trade and investment in this sector. The United States, Europe, Canada, and select partners in the Organization for Economic Co-operation and Development can work to identify shared priorities and challenges posed by China’s rapid nuclear expansion, including its promotion of low-cost SMR projects in Central and Eastern Europe. Such an initiative would complement existing efforts to promote policy coordination on supply chains, technology standards, export financing, and fuel security—all of which would strengthen transatlantic competitiveness and reduce vulnerabilities related to Russian and Chinese nuclear influence.