ABSTRACT
This chapter analyses Azerbaijan and the prospect of EU relations with it under decarbonisation. Azerbaijan is highly dependent on the production and export of oil and gas. Accordingly, while the development of its oil and gas resources has in general helped to advance welfare and has provided for political stability in the twenty-first century, its economic development has fluctuated with the world market price of oil and gas. Efforts to diversify the economy have had limited effect so far but provide an important entry point for developing EU-Azerbaijan relations beyond fossil fuels. Azerbaijan also faces serious issues regarding state legitimacy and repression as well as security challenges in the context of the conflict with Armenia over Nagorno-Karabakh. The case study demonstrates that EU-Azerbaijan cooperation can build on a firm and broad institutional framework. The EU is Azerbaijan’s most important trading partner, accounting for nearly half of the latter’s trade. While energy and especially oil and gas have been key to EU-Azerbaijan relations, cooperation on both renewable energy and education holds significant potential.
