Azerbaijan's Future: Could Eu Membership Be Possible?

Azerbaijan has been developing its relationship with the European Union (EU) since 1991, and the two have become increasingly close. Azerbaijan is part of the European Neighbourhood Policy (ENP) and the Eastern Partnership initiative, and a member of the Organisation of the Black Sea Economic Cooperation (BSEC). The EU is Azerbaijan's biggest trading partner, export market, and investor. Azerbaijan is also a strategic energy partner for the EU, supplying around 4.3% of its oil imports. While Azerbaijan has been working towards aligning some of its legislation with European Union norms and standards, it has shown no interest in joining the EU, instead pursuing a policy of neutrality and prioritising energy cooperation.

Azerbaijan's relationship with the EU

Azerbaijan and the European Union have a long history of cooperation and collaboration. Since Azerbaijan's independence from the Soviet Union in 1991, the country has sought to develop its relationship with the EU, becoming a member of the Council of Europe in 2001 and signing the Partnership and Cooperation Agreement (PCA) with the EU in 1996, which came into force in 1999.

The EU is Azerbaijan's primary trading partner, with the EU being the biggest market for Azerbaijan's exports and imports, and the EU is also the biggest investor in Azerbaijan. The PCA agreement established the basis for cooperation in all areas except the military, and the EU has provided over 600 million euros of bilateral assistance to Azerbaijan since 1992.

Azerbaijan has also been a part of the European Neighbourhood Policy (ENP) since 2004 and the Eastern Partnership initiative since 2009, which have aimed to deepen economic integration and increase political cooperation. In 2016, a protocol was adopted to allow Azerbaijan to participate in EU programmes and agencies, with a focus on infrastructure investment, partial economic integration, and oil extraction partnerships.

However, Azerbaijan has not shown interest in joining the EU, instead pursuing a policy of neutrality and seeking to maintain an independent foreign policy. The country has prioritised energy cooperation with the EU, becoming a strategic energy partner and contributing to the Southern Gas Corridor initiative, which aims to bring Caspian, Central Asian, and Middle Eastern gas resources to European markets.

While Azerbaijan has worked with the EU on various political agreements, there have been criticisms of the Azerbaijani government regarding human rights and democracy. The EU has also been criticised by Azerbaijan for its stance on the Nagorno-Karabakh conflict with Armenia, which has contributed to skepticism about European integration within Azerbaijan.

Overall, while Azerbaijan and the EU have a close relationship, particularly in economic and energy matters, Azerbaijan has chosen to prioritise cooperation over integration, maintaining its independence and neutrality in global affairs.

The EU-Azerbaijan Partnership and Cooperation Agreement

The PCA establishes economic cooperation to strengthen business links and develop market-based rules and practices for trade in goods and services. It also includes a commitment to liberalise trade, in line with World Trade Organisation (WTO) rules.

The PCA outlines four key objectives:

• To provide an appropriate framework for the political dialogue between the Parties, allowing the development of political relations.
• To support Azerbaijan's efforts to consolidate its democracy and to develop its economy and complete the transition into a market economy.
• To promote trade and investment and harmonious economic relations between the Parties and foster their sustainable economic development.
• To provide a basis for legislative, economic, social, financial, civil, scientific, technological, and cultural cooperation.

The PCA also includes a commitment to respect democracy, principles of international law, and human rights, as defined by the United Nations Charter, the Helsinki Final Act, and the Charter of Paris for a New Europe.

The PCA is currently being updated, with negotiations on a new and upgraded framework agreement at an advanced stage. The new agreement will reflect the enhanced and mutually beneficial EU-Azerbaijan cooperation in a wide range of areas, strengthen policy dialogue in key sectors, and boost trade.

Azerbaijan's membership of the Council of Europe

Azerbaijan has been a member of the Council of Europe since 25 January 2001, becoming the 43rd member state. The Council of Europe is the continent's leading human rights organisation, with 46 member states, including all members of the European Union. All members have signed the European Convention on Human Rights, a treaty designed to protect human rights, democracy and the rule of law.

Azerbaijan has also been accused of corruption, with allegations of "caviar diplomacy" and bribery of Council of Europe members to suppress negative information about its human rights record. In 2018, 13 members of the Parliamentary Assembly of the Council of Europe were expelled for accepting bribes from Azerbaijan. Despite these controversies, Azerbaijan remains a full member of the Council of Europe.

Azerbaijan's membership in the Council of Europe has not led to significant improvements in its democratic standards and human rights record. Since joining, the country has not held an election deemed free and fair by international observers, and it has been ruled continuously by Heydar Aliyev and his son Ilham Aliyev. There have been ongoing disputes with the Council of Europe over the holding of political prisoners, with Azerbaijan denying the allegations. In 2014, it was estimated that Azerbaijan held more political prisoners than any other Council of Europe country.

The Southern Gas Corridor

The route from Azerbaijan to Europe consists of three pipelines: the South Caucasus Pipeline, the Trans-Anatolian Pipeline, and the Trans Adriatic Pipeline. The total investment in this route is estimated at US$35 billion. The main supply source is the Shah Deniz gas field in the Caspian Sea, which is located in the Azerbaijani sector of the sea. The field is expected to provide an initial ten billion cubic meters of gas per year to Europe, with an additional six billion cubic meters per year to Turkey.

Azerbaijan's energy cooperation with the EU

Azerbaijan is a strategic energy partner for the EU, currently supplying around 4.3% of the EU's oil imports. The Southern Gas Corridor is a key initiative to bring gas from the Caspian Sea to European markets, enhancing the security of energy supply to Europe. The corridor consists of the expansion of the existing South Caucasus Pipeline from Azerbaijan to Georgia and Turkey, the Trans-Anatolian Pipeline, and the Trans-Adriatic Pipeline, which transports gas to Italy, Greece, and Bulgaria.

The EU and Azerbaijan have a shared interest in the Southern Gas Corridor, which has evolved to include cooperation on renewable energy and electrification. In 2024, the EU and Azerbaijan signed a Memorandum of Understanding (MoU) on wind energy cooperation, allowing European renewable energy companies to tap into Azerbaijan's wind power potential. This is a significant step towards clean energy transition in the region and a potential new renewable energy supply for Europe.

Azerbaijan is also a partner in the EU INOGATE energy programme, which aims to enhance energy security, support sustainable energy development, and attract investment for energy projects. In 2019, Azerbaijan joined the Eastern Europe Energy Efficiency and Environment Partnership (E5P), and the EU has provided further support in the energy sector through the EU4Energy initiative.

The EU is Azerbaijan's first trading partner, representing 48.6% of its total trade. The EU is also Azerbaijan's biggest export and import market, with a 60.7% and 31.8% share, respectively. In 2023, Azerbaijan earned 19 billion euros from oil and gas sales to the EU, and projections indicate that gas revenues will surpass those from oil in 2024.

While Azerbaijan only meets a fraction of Europe's gas demand, it is a crucial alternative to Russian gas, particularly for Bulgaria, Italy, Greece, Romania, and Hungary. There are plans to expand Azerbaijani gas supplies to other EU nations, and the country plans to sell about half of its annual gas production of nearly 50 billion cubic meters to the EU.

The strong interdependence between the EU and Azerbaijan in the energy sector makes a major rift highly unlikely, despite tensions over human rights and diplomatic friction with France. Both parties actively work to strengthen their energy and trade ties, even as Baku pursues a "business only" arrangement with Brussels.

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