Backing down means handing the victory to Russia, which is politically costly in the short term and probably not financially cheaper in the long term. Whether europe wants it or not, they are involved in a war, and you can't just back down in a war without consequences.

You could also argue that the current prices are just a teaser of what's coming anyway so more incentive to innovate now instead of later. Very harsh and not completely true, but I think there's a little bit of truth to it