European leaders, seeking to punish Russia for its role in alleged atrocities in Ukraine, are focusing on a ban on coal as the source of imported energy that would be the easiest to replace.
On Wednesday, deliberations on the ban and other sanctions were expected to continue on Thursday, and European Union officials and diplomats expected the measures to be approved by then. The process reflected the challenges of reaching an agreement among the 27 member countries on sanctions, which would also include banning Russian ships from EU ports.
If approved, the sanctions would be the toughest applied by the bloc since Russian President Vladimir V. Putin launched the invasion of Ukraine six weeks ago. Sanctions must be approved by all Member States.
Although the European Union depends on Russian coal, the bloc could replace it more easily with imports from other countries than it could replace natural gas and oil.
But Russia’s coal ban could drive up energy prices for European consumers, given existing shortages in the bloc, according to Rystad Energy, the consultancy. Carlos Torres Diaz, senior vice-president of Rystad, called the potential sanctions “a double-edged sword”.
Imports from Russia accounted for 47% of coal entering the European Union in 2019, according to the European Union’s statistics office, Eurostat, making the country the largest supplier of fuel. This represents 4 billion euros of coal per year, said Ursula von der Leyen, President of the European Commission.
Each member state has different energy needs, and among those most dependent on Russian energy overall is Germany, the bloc’s largest economy. About half of all coal imported by Germany comes from Russia, totaling last year €2.2 billion, according to government figures. Most of it is used to generate electricity and supply the German steel industry.
Lignite, or lignite, the only fossil fuel still mined in Germany, is burned to generate electricity. It is also the dirtiest fossil fuel, making efforts to stop burning coal urgent. But 2021 turned out to be less windy than expected, hurting the country’s wind power efforts and leading to a nearly 5% increase in coal-fired electricity for the year.
Chancellor Olaf Scholz’s government presented plans last year for the country to phase out coal by the start of the next decade, and over the past month Vice Chancellor and Economics Minister Robert Habeck said Germany would aim to wean itself off Russian coal by the end of the summer.
“The way we are going to implement a coal embargo is well prepared,” Habeck said on Wednesday.
Diplomats in Brussels say Germany and other countries that previously resisted a ban on Russian coal were granted a three-month hiatus, which would allow them to complete outstanding orders and terminate existing contracts. before applying the measure.
German companies have already renegotiated contracts with other coal-exporting countries, Habeck said. But shipments already ordered and underway from Russia will not be stopped or turned back, he added. “If we send these ships back, we could face a shortage,” he told reporters in Berlin.
According to the German Coal Importers Association, an industry group representing companies that depend on coal supplies from abroad, coal from the United States, Colombia and South Africa could help fill the void. left by removing imports from Russia.
In a phone call Wednesday, Scholz and Colombia’s President Iván Duque Márquez discussed the war in Ukraine and energy, the chancellor’s office said.
The Russian-Ukrainian War and the World Economy
Australia supplied nearly a third of the European Union’s coal imports in 2019. Australian markets have already reported a spike in their coal prices as European companies have turned to them for information on the fuel.
Poland is the EU country still most dependent on coal. While much of the country’s coal is mined domestically, around 20% was imported from Russia last year.
Last month, Polish Prime Minister Mateusz Morawiecki proposed legislation banning coal imports from Russia.
Cutting off Russia’s oil and natural gas supply will prove much more difficult. Germany has already reduced its dependence on Russian gas by 15% in the first three months of the year, according to Mr Habeck. But industry leaders have warned against imposing sanctions on Russian natural gas, saying it could lead to substantial job losses in the chemical, mining and pharmaceutical sectors.
Mr. Habeck introduced a bill to accelerate the expansion of renewable energy in Germany, focusing on wind and solar power generation.
But it will be several years before new terminals are built that would allow liquefied natural gas to arrive by ship, offering a replacement for Russian gas delivered by pipeline. And even if approval processes are streamlined, it could take years before terminals are able to replace the nearly 22% of Germany’s energy mix that comes from natural gas.
Matina Stevis-Gridneff contributed report.