European leaders on Thursday approved a ban on Russian coal, a source of imported energy that would be the easiest to replace, rather than punishing Russia for reports of atrocities in Ukraine.
Initially expected to arrive on Wednesday but has been delayed due to extended discussions among EU officials, the bloc’s latest round of sanctions includes a plan to cut Russian coal in four months. The original proposal suggested a brief, three-month withdrawal.
The slight slowdown in the decision-making process reflects the challenges of reaching an agreement on sanctions among the 27 member states, especially some bloc countries that are more dependent on Russian power than others. Sanctions must be approved by all member states.
And there were concerns that cutting off coal supplies could hurt the European Union more than Russia. Although the European Union relies on Russian coal, the bloc could easily replace it by importing from other countries rather than replacing natural gas and oil. But a ban on coal from Russia could push up energy prices for European consumers, due to existing shortages in the bloc, according to Ristad Energy, a consulting firm. Carlos Torres Diaz, a senior vice president at Ristad, called the possible sanctions “a double-edged sword.”
According to the European Union’s statistics office, Eurostat, 47 percent of coal coming to the European Union in 2019 was imported from Russia, making the country the most important supplier of energy. European Commission President Ursula von der Leyen estimates that coal is worth four billion euros a year.
Each member state has different energy needs, and Germany, the largest economy in the bloc, is among the most dependent on Russian power overall. About half of Germany’s coal imports come from Russia, up from last year 32.2 billion, according to official figures. Most used in power generation and power generation in the German steel industry.
Lignite, or brown coal, the only fossil fuel still mined in Germany, is burned to generate energy. It is the dirtiest fossil fuel, which is essential for efforts to stop burning coal. But 2021 proved to be less windy than expected, hurting the country’s wind power efforts and leading to a nearly 5 percent increase in coal-fired power for the year.
The government of Chancellor Olaf Schulz last year planned to release coal for the country at the beginning of the next decade, and last month, Vice Chancellor and Economy Minister Robert Habek said Germany would aim to free itself from Russian coal. At the end of summer
“We are well prepared for how we will enforce the coal embargo,” Mr Habek said on Wednesday.
Diplomats in Brussels said there were Germany and other countries More time has been sought for negotiations to complete existing orders and close existing contracts before the measure is implemented.
German companies have already renegotiated agreements with other coal-exporting countries, Mr Habek said. However, shipments already ordered and operated from Russia will not be stopped or returned, he added. “If we return those ships, we could run into shortages,” he told reporters in Berlin.
According to the German Coal Importers Association, an industry group representing companies that rely on coal supplies from abroad could help fill the gap by reducing coal imports from Russia to the United States, Colombia and South Africa.
In a telephone call Wednesday, Mr. Scholes and Colombian President Evan Duque Marquez discussed the war and the power in Ukraine, the chancellor’s office said.
Australia supplied about one-third of the European Union’s coal imports in 2019. Australian markets have already reported an increase in their coal prices, as European companies have come to them to inquire about energy.
Russia-Ukraine war and global economy
Poland is the European Union country that still relies heavily on coal. Although most of the country’s coal is mined internally, about 20 percent was imported from Russia last year.
Last month, Polish Prime Minister Mateus Morawiki proposed legislation to ban coal imports from Russia.
Shutting down Russia’s oil and natural gas will prove much more difficult. In the first three months of the year, Germany reduced its dependence on gas from Russia by 15 percent, according to Mr Habek. But industry leaders have warned against imposing sanctions on Russian natural gas, saying it could lead to significant job losses in the chemical, mining and pharmaceutical sectors.
Mr Habeck has introduced draft legislation to accelerate the expansion of renewable energy in Germany, focusing on more production through wind and solar energy.
But it will take several years to build the new terminal, which will allow liquefied natural gas to reach ships, proposing a replacement for Russian gas coming through the pipeline. And even if the approval processes are streamlined, it could take years for the terminals to be able to replace Germany’s energy mix of about 22 percent from natural gas.
Matina Stevis-Gridneff Contributing Reporting.