European leaders, seeking to punish Russia for its role in suspected atrocities in Ukraine, are pushing for a ban on coal as the imported energy source that would be easier to replace.
Deliberations on the ban and other sanctions are set to run on Wednesday through Thursday, and EU officials and diplomats expected the measures to be approved by then. The operation reflected the challenges of reaching agreement among all 27 member states on the sanctions, which would also include banning Russian ships from EU ports.
If approved, the sanctions would be the bloc’s toughest since Russian President Vladimir Putin launched his invasion of Ukraine six weeks ago. Sanctions must be approved by all member states.
Although the European Union relies on Russian coal, the bloc could more easily replace it with imports from other countries than it would natural gas and oil.
But a coal ban from Russia could drive up energy prices for European consumers, given the current shortage of mass, according to consultancy Rystad Energy. Carlos Torres Diaz, vice president of Rystad, described the potential sanctions as a “double-edged sword”.
Imports from Russia accounted for 47 percent of coal coming into the European Union in 2019, according to the European Union’s statistics office, Eurostat, making the country the most important supplier of the fuel. That amounts to €4 billion in coal per year, said Ursula von der Leyen, the president of the European Commission.
Each member state has different energy needs, and among the countries most dependent on Russian energy in general is Germany, the bloc’s largest economy. Almost half of all coal imported by Germany comes from Russia, in total last year €2.2 billion according to government figures. Most of it is used to generate electricity and run Germany’s steel industry.
Lignite, or brown coal, the only fossil fuel still mined in Germany, is burned to generate power. It is also the dirtiest of fossil fuels, adding urgency to efforts to stop coal burning. But 2021 has proven less windy than expected, hurting the country’s wind energy efforts, and leading to a nearly 5 percent increase in coal-fired power for the year.
Chancellor Olaf Schulz’s government made plans last year for the country to quit coal by the start of the next decade, and last month, Vice Chancellor and Economy Minister Robert Habeck said Germany would aim to move away from Russia. Coal at the end of summer.
“The way we are going to implement the coal ban is a good way,” Mr. Habek said on Wednesday.
Diplomats in Brussels said Germany and other countries that had previously resisted a ban on Russian coal had secured a three-month gap, which would allow them to complete existing orders and terminate existing contracts before the measure could be implemented.
Mr. Habeck said German companies had already renegotiated contracts with other coal-exporting countries. He added that shipments that have already been ordered and are taking place from Russia will not be stopped or returned. “If we put those ships back in time, we could run into a shortage,” he told reporters in Berlin.
Coal from the United States, Colombia and South Africa could help fill the remaining gap by cutting off imports from Russia, according to the German Coal Importers Association, an industry group representing companies that depend on coal supplies from abroad.
In a phone call on Wednesday, Mr. Schulz and the President of Colombia, Ivan Duque Marquez, discussed the war in Ukraine and energy, the chancellor’s office said.
The Russo-Ukrainian War and the Global Economy
Australia provided nearly a third of EU coal imports in 2019. Australian markets have already reported higher coal prices, with companies in Europe turning to them to inquire about fuel.
Poland is the European country that is still highly dependent on coal. While much of the country’s coal is mined domestically, nearly 20 percent was imported from Russia last year.
Last month, Polish Prime Minister Mateusz Morawiecki proposed legislation to ban coal imports from Russia.
Cutting oil and natural gas from Russia will be much more difficult. Germany has already reduced its dependence on gas from Russia by 15 percent 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 they could lead to significant job losses in the chemical, mining and pharmaceutical sectors.
Mr. Habeck has introduced a bill to speed up Germany’s expansion of renewable energy, focused on generating more through wind and solar power.
But it will be several years before new terminals are built that would allow LNG to arrive by ship, providing an alternative to Russian gas coming through the pipeline. And even if approval processes are streamlined, it could take years before terminals can replace the roughly 22 percent of Germany’s energy mix that comes from natural gas.
Matina Stevis Gridnev Contribute to the preparation of reports.