The European Union proposes to ban imports of Russian coal
Ukrainian President Volodymyr Zelensky addressed the UN Security Council on Tuesday, describing the violence and death suffered by Ukrainians at the hands of Russian troops.
These alleged war crimes prompted the EU propose its first energy sanctions on the government of Vladimir Putin since the invasion in February, in particular by banning imports of Russian coal.
This decision enjoys the support of Germany, which – until now – had rejected any embargo on Russian energy.
The EU depends on Russia for around 40% of its oil and natural gas needs. This figure is more like 20% for coal; it’s the low-hanging fruit of Europe’s transition away from fossil fuels.
“Anthrax is the most damaging to the environment, it is the easiest to wean off. There has been a movement in Europe for a decade now to stop using so much coal,” said Philip Nichols, who teaches at Penn’s Wharton School of Business.
Natural gas requires special pipelines or import terminals to move around the world. Coal, on the other hand, does not, noted Ian Lange, an associate professor at the Colorado School of Mines.
“Coal is basically quite easy to transport. It’s a solid. The ability to find other suppliers is easier,” Lange said.
Banning Russian coal will not necessarily mean a further increase in electricity prices in Europe, according to Samantha Dart, head of natural gas research at Goldman Sachs.
“When you think about how electricity prices are set, they’re usually set by your most expensive fuel. And it’s not coal right now, that fuel is already natural gas,” Dart said.
Natural gas flows from Russia actually increased during the war, said Guntram Wolff, director of Bruegel, the Brussels-based think tank.
“I mean, that’s where Putin and Russia are making a lot of revenue right now,” he said.
Even more revenue, thanks to soaring energy prices since the invasion began. Russia also made sure that Europe would need to buy plenty of gas once the war started, instead of relying on the fuel it already had in stock.
“Russia, before the war, really tried to cut energy supplies to reduce gas stocks. Now that the war has started, the gas storages are pretty empty,” Wolff said.
This makes it even more difficult for Europe to give up Russian natural gas.
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