EU proposes ban on Russian coal in new sanctions

Brussels (AFP) – The European Union’s executive branch on Tuesday proposed a ban on coal imports from Russia, in what would be the first EU sanctions targeting the country’s lucrative energy industry over its war in Ukraine..

European Commission President Ursula von der Leyen said the European Union needs to increase pressure on Russian President Vladimir Putin after what she called “heinous crimes” committed across Kyiv, with evidence that Russian forces may have deliberately killed Ukrainian civilians.

Von der Leyen said the ban on coal imports is worth 4 billion euros ($4.4 billion) a year and that the European Union has already begun work on additional sanctions, including on oil imports.

It did not mention natural gas, with the 27 European Union countries unanimous in targeting the fuel used to generate electricity and heat homes It is difficult to secure amid opposition from gas-dependent members such as Germany, the bloc’s largest economy.

So far, Europe has not been ready to target Russian energy due to fears that it will plunge the European economy into recession. Europe’s dependence on Russian oil, natural gas and coal Finding consensus on energy measures is a daunting task, but recent reports of civilian deaths have increased pressure for tougher EU sanctions.

The United States and the United Kingdom announced earlier that they would cut off Russian oil. Individual EU countries have announced efforts to reduce their energy dependence on Russia: Poland says it plans to block imports of coal and oil from the country, while Lithuania said it no longer uses Russian natural gas.

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“Having a clear position is crucial not only for us in Europe, but also for the rest of the world,” von der Leyen said. A clear position against Putin’s choice of war. – A clear position against the massacre of civilians. And a clear position against violating the basic principles of the world order.”

Coal represents 20 million euros in revenue for Russia from Europe per day at current prices, compared to 850 million per day for oil and gas, said energy policy expert Simone Taglipitra of Bruegel Research Center in Brussels.

He said the coal ban “is important because it breaks the energy embargo”, but it “does not change the rules of the game. … Targeting coal at the moment is very wise, it is very symbolic and the time for symbolic actions is over.”

It’s not coal that Putin gets rich or keeps the war funding. The big influx of money is definitely oil and gas, not coal, and that’s the problem.”

The proposal still has to be adopted unanimously by all 27 EU countries, and is included in a new package of sanctions.

Other measures proposed by the European Union’s executive body include sanctions against more individuals and four major Russian banks, among them VTB, Russia’s second largest.

“These four banks, which we have completely isolated from the markets, account for 23% of the market share in the Russian banking sector,” von der Leyen said. “This will further weaken the Russian financial system.”

The union will also ban Russian and Russian-operated ships from EU ports, except for essentials such as agricultural and food products, humanitarian aid and energy.

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More targeted export bans, worth €10 billion, have also been proposed in sectors including quantum computers, advanced semiconductors, sensitive machinery and transportation equipment.

“With this, we will continue the deterioration of Russia’s technological and industrial base,” von der Leyen said.

But energy was the focus. EU Trade Commissioner Valdis Dombrovskis said 62% of Russia’s exports to the EU were hydrocarbons last year.

“If we really want to affect the Russian economy, that’s where we need to look,” he said. And that is exactly what is under discussion about this sanctions package.

Because of its climate ambitions, the European Union has been staying away from coal for years. Coal use fell from 1.2 billion tons per year to 427 million tons between 1990 and 2020, but imports rose from 30% to 60% of coal use.

The European Union imported 53% of hard coal from Russia in 2020, which is 30% of the European Union’s consumption of hard coal.

It will be easier to replace Russian coal than natural gas because coal comes by ship and there are many global suppliers. The German Association of Coal Importers said last month that Russian coal could be replaced “in a few months”.

But the shift could mean increased import demand from Europe and higher global coal prices, with significant impacts on emerging and developed economies that also depend on coal.

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Journalist Barry Hutton in Lisbon, Portugal contributed to this story.

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