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EU Pushes To Break “Energy Taboo” With Proposed Ban On Russian Coal Imports

Courtesy of ZeroHedge View original post here.

Not to be outdone by tiny Lithuania (which claims to have officially weaned itself off Russian gas imports by building an LNG terminal), the European Commission has devised a controversial proposal to ban imports of Russian coal, along with a host of other measures comprising a new sanctions package to be introduced on Tuesday, according to reports from WSJ, Reuters and a host of other media outlets.

Along with banning imports of Russian coal, the package also calls for an import ban on rubber, chemicals and other products from Russia worth up to €9 billion a year.

If passed, the proposal would mark the first energy sanctions on Russia since the start of the conflict in Ukraine. Although it wouldn't touch oil and gas, such a ban would break the so-called "energy taboo", according to Bloomberg's Javier Blas.

While thermal coal isn't nearly as critical as oil and gas, it's still a "big deal," Blas pointed out.

Coal-fired power plants are still being used across the EU, though most member states expect to completely phase them out by 2030. Russia has the second-largest coal reserves in the world. In 2020, it mined 328 million metric tons, making it the sixth-largest producer globally. According to Eurostat data, nearly half of the bloc's coal comes from Russia.

Source: Visual Capitalist

Despite the country's heavy dependence on Russian energy, a German government source (according to Reuters) said the country would support a ban on Russian coal imports (so long as oil and gas are left alone).

Here are some other details from the proposal (as reported by Reuters):

  • Russian vessels and trucks will also be prevented from accessing the EU, further crippling trade with Russia, the source said, adding that exceptions will be made for energy products, food and medicines.
  • The EU will also ban all transactions with VTB (VTBR.MM) and another three Russian banks which had already been excluded from the SWIFT messaging system, the source said.
  • Dozens more individuals, including oligarchs and politicians, will be added to the EU sanction list, the source said.

Over the last 24 hours, several European leaders – most notably French President Emmanuel Macron – have stepped up calls for a ban on Russian energy exports (specifically coal and gas), per the FT.

"There are very clear indications of war crimes," Macron said in an interview on France Inter radio on Monday. "What happened in Bucha demands a new round of sanctions and very clear measures, so we will co-ordinate with our European partners, especially with Germany."

"I think that on oil and coal we must be able to move forward. We should certainly advance on sanctions…We can’t accept this."

Finance Minister Bruno Le Maire reiterated that France would support the import bans, and told reporters before a meeting of EU finance ministers Tuesday that "we will see what the position of the other members will be" (EU sanctions must be decided unanimously by all 27 member states).

Of course, Germany and other states dependent on Russian energy have warned that the bloc shouldn't jump to conclusions without carefully weighing the consequences.

Yesterday, European Commission VP Valdis Dombrovskis said that oil and coal sanctions “are definitely an option”, while Commissioner for Economy Paolo Gentiloni said these sanctions definitely weren't "off the table".

Other potential escalations could involve blocking new machinery exports to Russia, targeting Russian oligarchs and some family members and slashing the access of Russian road and shipping goods carriers into the bloc.

Any proposal would still need backing from the bloc’s 27 member states.


This entry was posted on Tuesday, April 5th, 2022 at 7:15 am and is filed under Immediately available to public. You can leave a response, or trackback from your own site.

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