This comes at a time when Europeans are under pressure to target with their sanctions Russia’s vital energy sector to force Russian President Vladimir Putin to stop his war, while Germany has expressed objection to a ban on coal imports for the time being.
Energy sector analysts believe that there are several alternatives for European Union countries to replace Russian coal, including the United States, Australia, Colombia and South Africa, explaining that its impact will be less severe if the embargo is proceeded, compared to Russian oil and gas.
A report by the German Economy Ministry showed that Berlin would likely have to stop operating some of its power plants if it ended imports of coal from Russia immediately, even though its dependence on Russia for that fuel is rapidly shrinking.
Today, the European Parliament adopted by a large majority a resolution calling for an “immediate and comprehensive” ban on all imports of “oil, nuclear fuel, coal and gas” from Russia.
Electricity needs
Despite calls to reduce its use due to its environmental impact, data from the International Energy Agency indicate that it is still the largest source of electricity generation in the world so far, providing about 38 percent of the global need for electricity, outperforming natural gas and renewable energy.
According to the agency’s data, the global production of coal exceeded 7.9 billion tons.
Russia exported 238 million tons of coal in 2021, with 90 million tons of that volume going to OECD countries, according to the US Energy Information Administration.
China ranked first in the world in consuming coal, with 4140109 thousand tons last year, far ahead of India, which consumed 932,189 thousand, then the United States third with 650,302 thousand, Russia fourth with 238,444 tons, and Germany fifth with 225,249 thousand.
In exclusive statements to “Sky News Arabia,” Ahmed Ismail, a political economy consultant based in Paris, said that Russia is the largest supplier of coal in the European Union with about 45 percent of imports, while Germany, Poland, Italy and the Netherlands are the largest importers of Russian coal in the European Union.
Ismail explained that the European Union plans to phase out imports of Russian coal in a period of 3 to 4 months, by mid-August, as expected, affecting the Russian economy with a loss of 4 billion euros annually.
easy alternative
The political economy consultant noted that replacing Russian coal is an easier task compared to replacing gas and oil, and it is likely that the United States, Australia, Colombia and South Africa will be able to fill that gap.
He added that EU countries could also increase domestic production, if urgent needs occurred, and for that to happen, European authorities could relax strict environmental rules that were imposed as part of the EU’s clean energy transition plans, however, the increase in demand is expected to have an impact. On global coal prices, which will rise, European companies and households are likely to face higher energy bills.
In turn, the expert in the oil and gas sector and founder of the company “Ferrosi” for investment management and financial advisory, Cyril Widdershofen, said in statements to “Sky News Arabia”, that finding other options for coal is not easy, in recent years, coal production has been reduced, and at the same time, coal production has not been move for investments in coal mining
“If we ban coal, others will be needed, and perhaps one option is Australia, which has been hit recently by coal conflicts with China,” he added.
We are heading into summer, so the need for natural gas and coal will be less in the coming months, and some politicians are basing their decisions on better weather, higher temperatures, and more solar and wind energy, but the result is still not clear, as temperatures were The heat in the past weeks is much lower than at any time in the past century.
The European Commission this week proposed to the 27 member states to stop their purchases of Russian coal, and to close European ports to Russian ships.
But an EU source said that the EU envoys are scheduled to agree to a complete ban on the import of Russian coal, starting in mid-August, to postpone the ban for an additional month, after German pressure.
Earlier, European Union spokesman, Luis Miguel Bueno, told “Sky News Arabia” that the European Union is working to mitigate the effects of high energy prices, diversify gas sources in the coming winter, and accelerate the transition to clean energy.
political issue
Widdershofen believes that banning Russian coal from entering Europe is a political issue, based not only on the Ukraine war and the atrocities in Bucha and elsewhere, and the main reason is also that due to the potential shortage of oil and gas at the moment, European energy is moving towards increased coal use in general. This contradicts strategies to reduce hydrocarbon use and emissions.
Coal is currently working to raise emissions in general in the European Union, so the ban measures are linked to this matter, according to the expert specializing in the oil sector.
Widdershofen underestimated the impact of the expected ban on Russian coal imports on the markets, saying that given the role of Russian coal, which is mainly directed to markets such as Germany, it will not have a strong impact overall, and the same is the case for Russia at the same time, which represents about 1.5 to Only 3 percent of total energy exports, so the impact would not be too strong for Moscow.
He added: “In general, the coal sanctions are just another increase in the overall sanctions applied, noting that the mood of European politicians is changing, they are even considering and wanting to block Russian energy supplies in the future, and therefore it should be considered a clear signal and not an increase harmful to sanctions that force Putin to end his war.”
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