Germany Struggles with Oil and Gas After the Russian Ban

Germany Struggles with Oil and Gas After the Russian Ban

Some German power plant operators had previously prepared for sanctions announced last week for several months. It was because of questionable Russian behavior, they said.

Late on April 7, the European Union reported a fifth packet of sanctions against Russia because it invaded Ukraine. Besides sanctioning individuals and limiting shipping, the EU’s packet contained a ban on Russian coal imports from August onwards.

The German Association of Coal Importer’s chairperson, Alexander Bethe, admitted that they saw holds in Russian coal deliveries since last September.

His industry association, also known as the VDKi, conveys the interests of the imported challenging coal market there.

He told Al Jazeera that they thought it was due to coronavirus. That’s what their Russian partners told them.

Then, Stephan Riezler, a senior manager at STEAG Group, one of the biggest power producers in Germany, started seeing pictures of the military build-up on Ukraine’s borders.

And so, some German coal importing companies began searching for alternative suppliers weeks ago.

Higher Prices and Complex Logistics Ahead

Last week, a poll of VDKi members found that 79 percent say they would be capable of managing without Russian coal.

Last year, Germany imported 41.1 million tons (37 million tonnes) of coal, as stated by the VDKi.

About half of the country’s hard coal (used for heating) and three-quarters of its steam coal (used for power production) come from Russia. In 2021, Germany paid Russia approximately 2.2 billion euros ($2.4bn). Europe buys nearly 8 billion euros ($8bn) worth of coal from Russia yearly.

Most of that will now be substituted by shipments from other countries like Australia, South Africa, and Indonesia. There will be more elevated prices and logistical hassles. Still, coal from Russia could be replaced within months, as the VDKi mentioned earlier in March.

But restricting Russian coal is the most comfortable of the EU’s options on energy sanctions.