European leaders have planned to phase out Russian coal imports in response to harrowing scenes in Bucha, a suburb of Kyiv.
On Tuesday, the European Commission proposed a phased ban of €4 billion ($4.3 billion) worth of Russian coal imports per year as part of a fifth package of sanctions designed to further diminish Russian President Vladimir Putin’s war chest. Other proposals target Russian technology and manufacturing imports, worth another €10 billion ($10.9 billion).
Europe has imposed punishing sanctions on Russia’s economy since Putin’s tanks rolled into Ukraine in late February, but stopped short of targeting Russia’s energy sector — until now. Images of unarmed civilians, bound and shot, lying along Bucha’s roads — which were until recently under Russian occupation — have convinced leaders to change tack.
More details on the new round of sanctions, including the timeline for the ban on coal, are expected Wednesday when EU ambassadors meet for talks. The measures still need the approval of all 27 member states.
Sanctioning coal will bite some European countries, but it’s among the easiest energy sources to wean off — much of the world is already doing just that. The trickier question is: What happens next?
How much Russian coal goes to Europe? Russia was the world’s third-largest exporter of coal in 2020, behind Australia and Indonesia, according to the International Energy Agency, with Europe by far its biggest customer.
The continent received 57 million tons of Russian hard coal that year, compared to 31 million tons for China, IEA data shows. This amounted to more than half of Europe’s coal that year, according to Eurostat.
But the EU was already turning away from the world’s dirtiest fossil fuel.
The amount of electricity generated by coal has decreased steadily across the block in recent years, falling 29% between 2017 and 2019, according to analysis by energy think tank Ember.
And despite a brief uptick last year as gas prices hit record highs, the IEA anticipates that European demand for coal will resume its steady decline. Total imports were expected to drop 6% by 2024 even before Russia’s invasion of Ukraine.
Other countries could step in to buy Russian coal. The IEA expects India’s coal imports to rise 4% in 2024, and more than 6% in Southeast Asia. Russia has already benefited from a jump in exports to China following Xi Jinping’s block on Australian imports, the agency said in a December report.
Quoted from Various Sources
Published for: The Bloggers Briefing