Sanctions against Russia: What a ban on Russian coal imports means

Sanctions against Russia: What a ban on Russian coal imports means

Germany is also largely dependent on Russia for coal. The imports can and should be replaced quickly. But a lot depends on when the import ban on Russian coal will come into effect.

The 27 EU countries have launched the fifth major package of sanctions against Russia.

The EU Commission’s proposals, approved by the permanent representatives of the member states on Thursday evening, also contain an import ban on coal – the first time an energy embargo has been imposed.

How important has Russian coal been so far?

According to the Association of Coal Importers, almost half of the 31.82 million tons that Germany imported in 2020 came from Russia. The countries of origin USA and Australia followed at a great distance. The figures include both hard coal and the coal product coke, which is used in steel production, for example. According to the Economics Ministry, before the Ukraine war, Russian coal accounted for around 50 percent of German hard coal consumption.

Can this proportion be reduced as a reaction to the war?

The share of Russian hard coal is already being reduced. As the Ministry of Economics recently announced in a “Progress report on energy security”, the majority of power plant operators will completely do without Russian hard coal by early summer or greatly reduce their use.

The large industrial users of coal, especially the steel industry, are already changing their supply contracts. As a result of the contract changes, dependency on coal will drop from 50 percent to around 25 percent in the next few weeks – this will take effect step by step from April: “Germany can be independent of Russian coal by autumn.”

What consequences could an import ban have?

It mainly depends on the timing. The EU package that has now been decided provides for a transitional period for the import ban – at the request of countries like Germany of four months. The Commission had proposed three months. A report by the Ministry of Economics to the Economics Committee of the Bundestag said that the supply chains had not yet been converted, so that there could be a shortage of coal after a few weeks if deliveries were stopped immediately. This in turn could have an impact on the electricity sector.

If the Russian import volumes were to fail in the short term, reserves at the power plant sites and intermediately stored hard coal in ports would be used to generate electricity: “These reserves will last for around four to six weeks, depending on how the power plant is operating.” Once the reserves have been used up, individual power plants would probably have to be shut down.

What alternatives are there?

When it comes to coal, Germany can reduce its dependency on Russia the fastest compared to oil and, above all, gas. Hard coal imports from Russia could be completely replaced by other countries in a few months – especially from the USA, Colombia and South Africa, the Association of Coal Importers announced at the beginning of March. There is a well-functioning, liquid world market and sufficient quantities are available. Germany is also not dependent on the special qualitative properties of Russian coal, since different qualities of hard coal can easily be mixed in order to meet technical parameters.

What role do the German lignite mining areas play?

The only fossil fuel in Germany that does not have to be imported is lignite. Of the 107.4 million tons of lignite mined in Germany in 2020, according to the Federal Association of Lignite, almost half came from the Rhineland, around 40 percent from Lusatia and almost 12 percent from central Germany. According to AG Energiebalancen, lignite accounted for 9.3 percent of total primary energy consumption in 2021. The share of hard coal was 8.6 percent – natural gas had a share of 26.7 percent.

What does Germany have in terms of domestic energy sources overall?

Not as much. According to the World Energy Council, an international association of industry associations and companies, Germany was able to cover less than a third (29 percent) of its energy requirements from domestic sources in 2020. Renewable energies, for example from wind and sun, as well as lignite, are therefore the only domestic energy sources worth mentioning. The Federal Republic covers its entire consumption here itself. The remaining 71 percent was imported: 100 percent hard coal, oil and natural gas more than 95 percent each.

What is coal used for in Germany?

Almost half of the hard coal consumed in Germany was used for steel production last year. The other half was used in power plants to produce either electricity or heat. A very small proportion went to heat generation in industrial plants. Most of the lignite mined in Germany is used to generate electricity.

By when does Germany want to get out of coal?

2038 is the legally stipulated end date. However, the traffic light government wants to do it by 2030 – “ideally”. According to the Ministry of Economic Affairs, this targeted date is not in question either. However, the exit depends on whether the targeted expansion of green electricity from wind and sun is successful. Against the background of the Ukraine war, more power plants that are going offline are to be placed in reserve – the importance of coal could increase again.

What does this mean for climate protection?

In the short term, it is to be expected that Germany will emit more greenhouse gases as a result, said Climate State Secretary Patrick Graichen recently. “In the electricity market, I expect emissions to tend to increase again in 2022, but that doesn’t mean that this also applies to the overall greenhouse gas balance,” said Graichen. He assured that the government wanted to push climate protection all the more decisively.

Greenpeace also assumes that in the coming winter of 2022/23 in Germany, coal-fired power plants will replace electricity production with gas-fired power plants, if only for economic reasons. The reason is the expected high gas prices, said the climate and energy expert of the environmental protection organization, Karsten Smid. Inevitably, CO2 emissions would also increase as a result.

Source: Stern

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