EU to ban Russian coal imports from August, sources say
Front loaders collect a shovel of coal at Raspadsky, an open-pit coal mine operated by RaspadskayaPJSC in Mezhdurechensk. This was Friday, February 5, 2021.
Andrey Rudakov | Bloomberg | Getty Images
The European Union’s proposed ban on coal imports from Russia is not expected to take full effect until August — a month later than expected, two sources told CNBC Thursday.
This week the European Commission, which is the executive arm the EU, suggested the ban. mounting evidence of atrocities by Russian troops against Ukrainians in BuchaOther areas
CNBC was told by an EU official that originally the plan was for coal imports to stop within three months. The EU official did not want his name to protect the confidentiality of the discussions. However, the same official added that this period had now been extended to four months — bringing the full implementation of the ban to August.
CNBC received confirmation from a second EU official Thursday that “there seems to be an effective German lobby in order to prolong the phase-out period for existing coal contract to four months.”
Germany is the nation most concerned about Russia blocking its energy supplies, however it isn’t the only one. Austria and Hungary are also questioning the idea.
These countries are the most dependent on Russia for energy and believe that banning Russian energy supply could have more impact on their economies than Russia’s.
For example, Germany bought 21.5% from Russia for its coal in 2020. This number rose from 21.5% to 35.2% to import oil and from 58.9% to natural gas according to European statistics data.
Given its dependence on Russian energy supplies, approval of energy sanctions was a significant challenge for the EU.
The region is heavily reliant on Russia’s oil and natural gas, although it is less dependent on coal imports — a key reason why this is the first energy sanction the European Commission has proposed.
Official European statistics show that 19% of EU coal imports in 2020 came from Russia. However, 36% of the EU’s oil imports came from Russia and 41.1% were imported from Russia.
There is however growing support for an international ban on Russian crude oil.
Ursula von der Leyen, President of the European Commission, stated earlier this week that her team is working to implement oil sanctions.
She said, “We are currently working on additional sanctions including oil imports and we are reflecting upon some of the ideas submitted by member states such as taxes, or specific payment channels like an escrow accounts.”
The EU’s foreign ministers will discuss an oil ban Monday, but it is unlikely that they move forward with the measure. There needs to be agreement among 27 members states before further sanctions can be imposed.
Brent crude oil traded 1.3% higher at $102.44 per barrel on Thursday. Since Russia’s invasion of Ukraine unprovoked on February 24, prices have been rising.