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EU Adopts Ban On Russian Coal Imports

The European Union is imposing a ban on imports of coal and other solid fossil fuels from Russia as of August 2022 as part of the fifth round of EU sanctions against Russia over its invasion of Ukraine.

The new sanctions package, formally approved by the EU on Friday, comes after reports and footage emerged that Russian troops had committed war crimes while retreating from Ukrainian cities and towns.

The EU’s fifth package of sanctions against Russia was proposed by the European Commission on Tuesday, and was approved by the Committee of the Permanent Representatives of the Governments of the Member States to the European Union (COPERER) on Thursday.

The EU formally adopted the package of sanctions on Friday, and that package includes “a prohibition to purchase, import or transfer coal and other solid fossil fuels into the EU if they originate in Russia or are exported from Russia, as from August 2022.”

The sanctions also include denying access to Russia-flagged vessels at EU ports, except for agricultural and food products, humanitarian aid, and energy. The EU is also banning any Russian and Belarusian road transport undertaking, preventing them from transporting goods by road within the EU, including in transit. Derogations are nonetheless granted for a number of products, such as pharmaceutical, medical, agricultural, and food products, including wheat, and for road transport for humanitarian purposes. Sanctions were also extended to include more oligarchs, family members of sanctioned individuals, and a full transaction ban on four Russian banks.

“After being de-SWIFTed these banks will now be subject to an asset freeze, thereby being completely cut off from EU markets,” the EU said.

Import bans were also extended to comprise vodka, liquor, and caviar, as well as cement, rubber products, and wood.

The coal ban is one of the most significant measures in this new package of sanctions. Europe now has little time to find alternative coal supply, which will redirect coal trade flows and raise further coal and other energy commodity prices globally, and electricity prices in Europe in particular.


By Tsvetana Paraskova for Oilprice.com

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  • Mamdouh Salameh on April 08 2022 said:
    In banning the imports of Russian coal from August, the EU is ‘cutting its nose to spite its face’ according to the proverbial saying.

    The minute the EU adopted the ban, Indonesia hiked its own coal prices by 42%, Australian coal miners reported they have limited ability to replace Russian coal and Asian coal prices soared amid reports that European buyers were hunting for replacement coal. As a result, the EU will be paying higher prices to replace Russian coal imports and that adds a big financial burden on its budget.

    If the EU decides to follow the ban it introduced against Russian coal exports by another ban on Russian oil and gas supplies, what’s happening to coal prices is pretty much what will be happening to oil and gas. Both the global oil and natural gas markets are already tight and there is no ready replacement for Russian gas and oil should they stop flowing. That’s despite efforts on the part of U.S. LNG producers to boost exports.

    The United States did not even have the physical means to supply an additional 15 billion cubic metres (bcm) of LNG a year which President Biden promised the EU. This is due to the time it takes to boost gas production and expand LNG liquefaction capacity, the limited LNG tanker fleet, existing long-term LNG export commitments to customers in the Asia-Pacific region and also lack of enough LNG terminals and storage space in the EU to receive even modest volumes of LNG.

    And if the intention is to hurt the Russian economy, the EU will be inflicting much bigger damage on its own economy plunging it into the worst energy crisis in its history with its economic growth reduced to almost zero. The cost of living is already rising across the EU and governments are struggling to rein it in.

    Moreover, no one single oil or gas producer in the world or a group of producers can replace Russian crude oil and gas supplies now or ever.

    In this environment of tight fossil fuel supply and demand that seems to significantly exceed this supply, things are already critical without any oil or gas embargoes. If the EU goes down the embargo road the results could be disastrous.

    Dr Mamdouh G Salameh
    International Oil Economist
    Visiting Professor of Energy Economics at ESCP Europe Business School, London

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