Embargo on Russian coal “unpleasant but tolerable” for German economy – researcher
Clean Energy Wire / Bloomberg
The embargo on Russian coal agreed by the EU will be “temporarily unpleasant but tolerable” for the German economy, Karen Pittel from the Institute for Economic Research (ifo) has said. In contrast to natural gas, existing hard coal stocks and the options for substituting imports from Russia suggested that German can cope with a sudden halt of coal trading with the country. Lignite could replace hard coal for power generation, which would free up energy for use in industry facilities. “The price increase for coal resulting from the embargo should be rather short-lived,” Pittel said. Russia would likely seek other buyers for its coal, which would lower the market price in the longer-run – and also water down the sanction’s effects on Russia. In 2021, Russia delivered 57 percent of Germany’s hard coal imports, but alternative sources would become available in the next months, she said.
The European Union this week launched the 5th package of sanctions on Russia, which included a ban of coal imports, reported Bloomberg. European Commission President Ursula von der Leyen said the action on coal would amount to 4 billion euros a year. Companies would be allowed four months to wind down contracts before they’d be banned from entering new ones.