German regional govt attempt to circumvent Nord Stream 2 sanctions futile – analyst
Tagesspiegel Background / Clean Energy Wire
The plan to circumvent US sanctions on companies involved in completing the Russian-German natural gas pipeline Nord Stream 2 by creating a “climate” foundation are unlikely to work, Thomas O'Donnell, analyst of the global energy system at the Hertie School of Governance, told Tagesspiegel Background. The government of northern German state Mecklenburg-Western Pomerania plans to set up a state-owned foundation that will buy up and store crucial building materials from companies. The aim is to beat a deadline by which companies must cease work related to Nord Stream 2 as laid down in US sanctions decisions, said O’Donnell. However, the sanctions law makes clear that attempts to circumvent it will also be sanctioned. “No company – unless it is completely naïve, is badly advised, or wants to see its economic existence endangered – will sell equipment to this foundation for the completion of Nord Stream 2,” explained O’Donnell. He added that it is unlikely the pipeline will be completed in the coming months and years and that the federal state’s attempt is largely politics: “The SPD-led [Social Democrats] state government is thus showing Russia and the voters and the domestic economy that it is not backing down.”
Still, Mecklenburg-Western Pomerania is set to go ahead with its plans after the regional parliament gave the green light on 7 January. The pipeline has been contested since the early planning stages. The project would allow additional Russian gas to flow directly to Germany. Proponents argue the pipeline is a commercial investment that is key to Europe's supply security, while opponents criticise Nord Stream 2 on environmental, geopolitical and security grounds. Around 160 km of Nord Stream 2’s pipeline, most of which will be in Danish waters, still needs to be completed. Construction was halted in December 2019 after the US enacted a sanctions bill affecting companies working on the pipeline, but is reportedly set to resume mid-January 2021.