Headquarters reporter observation丨The EU's coal embargo on Russia comes into effect may exacerbate the energy crisis
On the 11th local time, the EU's embargo on Russian coal came into effect.
Against the background of high inflation and sluggish economic growth, what impact will the embargo on Russian coal have on the EU economy and people's livelihood?
How will the EU face the increasingly severe energy crisis?
Headquarters reporter Zheng Zhi: In April this year, the EU decided to impose a coal embargo on Russia. The EU initially proposed a 90-day transition period for member states, but it was extended to 120 days at the request of Germany and other countries.
The coal embargo on Russia is one of the fifth round of EU sanctions against Russia, and it is also the first time the EU has imposed sanctions on Russian energy since the Ukraine crisis.
Data shows that 45% of the EU's annual coal imports came from Russia, with a total value of about 4 billion euros. Germany, Poland and the Netherlands are the largest buyers within the EU.
Compared with oil and natural gas, the amount of Russian coal imported by the EU is much lower, and it is easier for the EU to sanction Russian-produced coal, which is the key reason why the EU was able to quickly reach a consensus on the sanctions at that time.
However, the relative ease of sanctions against Russian coal does not mean that the move will have little impact on the EU economy and people's livelihood.
EU think tanks such as the Bruegel Institute pointed out that about 70% of the thermal coal used in the EU for power generation and heating is imported from Russia.
European coal prices have hit record highs as supply and demand tighten.
European thermal coal prices rose to around $400 a tonne in mid-July, well above $130 a year ago, according to a price assessment by UK-based energy consultancy Argus.
This means that EU citizens will face higher electricity and heating costs.
The European Union is stepping up efforts to purchase coal from Cambodia, Australia and other countries in hopes of filling the market gap, data from a British shipbroker showed.
However, it is worth noting that while embargoing Russian coal, the EU has also decided to gradually reduce imports of oil and natural gas from Russia.
Analysts believe that since the EU is difficult to obtain sufficient oil and natural gas supply from other global markets for a long time, the EU countries are likely to use coal more as an alternative energy source for power generation and industry, and rely on coal. And demand is bound to increase substantially.
Germany, as the "hardest hit area" of the European energy crisis, has announced the resumption of coal power generation.
However, due to the high temperature, the logistics chain of coal originally transported through the Rhine is now hindered.
Due to the drop in water levels caused by the continuous high temperature, some key sections of the Rhine are expected to be unnavigable from August 12.
Against this background, the extent to which the coal market outside Russia can meet the EU's market demand and how the cost of coal consumption will change is currently full of uncertainty.
Headquarters reporter Zheng Zhi: Obviously, for EU countries that have long been highly dependent on Russia's energy supply, the backlash caused by sanctions against Russia is becoming increasingly prominent.
The EU's embargo on Russian coal seems easy, but it drives up costs, disrupts supply chains, and may trigger a knock-on effect, further aggravating the EU's own energy and economic crisis.