{"id":29728,"title":"Russian Sanctions Highlight Need for Green Transition for European Energy Independence","link":"https:\/\/bst-europe.eu\/de\/investment-budget\/russian-sanctions-highlight-need-for-green-transition-for-european-energy-independence\/","date":"14. M\u00e4rz 2022","date_unix":1647261657,"date_modified_unix":1754484387,"date_iso":"2022-03-14T12:40:57+00:00","content":"

The war in Ukraine has shifted the focus of European governments and created a new urgency for European Union energy policy. While EU leaders are focusing on meeting immediate fuel needs to replace uncertain Russian imports, any EU response to its fossil energy dependency must also involve investment in green energy and energy efficiency to improve energy independence long term.<\/p>\n

Russian oil and gas will be replaced sooner or later<\/strong><\/h2>\n

Sanctions on Russian energy firms have stopped huge volumes of fossil fuel trade, with up to 70% of Russian oil without buyers<\/a> due to sanctions, refusal to deal with Russian energy companies<\/a> and increased risk to Black Sea shipping. But many EU countries are still buying up Russian fossil fuels. Natural gas flows from Russia to Europe have actually increased<\/a> since the war began.<\/p>\n

And while the US announced a stop to Russian fuel imports\u2014a largely symbolic move by the world\u2019s top oil and natural gas producer\u2014the EU did not have a majority agree to join as of last week\u2019s Versailles Summit. Boycotting Russian fossil fuels will not be easy since the EU relies on Russia for 40% of its total natural gas, 27% of its oil imports, and 46% of its coal imports<\/a>.<\/p>\n

\"map:<\/a><\/p>\n

Still, refusing Russian oil and gas remains one of the more powerful options for EU leaders to make the war in Ukraine more costly for Vladimir Putin and potentially bring him to the negotiating table, but EU leaders have only proposed a gradual phasing out so far, reducing at first two-thirds of Russian fuel imports by the end of 2022<\/a>.<\/p>\n

Assuming that the EU\u2019s strategy on gradually phasing out will not see a reversal as the war escalates further, Russian energy imports to Europe could still be halted in the short-term by other factors. First, Russia could shut the taps voluntarily if the EU moves forward on energy import reductions, or second, gas flows through major pipelines, like the ones traversing Ukraine to Europe, could be disrupted by the damage caused by the Russian invasion.<\/p>\n

Irrespective of the short-term situation, Russia has proven\u00a0that it will use energy supply as a lever to pressure the EU and has no qualms jeopardizing huge gas and oil trade with EU partners over its own geopolitical goals. This and Russia\u2019s unprovoked invasion of Ukraine has pushed the remaining EU members still heavily depending on Russian fuels to finally accept that this makes them vulnerable, and there is mounting political will to hasten energy independence and the green transition.<\/p>\n

While there was no majority in favor of an immediate stop of Russian gas imports in last week\u2019s Versailles Summit (the move is opposed by Germany, Hungary, Bulgaria, and Finland<\/a>, with Italy, Portugal, Czechia, Greece, Slovenia, and Romania undecided), the Commission is set to announce plans to end dependence on Russian gas by 2027 instead of 2030 and have 100% renewable electricity by 2035<\/a>. Russian gas and oil will be replaced at some point. The question now is how soon and how to prepare.<\/p>\n

EU replacing Russian oil possible but painful\u2026<\/strong><\/h2>\n

To replace the 27% of imported oil the EU gets from Russia, EU members will need to reduce fuel use and find other sellers. Russia exports around 2.5 million<\/a> barrels of oil a day to the EU, and emergency measures, like the US and its allies did in releasing 60 million barrels<\/a> from their oil reserves to stabilize rising prices, are just temporary solutions to a major shift in oil trade.<\/p>\n

OPEC countries (Organization of the Petroleum Exporting Countries, whose + version includes Russia), if they wish, could start to replace Russia oil in Europe, since top producers like Saudi Arabia could increase output by 1-2 million barrels a day<\/a>.<\/p>\n

With uncertainty in fuel markets since Russia\u2019s invasion, crude oil prices climbed to their highest in over 14 years<\/a>. However, in the first week of March, OPEC+ countries declined to increase production, preferring instead to stick to a plan adopted last year to increase production by 400,000 barrels per day<\/a>.<\/p>\n

Even if OPEC+ countries agree to increase production, replacing Russian oil that currently flows through pipelines, like the Druzhba pipeline bringing oil to Germany, Poland, Slovakia, the Czech Republic, and Hungary, among other destinations, will require shipping oil by sea, which will be more expensive and will take longer.<\/p>\n

\n
\n
\n

The lag between surging oil prices and the rig count (a proxy for oil investment) in US oil industry suggest a wave of investment to come. https:\/\/t.co\/3HS5rCQTyh<\/a> pic.twitter.com\/n3103pn2Rd<\/a><\/p>\n

— Adam Tooze (@adam_tooze) March 4, 2022<\/a><\/p><\/blockquote>\n