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EU proposes sanctions on Russian coal

BRUSSELS (AP) — The European Union’s (EU) executive branch proposed yesterday a ban on coal imports from Russia in what would be the first EU sanctions targetting the country’s lucrative energy industry over its war in Ukraine.

European Commission President Ursula von der Leyen said the EU needed to increase the pressure on Russian President Vladimir Putin after what she described as “heinous crimes” carried out around Kyiv, with evidence that Russian troops may have deliberately killed Ukrainian civilians.

Von der Leyen said the ban on coal imports is worth EUR4 billion (USD4.4 billion) per year and that the EU has already started working on additional sanctions, including on oil imports.

She didn’t mention natural gas, with consensus among the 27 EU member countries on targetting the fuel used to generate electricity and heat homes more difficult to secure.

The EU gets about 40 per cent of its natural gas from Russia and many EU countries, including Germany – the bloc’s largest economy – are opposed to cutting off gas imports.

Until now, Europe had not been willing to target Russian energy over fears that it would plunge the European economy into recession. Europe’s dependence on Russian oil, natural gas and coal means finding unanimity on energy measures is a tall order, but the recent reports of civilian killings have increased pressure for tougher EU sanctions.

Dump trucks at the Kedrovsky open-pit coal mine in Kemerovo, Russia. PHOTO: AP

The US and United Kingdom previously announced they were cutting off Russian oil. Individual countries have announced efforts to draw down their energy reliance on Russia, Poland said it plans to block imports of coal and oil from Russia, while Lithuania said it’s no longer using Russian natural gas.

“To take a clear stand is not only crucial for us in Europe but also for the rest of the world,” von der Leyen said. “A clear stand against Putin’s war of choice. A clear stand against the massacre of civilians. And a clear stand against the violation of the fundamental principles of the world order.”

Other measures proposed by the EU’s executive arm include sanctions on more individuals and four key Russian banks, among them VTB, the second-largest Russian bank.

“These four banks, which we now totally cut off from the markets, represent 23 per cent of market share in the Russian banking sector,” von der Leyen said. “This will further weaken Russia´s financial system.”

If the proposal is adopted unanimously by all 27 EU countries, the new package of sanctions would also ban Russian vessels and Russian-operated vessels from EU ports, with exceptions for essentials such as agricultural and food products, humanitarian aid and energy.

Further targetted export bans, worth EUR10 billion, in sectors covering quantum computers, advanced semiconductors, sensitive machinery and transportation equipment have also been proposed.

“With this, we will continue to degrade Russia’s technological base and industrial capacity,” von der Leyen said.

According to EU trade commissioner Valdis Dombrovskis, 62 per cent of Russia’s exports to the EU were hydrocarbons last year.

“If we really want to affect Russia’s economy, that’s where we need to look,” he said. “And that’s exactly what is subject to discussions concerning this sanctions package.”

Because of its climate ambitions, the EU has been moving away from coal for years. Coal use fell from 1.2 billion tonnes a year to 427 million tonnes between 1990 and 2020, but imports rose from 30 per cent to 60 per cent of coal use.