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Germany plans to stop consuming Russian oil, gas in two years

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(Bloombergs).

German Economy and Climate Minister Robert Habeck unveiled the plan on Friday, again making it clear that his country will not support an immediate embargo on Russian energy as the cost to businesses and households would be too high. . At the same time, Foreign Minister Olaf Scholz has promised himself independent of Russian energy “as soon as possible.”

Germany, with limited natural resources of its own, has come to depend on Russia for more than half of its gas needs, almost half of its coal and about a third of its oil, and the invasion of Ukraine has been a colossal reality check for the authorities in Berlin.

“In recent weeks, we have made intensive efforts together with all relevant players to import less fossil fuels from Russia and expand supply,” Habeck said. “The first important milestones have been reached in freeing ourselves from the dominance of Russian imports.”

Germany wants to halve Russian oil imports by the middle of the year and be “almost independent” for fines from 2022, Habeck said. It could get rid of coal imports completely by the fall, he added.

The government has acknowledged that it will be difficult to quickly remove Russian oil from supply chains, and is rushing to develop complex planes to schedule deliveries by sea, truck and rail.

Most of the challenge lies in eastern Germany, where refining industry logistics are poised to turn Russian crude into fuels for consumers.

Reducing Germany’s dependence on Russian gas also includes a major challenge, in part due to the lack of necessary infrastructure, such as liquefied natural gas terminals, Habeck said.

Habeck has recently held talks with Norwegian and Middle Eastern officials in a bid to diversify supplies, while the United States and the European Union announced on Friday that they will seek to increase LNG supplies to European countries by the end of 2022.

A Habeck-led ministry document titled “Energy Security Progress Report” published Friday says gas independence from Russia can be “largely achieved by the summer of 2024” with a “major joint effort” that Reduced to a 10% portion in the blend imported from Germany.

Analysts express skepticism about the viability of these planes.

“It sounds pretty unlikely and probably impossible,” said Niall Trimble, director of consultancy Energy Contract Co. “The main alternative is LNG, but this market is very tight with little surplus cargo available,” Trimble said. “For Germany there may also be problems with access to LNG import capacity.”

An expansion of renewable energy, a broad reduction in demand, diversification of suppliers and increased production of clean hydrogen are also essential elements for Germany’s energy turnaround, Habeck said.

“Even if we are less dependent on Russian imports, it is too early for an energy embargo,” he said. “The economic and social consequences would still be too serious. But every supply contract that is terminated hurts Putin.”

original note:

Germany will withdraw from Russian oil and gas in the next 2 years (1)

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