Launder (CNN Business) – Europe plans to deal another blow to the Russian economy with a new round of sanctions including a ban on coal imports. Europe is also working on new sanctions on Russian oil.
These measures are announced by European Commission President Ursula von der Leyen, and are subject to approval by the 27 member states of the European Union.
The bloc has so far imposed four rounds of sanctions aimed at punishing Russian President Vladimir Putin and his government for ordering an invasion of Ukraine. The fifth round of sanctions comes after the recent atrocities committed in Ukraine became known.
“We have all seen the horrific images of Bucha and other areas recently left behind by Russian forces,” von der Leyen said in a statement. These atrocities cannot and will not be left unanswered.”
“We will impose a ban on the import of Russian coal worth 4 billion euros (4.4 billion dollars) annually,” he said.
If passed, the coal import ban would be the first coordinated EU ban on the massive energy exports that drive the Russian economy and generate hundreds of billions of dollars in revenue each year.
European Union leaders have so far been unable to agree on the Russian energy sector, due to the risks it poses to the region’s economy at a time of rising natural gas and fuel prices. But the mood seems to have changed this week. French President Emmanuel Macron said on Monday he would support a complete ban on Russian oil and coal imports, and Germany on Tuesday indicated it might support a coal ban.
“Russia is waging a cruel and merciless war in Ukraine, not only against its brave forces but also against its civilian population,” von der Leyen told reporters. “It is important to keep pressure on Putin and the Russian government at this time.”
Russia was the world’s third largest coal exporter in 2020, after Australia and Indonesia, according to the International Energy Agency. It is also the main exporter of thermal coal to the European Union, before China and South Korea.
European coal prices are already starting to rise in anticipation of possible sanctions. Rotterdam coal futures, the regional benchmark, have more than doubled since the start of the year and are trading at around $295 per metric ton.
“Coal sanctions will make life more difficult for European utilities, which consume a lot of Russian coal, but energy companies can deal with this, and politicians see more public acceptance of this, as it goes well with the general and accelerating green transition of the union European, Henning Gloesten, director of energy, climate and resources at Eurasia Group, told CNN Business.
The fifth round of sanctions also includes a complete ban on transactions with Russia’s second largest bank, VTB, and three other lenders. Ships registered or operated by Russia will be banned from EU ports, except for ships carrying energy, food and other types of humanitarian aid.
Exports of technology and other sensitive equipment worth 10 billion euros ($11 billion), such as quantum computers and advanced semiconductors, will be banned. EU countries will also ban imports of products such as wood, cement, seafood and spirits worth $6 billion.
Added von der Leyen.
Russian oil has already been banned by the US and UK, and a broader de facto ban has been imposed, as banks, merchants, shipping companies and insurance companies try to avoid falling under financial sanctions. According to the International Energy Agency, Russia may have to limit production by 3 million barrels per day from this month as it struggles to find buyers.
Anna Cuban contributed to this report.