EU is not expected to ban Russian coal imports entirely until August, sources say

April 11, 2022: On Thursday, the European Union’s proposed ban on coal imports from Russia is not expected to take full effect until August, a month later than expected.

Earlier this week, the European Commission, the executive arm of the EU, proposed the ban in the wake of mounting evidence of atrocities by Russian troops against Ukrainians in Bucha and other areas.

The actual plan was to phase out coal imports within three months, an EU official, who did not want to be named because of the sensitivity of the talks, told CNBC. Although, the same official added that this period had now been extended to four months which brings the full implementation of the ban to August.

“There seems to have been an effective German lobby to extend the phase-out period for existing coal contracts to four months,” a second EU official confirmed to CNBC Thursday.

Germany is the most skeptical nation about blocking energy supplies from Russia, but it’s not the only one. Austria and Hungary, for instance, are questioning it too.

These nations have the highest energy dependencies on Russia and argue that banning energy supplies from the country could have a more significant impact on their economies than on Russia’s.

Germany, for instance, bought 21.5% of its coal from Russia in 2020. According to the European statistics office data, that number rose to 35.2% for oil imports and 58.9% for natural gas.

Approving energy sanctions has been a significant challenge for the EU, given its high dependency on Russian supplies.

The region is heavily reliant on Russia’s oil and natural gas. However, it is less dependent on coal imports — a key reason why this is the first energy sanction the European Commission has proposed.

According to official European statistics, more than 19% of the EU’s coal imports came from Russia in 2020. In contrast, 36.5% of its oil imports were from Russia, 41.1% of its gas imports.

However, momentum for a ban on Russian oil is building too.

Earlier this week, European Commission President Ursula von der Leyen said her team was working on oil sanctions.