Germany to cut dependence on Russian oil, gas, coal
Germany plans to halve its imports of Russian oil by the middle of this year and aims for its refining sector to be “almost independent” of Moscow by the end of the year, the country’s minister for economic affairs and climate protection Robert Habeck said today.
Russian imports made up around 35pc of German oil consumption in 2021, according to an energy security report released by the German government today. Dependence on Russian oil could be reduced to around 25pc “in the coming weeks” if expiring contracts are not renewed, the report said, adding that alternative supplies can make up the shortfall.
Russian state-controlled oil giant Rosneft has a 12-month contract with TotalEnergies to deliver 47,000-83,000 b/d of Urals crude through the Druzhba pipeline to the 210,000 b/d Leuna refinery in Germany due to expire this month. TotalEnergies has already said that it will terminate all of its Russian term oil supply contracts as soon as possible “and by the end of 2022 at the latest”. Imports of Russian crude to Leuna will be halved by mid-April, the German government said today.
But the process to wean the country off Russian oil is demanding, the report said, particularly the need to find alternative supply of a similar quality, not just for Leuna but for the 226,000 b/d Schwedt refinery as well. Around a third of Germany’s imports of Russian oil go to Schwedt, the report said. Rosneft owns a 54.5pc stake in the refinery and plans to buy Shell’s 37.5pc share, although the proposed acquisition is subject to a government investigation. The government said it is “working hard to solve this complex problem”, in order to achieve full independence from Russian oil.
Germany could look to offset a reduction in pipeline oil supplies from Russia with seaborne crude deliveries from elsewhere via the German port of Rostock or the Polish port of Gdansk. The government is in talks with the Polish government, although the port of Gdansk said this week that supplying Polish refineries is its priority. Deliveries can also be made to German refineries by truck or train, the government said.
Scaling back Russian coal and gas
Germany also plans to sharply reduce its dependence on Russian coal and gas. More progress has been made on coal, Habeck said, adding that dependency on Russian coal will fall from 50pc to 25pc “in the next few weeks”. Germany will be “completely independent of Russian hard coal” by the autumn, he said.
Some German utilities have already begun to scale back reliance on Russian coal. Meanwhile, the German government said this week that it wants to suspend the planned shutdown of coal-fired power plants in order to reduce its reliance on Russian gas imports.
Germany has made progress in reducing its reliance on Russian gas, “but the process is demanding”, Habeck said. It is likely that Germany will be “largely independent of Russian gas by mid-2024”, but this will require a focus on consumption at all levels, as well as rapid expansion in renewable energy, he said.
Russian gas made up around 55pc of German demand last year, but this has since fallen to 40pc, the report said. Some EU countries have called on the bloc to sanction Russian energy imports in response to the Ukraine conflict, but Germany remains opposed to a ban.
Diversification will be key for Germany’s energy security, the report said. The country has increased its energy transition funding to €203bn ($224bn) over the next four years and is eyeing an “almost completely renewable” power supply by 2035.
Published: 26-03-2022