European Union countries agreed on Thursday to ban imports of Russian coal, the first sanctions on Russia’s vital energy industry due to the war in Ukraine.
The move, however, highlights the inability of the 27 nations to reach an agreement so far on a much broader embargo that includes oil and natural gas, which would be a bigger blow to Moscow, but carries the risk of causing a recession in their countries.
The coal ban will cost Russia 4 billion euros ($4.4 billion) a year, the European Commission said. Energy analysts and coal importers say Europe could in a matter of months replace the supply it receives from Russia with supplies from other countries, including the United States.
This is a significant move because it breaks the taboo on cutting energy links between Europe and Russia. It will also certainly fuel inflation that is already at record levels. But compared to oil and natural gas, coal is by far the most expendable in the short term and inflicts far less damage on Russian President Vladimir Putin’s war chest and the European economy. The EU pays Russia $20 million a day for coal, but $850 million a day for oil and natural gas.
Alarming images of dead bodies littering the streets of the Ukrainian town of Bucha are keeping discussions of broader sanctions alive, with EU officials saying they are working on measures affecting the Russian oil industry.
As the bloc weighs additional sanctions, Italian Prime Minister Mario Draghi said an embargo on Russian natural gas is not currently being considered.
“And I don’t know if it will ever be up for discussion,” he told reporters Wednesday.
EU countries, particularly big economies like Italy and Germany, rely heavily on Russian natural gas to heat and cool homes, generate electricity and keep industry running.