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Vista Projects
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Vista Projects

Germany to Wean Itself Off Russian Oil and Gas in Next Two Years

These translations are done via Google Translate
(Bloomberg) Germany plans to quickly wean itself off Russian fossil fuels, aiming to broadly end purchases of the nation’s oil and coal this year and almost completely halt imports of Russian gas by the middle of 2024.

Economy Minister Robert Habeck made the announcement in Berlin Friday while reiterating Germany’s stance that an immediate embargo on Russian energy is not possible because of the damage it would cause to Europe’s biggest economy. Even his own plan poses an immense challenge for a country that’s become heavily dependent on Russia for energy supplies.

“In recent weeks, we have made intensive efforts together with all relevant players to import fewer fossil fuels from Russia and to put supply on a broader footing,” Habeck said. “The first important milestones have been reached in order to free ourselves from the grip of Russian imports.”

Share of Natural Gas Imports Coming From Russia, 2020

The invasion of Ukraine has shocked Germany and its European Union allies into a radical shift in energy policy, and the bloc is rushing to cut its dependence on Russia.

As part of the radical shift, the EU and U.S. on Friday unveiled a political pact aimed at paving the way for additional imports of U.S. liquefied natural gas. The deal provides a platform for the commercial agreements that will need to follow for shipments to begin.

Habeck, a member of the Greens party who is also the vice chancellor, has also held talks recently with officials in Norway and Qatar in a bid to diversify its energy supplies.

Germany, which has limited natural resources of its own, allowed itself to become reliant on Russia for around half of its gas and coal and about a third of its oil.

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Habeck said Germany wants to halve imports of Russian oil by mid-year and be “almost independent” by the end of 2022. It could be completely free of coal imports by the fall, he said.

“Companies are letting contracts with Russian suppliers expire, they’re not extending them and are switching to other suppliers,” he added. “And at an insane pace.”

The government acknowledged it would be difficult to remove Russian oil quickly from supply chains, and is rushing to make complex plans to line up deliveries by sea, truck and train.

Cutting Germany’s reliance on Russian gas is also a challenge, partly due to a lack of the necessary infrastructure like LNG terminals, Habeck said. An expansion of renewables, a broad reduction in demand, diversification of suppliers and ramping up production of clean hydrogen are also essential elements, he added.

“Even if we become less dependent on Russian imports, it is too early for an energy embargo at this point in time,” Habeck said. “The economic and social consequences would still be too serious. But every supply contract that is terminated harms Putin.”

The Economy Ministry published a paper Friday entitled “Progress Report Energy Security” which set out some of the measures the government is taking. These include:

  • Options on three floating LNG terminals through energy companies RWE AG and Uniper SE
  • The companies are negotiating contracts to rent the floating storage and regasification units
  • The government is looking at potential locations on the North Sea and Baltic Sea
  • The facilities can be used at short notice — in some cases as early as next winter
  • Ramping up imports via truck, rail; talks ongoing with Poland on importing oil through Danzig
  • Legislation to be approved Friday that ensures gas storage facilities are sufficiently filled

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