Germany Moves To Wean Itself Off Russian Energy

Germany said Friday it was drastically slashing its energy purchases from Russia amid Moscow's invasion of Ukraine, with oil imports to be halved by June and coal deliveries to end by the autumn.

"In recent weeks, together with all relevant players, we have made intensive efforts to import less fossil energy from Russia and broaden out our supply base," said Economy Minister Robert Habeck.

"The first important milestones have been reached to free us from the grip of Russian imports," he added.

Before Moscow began its war in Ukraine, a third of Germany's oil imports, 45 percent of its coal purchases and 55 percent of gas imports came from Russia.

The reliance of Europe's biggest economy on Russian energy has been exposed as an Achilles' heel as Western allies scramble to penalise Vladimir Putin for his attack on Ukraine.

With calls for an energy embargo growing louder, companies with Russian suppliers are letting their contracts run out and turning to other suppliers "at a crazy speed", said Habeck.

Germany has been reluctant to back an embargo so far, but the United States and European Union announced Friday a task force aimed at cutting the bloc's reliance on Russian fossil fuels.

As a result of the contract switches, oil deliveries from Russia can already be seen dropping by 25 percent, halving by the middle of the year and drying up completely by the end of the year.

Likewise, German power companies were ditching Russian coal.

"By the autumn, we can be independent from Russian coal," said the economy ministry.

On gas imports, however, Habeck acknowledged that it was more complicated, and Germany is expected to be able to largely wean itself off Russian deliveries only in mid-2024.

Germany already said in March that it was ploughing 1.5 billion euros ($1.7 billion) into buying liquefied natural gas (LNG) from suppliers like Qatar or the United States.

However, the receiving terminals for the gas are not in place.

As a result, it is dependent on neighbouring countries' terminals.

Plans to build terrestrial LNG terminals are being accelerated, although they are unlikely to be up and running before 2026.

For now, three floating LNG terminals -- essentially huge ships moored by a port to receive gas stocks -- are due to be reserved by energy giants Uniper and RWE, said the ministry.

Germany's coalition of Social Democrats, Greens and the liberal FDP had eyed an energy transition to renewables that would make Europe's biggest economy climate-neutral by 2045.

It had therefore planned to wind down its coal usage, with an end seen by 2030, while natural gas use was due to rise in the meantime until the switch to renewables was complete.

But the war in Ukraine has reshuffled the country's calculations while also exposing the economic powerhouse's devastating reliance on Russian energy.

Habeck, himself of the Green party, has therefore found himself looking around the world to purchase coal.

And Berlin on Thursday it is now looking at keeping its coal plants open longer "as a security standby".

Under Friday's US-EU task force announcement, the United States pledged to help the bloc cut its reliance on Russian energy by supplying an extra 15 billion cubic metres of LNG this year.

But with Russia pressing on with its war despite unprecedented sanctions imposed by Western allies, pressure is rising for the EU to sever Moscow's economic lifeline by banning energy imports.

Faced with opposition from Germany, the EU has so far avoided following in the footsteps of the United States with a ban on Russian energy imports.

Putin on Wednesday upped the ante by demanding payments for gas in rubles, something that Germany has said is a breach of contracts.

On Friday, Habeck said it was "too early" for a full energy embargo.

"But every contract that is halted hurts Putin," the minister said.