FRANKFURT, March 30 (Reuters) – Germany has activated the primary stage of an emergency plan to handle fuel provides in Europe’s largest financial system in preparation for a attainable disruption or halt in pure fuel provides from Russia. learn extra
Russia accounted for 55% of Germany’s fuel imports in 2021 and 40% within the first quarter of 2022.
Financial system Minister Robert Habeck has mentioned Germany won’t obtain full independence from Russian provides earlier than mid-2024.
WHAT’S THE PROBLEM?
Moscow mentioned final week it could draw up a mechanism by March 31 below which so-called “unfriendly” international locations – these behind sanctions imposed over Russia’s invasion of Ukraine – would pay for fuel in roubles. That features Germany, Europe’s industrial powerhouse, and different European allies.
Most now pay in euros or {dollars}.
Habeck, who’s the minister answerable for Germany’s power safety, has rejected Russia’s demand, saying contracts could be honoured below present phrases.
Russia’s largest German prospects are Uniper (UN01.DE), RWE (RWEG.DE) and EnBW’s (EBKG.DE) VNG (VNG.UL), which all have long-term fuel provide contracts. They haven’t commented on particular person preparations for any disruption.
WHAT IS GERMANY’S GAS PLAN?
Berlin’s “Emergency Plan Gasoline” has three disaster ranges.
The primary stage, which the federal government has triggered, is the early warning, when there are indicators a provide emergency may develop. The second is alarm, when a disruption to provide or terribly excessive demand upsets the same old steadiness however can nonetheless be corrected with out intervention.
The third stage is emergency, when market-based measures have didn’t treatment shortages. At this stage, Germany’s community regulator, the Bundesnetzagentur, should resolve the way to distribute any remaining fuel provides throughout the nation.
WHO IS AFFECTED FIRST?
If Germany doesn’t safe sufficient fuel, business, which accounts for 1 / 4 of German fuel demand, might be hit first.
“Because of this industrial manufacturing will get misplaced, that provide chains get misplaced,” Leonhard Birnbaum, chief government of German power group E.ON (EONGn.DE), advised public broadcaster ARD. “We’re definitely speaking about very heavy damages.”
Non-public households can have precedence over business, whereas hospitals, care amenities and different public sector establishments with particular wants could be final to be affected by a disruption.
Electrical energy utilities that accounted for 13% of fuel consumption final 12 months may in idea change to coal burning vegetation inside their portfolios. Nonetheless, an ongoing coal exit programme might need to be modified below the emergency legal guidelines to make sure sufficient capability is prepared.
Other than power suppliers, the industries most apprehensive about dropping fuel, embody chemical compounds, the place fuel is used for making the whole lot from plastics and fertiliser to fibres and solvents. In flip, carmakers rely upon chemical merchandise for merchandise reminiscent of batteries and laquer.
Union IG BCE has mentioned BASF’s (BASFn.DE) Ludwigshafen website may come below evaluate for lowering operations ought to fuel provides greater than halve.
Refineries want fuel to run crackers to make merchandise together with naphtha, gasoline, jet gas, diesel and heating oil.
(This story corrects ultimate paragraph to take away reference to grease merchandise)
Reporting by Vera Eckert, Christoph Steitz and Tom Kaeckenhoff; Modifying by Nina Chestney, Edmund Blair and Barbara Lewis
: .
