Europe agrees to ban Russian coal, but struggles on oil, gas

The European Union nations have agreed to ban Russian coal in the first sanctions on the vital energy industry over the war in Ukraine, but it has underlined the 27 countries' inability to agree so far on a much more sweeping embargo on oil and natural gas that would hit Russia harder but risk recession at home, reports AP.
The coal ban should cost Russia 4 billion euros ($4.4 billion) a year, the EU's executive commission said. Energy analysts and coal importers say Europe could replace Russian supply in a few months from other countries, including the U.S.
The move is significant because it breaks the taboo on severing Europe's energy ties with Russia. It's also certain to fuel already record-high inflation. But compared with natural gas and oil, coal is by far the easiest to cut off quickly 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 gas.
Shocking pictures of bodies in the Ukrainian town of Bucha are keeping discussion of broader sanctions alive, with EU officials saying they're working on targeting Russian oil.
While the EU ponders additional sanctions, Italian Premier Mario Draghi said no embargo of Russian natural gas is up for consideration now. "And I don't know if it ever will be on the table,'' he told reporters Wednesday.
EU countries, especially big economies like Italy and Germany, rely heavily on Russian natural gas to heat and cool homes, generate electricity and keep industry churning.
Still, Draghi said, "the more horrendous this war gets, the allied countries will ask, in the absence of our direct participation in the war, what else can this coalition of allies do to weaken Russia, to make it stop."
In case a gas embargo is proposed, Italy "will be very happy to follow it" if that would make peace possible, Draghi said. "If the price of gas can be exchanged for peace ... what do we choose? Peace? Or to have the air conditioning running in the summer?"
For now, even the coal ban brings worrying consequences for politicians and consumers. Germany and EU members in Eastern Europe still generate a large share of their power from coal despite a yearslong transition toward cleaner energy sources.
"The coal ban means European consumers will have to brace for high power prices throughout this year," according to a Rystad Energy statement.
Higher prices in countries that use more coal will spread across the EU through its well-connected power grid, the energy research company said. That will bring more pain. Europe has been facing high energy prices for months over a supply crunch, and jitters over the war have sent them even higher.