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EU ban on Russian coal imports may accelerate rise in European electricity prices — expert

Ekaterina Kvasha stated that the scarcity of fossil resources in Europe was threatening to halt efforts to phase down nuclear energy

MOSCOW, August 10. /TASS/. The EU and UK embargo on Russian coal imports, which takes effect on August 10, could trigger an increase in European electricity prices, Director of the National Energy Efficiency Center Ekaterina Kvasha told reporters on Wednesday.

According to the expert, the restrictions might have a significant impact not only on the price of energy resources in Europe, but also on the structure of the region's electricity generation balance.

"Coal represents around 15% of European electricity generation, with Russia accounting for half of all imported thermal coal. An alternative may be coal from Australia or Indonesia, but the price will be higher due to logistics and a general increase in the price of coal on the market. In the face of a major increase in gas costs and supply issues (it accounts for around 20% of energy generated), this could lead to an even larger spike across electricity tariffs in Europe," Kvasha said.

She also stated that the scarcity of fossil resources in Europe, as well as the inability to rapidly replace them with renewable ones, is threatening to halt efforts to phase down nuclear energy, particularly in Germany.

According to the expert, the volumes of Russian coal released as a result of the embargo can be redirected to the growing markets of Southeast Asia, China, and India.

Press service of the Russian Ministry of Economic Development told TASS that in 2021, coal supplies from Russia to the EU amounted to 48.7 mln tonnes, to the UK - 2 mln tonnes. At the same time, according to the ministry, at the end of 2021, the share of Russia in the total volume of coal supplies in physical terms reached 52% of the total imports of the EU, and the UK - 38%. "In value terms, the share of Russia in the total volume of coal supplies was 40% to the EU and 43% to the UK," the ministry noted.

Early in April, European Union ambassadors agreed on the fifth package of sanctions against Russia, which included restrictions on individuals and financial institutions, as well as an embargo on Russian coal imports and the delivery of high-tech goods. German Chancellor Olaf Scholz, in particular, stated that Germany should fully utilize the four-month transition period for phasing out Russian coal imports. Back in July, the UK Department of International Trade announced a ban on Russian coal imports beginning August 10.

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