Germany urges reduced gas consumption, Poland to halt Russian oil imports

The move by Germany’s Ministry for Economic Affairs and Climate Action to initiate the “early warning” phase of its emergency gas plan was precautionary. It involved assembling a crisis team to monitor supplies as the government asked businesses and private households to “reduce their consumption as much as possible.”

Later phases of the emergency plan, if implemented, could involve rationing gas.

Resorting to emergency mechanisms “signals that Berlin wants to prepare the markets and also put the Kremlin on notice that it’s ready for escalation,” said Franca Wolf, a senior analyst at the Britain-based risk consultancy Verisk Maplecroft. It also shows that Germany, even as it balks at a Europe-wide embargo on Russian energy supplies, “does accept that the current situation is not feasible or sustainable.”

The question of an immediate embargo has divided the European Union, whose member states buy a quarter of their oil and more than 40 percent of their gas from Russian suppliers. Poland’s new pledge to halt Russian oil imports by the end of the year was especially significant, because it received nearly two-thirds of its imported crude oil from Russia last year, according to EU estimates. Only Germany and the Netherlands import more barrels per day from Russia.

Meanwhile, Germany’s request that people reduce their consumption stood out because of the absence thus far of large-scale efforts to induce behavioral change in response to the war. Instead, European leaders have sought alternative suppliers of the same fossil fuels flowing for decades from Russia. And in response to rising energy prices, governments have aimed to soften the blow for their citizens by slashing taxes and providing subsidies.

“Every kilowatt-hour is a contribution,” said Robert Habeck, Germany’s economics and climate minister and a Green party member, in explaining Wednesday how citizens could help conserve supplies and stave off further emergency measures.

The comments show how the continent’s largest economy is bracing for the potential that the Kremlin could hold back fossil fuels used to heat homes and generate electricity after leaders of the world’s major economies refused to pay for the supplies in the Russian currency.

Putin’s ultimatum about rubles, issued last week to “unfriendly” countries, was rejected Monday by leaders from the Group of Seven major economies, who issued a joint declaration saying the demand represented a breach of contract. Moscow had vowed to resolve by Thursday the practical arrangements necessary for foreign companies to use its currencies. But the parameters of its demands remained unclear.

Putin told German Chancellor Olaf Scholz in a Wednesday phone call that a new law requiring gas deliveries to be paid in rubles would not affect its European contracts, according to the chancellor’s spokesman. The Russian president said payments could be made in euros to Gazprombank, which would then convert the money into rubles, said the spokesman, Steffen Hebestreit. He said Scholz did not agree to such a procedure but requested written information about how it would work.

There were other signs Wednesday that the Kremlin was backing away from an immediate threat over payments. Putin spokesman Dmitry Peskov said the new rules would not take effect right away “for purely technological reasons.”

Germany’s early warning phase, based on a European Union regulation from 2017, means it will deploy a crisis team to monitor gas supplies. Later phases could involve the government removing certain sectors from the grid as it prioritizes households. Germany relies on Russia for about 40 percent of its natural gas, down recently from 55 percent, and 25 percent of its oil, down from 35 percent.

Klaus Müller, president of Germany’s gas regulator, Bundesnetzagentur, praised Germany’s move. “It is right that the economy minister declared the ‘early warning,’ ” he tweeted. “The aim is to avoid a deterioration in the gas supply for Germany and the EU via savings and purchases.” He said the regulator is urging consumers and industry to cooperate and “preparing for all scenarios.”

The government has resisted pressure to preemptively embargo Russian energy supplies, as the United States has done, saying that an immediate end to imports would wreak havoc on the German economy.

The economic outlook is already bleak. A group of economists advising the government on Wednesday lowered its growth forecast for the year. Economic output would expand by 1.8 percent year over last year, instead of 4.6 percent, predicted by the German Council of Economic Experts. Even absent a halt to gas supplies, the country’s inflation rate could hit 6.1 percent this year, the experts said, while suspending Russian energy imports would send the rate to between 7.5 and 9 percent.

“Russia’s war of aggression against Ukraine and energy prices are drastically worsening the economic outlook,” they said.

Reinhard Houben, a member of Germany’s Free Democratic Party who sits on the parliament’s economics and climate committee, said relying on Russian energy had proved a “heavy strategic mistake.” He warned of “severe consequences” for German businesses and citizens alike, even without an immediate halt to deliveries.

Threats by Russia have prompted other European nations to set deadlines for weaning themselves off supplies from the belligerent country. In Poland — a country known for heavy reliance on fossil fuels and one of Europe’s top coal producers — government leaders framed their new commitments as a model for the rest of the continent.

In addition to ending Russian oil imports by the end of the year, Poland would cut itself off from Russian coal as soon as April or May, said Prime Minister Mateusz Morawiecki. He said gas would also be part of the government’s “derussification” agenda.

Morawiecki urged other European countries to act alongside Poland and “walk away” from Russian energy supplies. Speaking at an oil refinery outside Warsaw, he said energy payments were funding the “war arsenal” unleashed by Putin, calling Europe’s dependence on Russian supplies “criminal.”

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