Will a Russian oil ban resurrect the 1970s?

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As denizens of the Brussels bubble make their way back from the Easter break, the chatter around the EU capital has turned to fossil fuel sanctions.

Speculation is rife that within days, there will be an announcement of fresh sanctions targeting Russian oil, one of the Kremlin’s biggest money spinners.

What exactly will be announced is not clear. There are rumours that Brussels will impose an outright import ban. Others believe the sanctions will be lighter, consisting of new tariffs and a set phase-out date.

This lack of clarity stems largely from the political gap on the issue among member states. When it comes to an outright ban, Germany is still unconvinced (though its views seem to be evolving), while Hungary remains dead set against any embargo.

This contrasts with other EU countries who have shown significant willingness to cut off Russian oil, notably France. An emboldened President Emmanuel Macron, buoyed by his re-election on Sunday, is likely to push EU partners to embrace the concept with a renewed vigour.

While it’s difficult to say what Brussels will ultimately announce, any sanctions on oil will almost certainly trigger further price shocks, which will be felt at the petrol pump and on the overall cost of living.

Leaders have an unpalatable choice: stop funding Russia’s brutal war in Ukraine through oil imports and accept the economic hit or jettison the EU’s principles in the name of relative stability.

If a ban is announced, elevated fuel prices will compound the pain of the last months and are likely to foment further civil unrest (witness the mass protests against spiralling living costs that have engulfed Spain).

To soften the blow, governments may choose to keep petrol and diesel prices steady by doubling down on subsidies and price caps.

This is far from ideal. Not only is it essentially a subsidy for Putin until the ban is fully implemented, but it also prevents demand from dropping, thereby keeping prices high in real terms.

It additionally complicates government plans for carbon taxes and the expansion of the EU Emissions Trading Scheme (ETS) to road transport. Simultaneously subsidising oil to lower prices while taxing oil to push prices up makes little sense, whatever the original rationale behind both decisions.

Another option is to dust off the 1970s playbook and target the demand side.

Those of a certain age may recall the oil shortage of the 1970s. In response to the crisis, then-US president Jimmy Carter encouraged Americans in a series of speeches to use less energy. Carter himself refused to turn on air conditioning in the White House and sold the presidential yacht as a symbolic act.

His message of energy restraint was not popular, and Carter was ejected from the White House after one term.

In 2022, European governments will likely hope they can convince citizens to change their habits by focusing on the positives of living a less energy-dependent lifestyle – lower costs, cleaner air, and better health.

Environmentalists have been pushing such policies for years: higher levels of cycling, cheaper and more expansive public transport, a shift to car sharing, and lower speed limits.

But the reality is that telling citizens to drive less and use less energy is as likely to be unpopular today as it was some 50 years ago.

Whatever the path taken, Europe’s reliance on fossil fuels – particularly from an unstable neighbour – must come to an end, both for geopolitical and climate reasons.

Russia’s invasion has merely hastened Europe’s energy reckoning.


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EU Battery Regulation to be agreed by summer

The EU’s mammoth battery regulation, which covers everything from the extraction of raw materials to collection and recycling targets, is currently being debated by the European Parliament and Council.

The legislation seeks to make European batteries the greenest in the world by setting carbon emissions limits on production, obliging manufacturers to use recycled content, and imposing checks to prevent labour abuses in the battery supply chain.

The outcome of the inter-institutional wrangling will have a major impact on the electric car industry. All batteries produced for the vehicles will need to adhere to the requirements of the legislation.

EURACTIV understands that France, which holds the rotating presidency of the Council until July, is keen to progress the file as quickly as possible.

Several further trialogues are already scheduled, with the aim of having an agreement brokered before the summer break.


Taxi operators turn to hydrogen to cut emissions

Much of the debate on the future of private road transport has come down to internal combustion engine cars vs electric vehicles.

But there is another option, which is proving popular among taxi fleet operators – hydrogen fuel cells.

Cities across Europe have seen a boost in the number of hydrogen-powered taxis, thanks in part to favourable legislation.

The Clean Hydrogen Partnership, a joint venture between the EU and industry, aims to roll out 180 hydrogen fuel cell vehicles in Paris, London, and Copenhagen.

“Hydrogen is the ideal fuel for taxis because of the long-range, intensive use and short recharging time,” said Clean Hydrogen Partnership CEO Bart Biebuyck.

Hydrogen-fuel cell vehicles have a similar range to internal combustion engine cars and can be refuelled in around five minutes.

The EU is supporting the Clean Hydrogen Partnership with €1 billion to accelerate the development of clean hydrogen applications.

Read EURACTIV journalist Nelly Moussu’s full report below.


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