Germany has been accused of “financing the Russian war machine” as it continues to utilise its oils despite publicly showing support for Ukraine and claiming to have banned direct imports of the resource.
On Friday, Berlin blocked what would have been the first-ever sanctions on Russia’s lucrative liquefied natural gas sector (LNG) – the day before an international peace conference on the ongoing war in Ukraine.
It would have banned countries from re-exporting Russian LNG from EU ports as well as helping to finance Arctic and Baltic LNG terminals, but Germany vetoed it over fears that it would affect consumer goods.
Jeffrey Sonnenfeld, a senior associate dean at the Yale School of Management, and Steve Tian, research director of the Chief Executive Leadership Institute, slammed Germany’s actions as shameful as harming Ukraine while aiding Russia.
They told the Daily Express: “Germany should be ashamed for blocking these vital sanctions. And sadly, by blocking these sanctions, whether it intended to or not, Germany is hurting Ukraine’s defence and financing the Russian war machine. Germany ought to be embarrassed.”
However, it has been reported that there are currently ongoing negotiations aimed at overturning Germany’s veto to ensure the strictest economic sanctions are enacted on Russia, according to an anonymous German diplomat speaking to POLITICO.
This, the experts say, could be a hopeful sign that proceedings are moving in the right direction as Germany may have blocked the sanctions merely as a “stalling tactic” rather than to actually ensure they never get passed.
Sonnenfeld and Tian added: “There is hope that perhaps some compromise will be worked out – as reports are that German diplomats are engaged in furious backchannel conversations across the EU right now to find some path forward and to allow these sanctions to move forward.
“So this block by Germany may reflect more of a stalling tactic to gain leverage on other matters or to provide domestic energy companies more time to retrench rather than a permanent veto.”
Berlin vetoed the sanctions because customers of EU companies would be prevented from selling goods to Russia. Previous bans only included firearms, battlefield items and dual-use goods, but the new ones have expanded to more civilian products including chemicals and machinery for metalworking.
This comes as a new study revealed that deliveries of Russian LNG into Germany from Belgium have likely increased since the Russia-Ukraine war broke out, despite Germany banning direct imports of it, according to environmental NGOs Urgewals and Bond Peter Leefmilieu.
However, Sonnenfeld and Tian acknowledged the country’s “admirable progress” in becoming less reliant on Russian gas, pointing to the recent abolishment of a tax on gas piped from Iberia through Germany to its neighbours.
They said: “Already, Germany has made admirable progress in weaning themselves off Russian energy… And it’s important to remember that Russian LNG is a tiny proportion of pre-war Russian gas sales as 90 percent of Russian gas was piped gas, not liquified.
“Piped gas required pipelines, and Russian liquefaction technology dramatically lags the West in both quality and quantity. As a result, Russia can’t sell most of its gas to anyone and is flaring off most of its gas.”
Across the EU as a whole, new data revealed that, in May, Russia overtook the US as the biggest supplier of pipeline gas and LNG to the member states, as well as the UK, Switzerland, Serbia, Bosnia and Herzegovina and North Macedonia, for the first time in nearly two years.
Overall in that month, 15 per cent of piped gas and LNG shipments to the EU, UK, Switzerland, Serbia, Bosnia and Herzegovina, and North Macedonia came from Russia.
Tom Marzec-Manser, head of gas analytics at consultancy ICIS, told the Financial Times: “It’s striking to see the market share of Russian gas and [LNG] inch higher in Europe after all we have been through, and all the efforts made to decouple and de-risk energy supply.”
Despite this, Sonnenfeld and Tian explained the work of European nations in cutting down their consumption of Russian gas, with notable efforts from Poland, Lithuania, Spain, and Portugal, as well as Germany.
They concluded: “Europe now needs very little Russian gas in practice. Where once they were over 50 percent dependent on Russian gas, now, Europe as a whole receives less than five percent of its gas from Russia and LNG exports to Europe have tripled from non-Russian sources ranging from the US, Algeria, Qatar, Australia, Norway, and other key exporters.”
