Netherlands no longer dependent on Russian energy
Almost a year after Russia invaded Ukraine, the Netherlands has virtually stopped importing energy from Russia. The only exception is Russian liquified natural gas (LNG), which is transported not by pipeline but by ship. After the outbreak of the war in Ukraine, the European Union agreed to phase out Russian energy imports as quickly as possible. The Netherlands has worked hard to avert the shortages that this threatened to cause. Last Sunday, sanctions on Russian petroleum products took effect. In combination with the existing sanctions on coal and crude oil, this means that virtually no Russian petroleum products, crude oil or coal are now entering the Netherlands. Russian gas through pipelines has also virtually dried up.
‘Shortly after the outbreak of the war in Ukraine, we set ourselves the objective of curbing energy imports from Russia to the greatest extent possible, as quickly as possible, in order to stop contributing to Russia’s war chest,’ commented Rob Jetten, Minister for Climate and Energy Policy. ‘That’s because more than 60% of Russia’s government revenues were derived from exports of fossil fuels. We’ve been making strenuous efforts since then to find alternative sources, save energy, accelerate the energy transition and mitigate energy price rises where possible. We continue to work hard to ensure that the current demand for gas is met, for instance by facilitating increased imports of LNG from diversified, more stable regions, ensuring that gas storage facilities are adequately filled, organising joint gas purchasing at EU level and saving energy.’
Russian oil and coal imports phased out
The ban on importing Russian crude oil took effect on 5 December 2022, followed by a ban on importing Russian petroleum products such as diesel and kerosine on 5 February 2023. Since December 2022, Russian crude oil has stopped entering the Netherlands, having accounted for 30% of crude oil imports in 2022 as a whole. The possibility of Russian crude oil or petroleum products entering Europe indirectly cannot be completely excluded, because supplies are sometimes mixed elsewhere and the origins are difficult to trace. In addition to a ban on importing Russian crude oil and petroleum products, the EU member states have also decided to set a price cap: businesses in the EU are not permitted to transport, insure or render any other services whatsoever in relation to Russian crude oil and petroleum products purchased in excess of that price. The main aim of the sanctions is to hit the finances of the Russian government. The sanctions on crude oil alone are estimated to be costing it around EUR 160 million in lost revenue on a daily basis. The estimated loss will be higher once the effects of the sanctions on petroleum products become known.
The Netherlands is not expected to experience any supply shortages in the short term because stocks have already been purchased and refineries in the Netherlands are switching to oil from other countries. Furthermore, the Netherlands has carefully managed its strategic reserves of oil and petroleum products, with supply for 90 days of domestic consumption.
Imports of Russian coal have been banned since 10 Augustus 2022, and Russian coal is no longer entering the Netherlands. Alternative suppliers have been found in Australia and South Africa to fill the shortfalls, which means that coal-fired power stations in the Netherlands (and elsewhere in northwestern Europe) remain able to make up for electricity that would otherwise have been generated by gas-powered stations.
Reduction in Russian gas imports
Although it is not subject to any sanctions, there is virtually no Russian gas entering the Netherlands through pipelines. Prior to the war in Ukraine, Russian gas accounted for 25% of Dutch imports. Europe as a whole has also cut its Russian gas imports considerably. Before the war, Russian gas accounted for around 45% of imports, whereas it now accounts for around 10%.
The percentage of LNG imported from Russia has also halved, from 30% in 2021 to 15% now. [1] The reduction in gas imports from Russia has largely been offset by importing LNG, but also by doubling gas imports from Belgium and increasing gas imports from the United Kingdom.
A number of measures are being implemented in order to ensure sufficient gas supplies for next winter. The gas storage facilities will once again be required to be at least 90% full, enough for around a third of the Netherlands’ annual use. That gas will however also be used by other European countries. Efforts are also being made to further increase the capacity for importing LNG, following last year’s doubling of capacity. Both the new Eems Energy Terminal and the Gate terminal offer scope for such further expansion. The possibility of establishing new LNG terminals in the Netherlands from 2024 onwards is also being examined. When it comes to imports, including of LNG, the Netherlands is working at EU level on a joint purchasing action plan.
[1] The volume of LNG imported from Russia remained roughly the same in 2022 as in 2021. But the doubling of LNG imports as a whole – including LNG from countries other than Russia – meant that the percentage of LNG imported from Russia decreased.