February 24th 2022 has marked a turning point for Europe and the Western world, or – as German Chancellor Olaf Scholz has put it – the day marks the beginning of a “new era”.
The illegal war of aggression in Ukraine has already lasted longer than many expected – and there is no end in sight. It is not yet possible to foresee what impact the invasion of the sovereign neighbouring state of Ukraine by the Russian president’s troops in violation of international law will have on society, politics and the global economy in the long term.
Above the economic and geopolitical matters, there is the humanitarian catastrophe. The consequences of the destruction of entire cities and the resulting refugee flows are devastating for those affected; people are losing their homes, their belongings, their lives.
The far-reaching economic sanctions imposed on Russia have already resulted in severe cuts for the autocratic regime; however, the effects are felt worldwide. Energy prices are skyrocketing; numerous consumer goods are becoming scarce or dramatically more expensive.
The pressure on already strained supply chains is further increased by the war, which also massively affects traffic in the strategically important Black Sea and the Sea of Azov. The current strict Covid-related policy in China, by the way, is no help in this regard.
The amount of coal and gas that is still being imported from Russia is enormous. Since the beginning of Russia’s attack on Ukraine, EU states have paid Russia about EUR 35 billion for energy supplies.
As the war enters yet another month, and beside the discussion of heavy arms shipments to Ukraine and the reception and care of refugees, Western European nations are now pushing to achieve energy autonomy as quickly as possible.
Reducing dependence on Russia without jeopardising security of supply is a major challenge. Energy from renewable sources will not be sufficient in the short term. More imported LNG from other countries such as Qatar is not an easy option either, because large quantities are already committed, and countries such as Germany would have to pay high prices on the spot market. And even with more supplies from the United States, which were recently announced, rapid independence is not possible.
However, despite these limitations, we must not lose sight of the big goal. Full and sustainable energy sovereignty can only be achieved with renewable sources. The new coalition in Germany noted this in its so-called Easter package. Among other things, it states that offshore expansion should be in the “overriding public interest” in the future. This has not only symbolic value, but also concrete legal consequences, which should also accelerate and simplify the approval of new offshore facilities. By 2035, Germany’s electricity is to come almost entirely from renewable sources – an ambitious goal.
In the meantime, diversification of LNG imports remains the number one priority for many countries. Here, entrepreneurial Greek owners were amongst the first to recognise the opportunities available in new United States export trades. With the largest fleet of LNG carriers worldwide, in which billions of dollars have been invested, a sort of golden moment has appeared for Greek owners.
Some might even argue that the global fleet of LNG carriers is becoming clearly instrumental in this war. And of course, this risk exists. The maritime industry cannot be viewed in isolation from current geopolitical developments. As everywhere, there will be black sheep who smell big business, regardless of the humanitarian catastrophe. The vast majority, however, are likely to commit maximum resources – human, technological and financial – into working toward a sustainable and secure energy future.