Despite Russia’s winter challenge, Europe has not yet broken | Popgen Tech


Ten months later and the Ukraine war twists life in Europe in new ways every week.

On one side of the continent, the sight of tankers queuing at the Bosphorus showed that the Black Sea oil trade had been disrupted. On the other hand, the French are asking the British to reduce the draw of electricity through the submarine interconnection so that both sides can manage the peak daily demand in a cold snap.

If Russian President Vladimir Putin is gambling that the European public will turn against their politicians’ united front in Ukraine, then the subzero temperatures represent his best chance to achieve that goal.

Mr Putin is starving the Europeans of natural gas flows. This pushed up energy prices. The policy response to this partly tries to save on demand, but when houses are cold there is only so much that can be saved.

The British and the Germans are leading the way in spending Covid-19 levels of intervention to limit the amount households and businesses pay for their winter supplies.

One of the divisions in Europe is that the EU bloc cannot agree on whether to use its pricing power to limit the amount paid for the gas in the first place. The European Commission’s proposal to force producers to keep below a cap has met opposition from Germany. Having secured supply deals, Berlin does not want to limit its maneuver and is therefore reluctant to allow Brussels to set the terms for the market.

The Kremlin, meanwhile, could further exacerbate the overall energy situation by retaliating against the G7 decision to impose a limit on its oil exports via the maritime insurance market. This was the reason for the accumulation of the tanker in Turkey.

The speed of change caused by the Ukraine conflict is increasing

The Turkish president, Recep Tayyip Erdogan, wanted to be seen as even-handed in his implementation of compliance with the oil cap by ordering that all oil vessels be subject to checks when passing through the strait. It has boosted exports from countries such as Kazakhstan and Azerbaijan, which are not targeted by the measure.

If Russia decides to divert its oil to Asia, it will need to acquire a shadow fleet of tankers to carry its discounted production. It won’t be easy, but you wouldn’t rule it out if 2023 has to keep up with 2022’s record of bad news.

In ways big and small, the speed of change brought about by the conflict is accelerating. Take the recommendation made by the UK Parliament’s Climate Change Committee that the government should mandate new domestic boilers to be hydrogen-ready from 2025.

Homes in the UK need to adapt more quickly, for reasons related to how fuel is sourced and the overarching climate change challenge under its net zero emissions commitments. This is a big undertaking. A report issued by another British parliamentary committee on Monday said the country must change the way it obtains, uses and stores energy.

“Hydrogen will have its place in this portfolio,” the report says. “But we do not believe that this will be the panacea for our problems that can sometimes be derived from the hope that is placed on it.

“Essential questions remain to be answered about how in the future large quantities of hydrogen can be produced, distributed and used in ways that are compatible with Net Zero and cost efficiency. In the words of one of the witnesses to our investigation, hydrogen is likely to be a ‘huge niche’ where it will play a major role in certain sectors of the economy, and will be a ‘huge growth story’ over the next 30 years . “

Greek-flagged crude oil tanker Delta Hellas sails in the Bosphorus, on its way to the Mediterranean, in Istanbul last week.  Reuters

Also in the United Kingdom, the Homes for Ukraine scheme is undergoing testing. More than 2,000 Ukrainians are registered homeless as some 50,000 Ukrainians reach the six-month limit for support. A survey of the hosts still found remarkable levels of generosity in difficult times. Overall, three-quarters of respondents to the Office for National Statistics said the cost of living affected their ability to provide support on the scheme – 18 per cent said “a lot”, 29 per cent said “somewhat” and 30 per cent “a little” “.

Two-thirds said the most common problem was uncertainty about what will happen to guests after the hosting ends, while seven in 10 said they have discussed with their guests what will happen after the current hosting arrangement ends, with one-quarter saying a plan agreed upon.

Europe got a shot in the arm late Thursday when it won support from EU members for the €18 billion ($19 billion) package the bloc plans to give Ukraine budgetary and military support. The package was vetoed by Hungary, which remains a Russian energy consumer, and then Poland raised objections.

The stand-off brought in the EU’s commitment to a global minimum corporation tax level, something that would have been much quicker to implement without the frustrations over the economic downturn.

These are political disputes and issues that need to be overcome. Despite the widespread hardship, and with Ukraine an ever-present part of the European news cycle, there is little sign that the continent is changing its mind about support for its neighbour.

Published: December 19, 2022, 4:00 am


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