German unions and companies team up to oppose EU ban on Russian gas

German unions and companies teamed up on Monday to announce they oppose a European Union ban on Russian natural gas imports as EU leaders debate further sanctions on Russia over its unprovoked war in Ukraine.

In a joint statement, the chairmen of Germany’s DGB trade union organization and BDA employer’s association said a future EU ban would cause job loss and factory shutdowns, the Associated Press reported.

“A rapid gas embargo would lead to loss of production, shutdowns, a further de-industrialization and the long-term loss of work positions in Germany,” the joint statement read.

Some Western countries have pulled themselves away from Russian energy imports, and the EU earlier this month said it would ban Russian coal though it has so far avoided banning natural gas and oil.

Germany, however, is very dependent on Russian commodities especially natural gas. A decades-long relationship between Russia and Germany has left the latter in a bind as it faces escalating pressure to ditch Russian goods. Germany’s purchases of Russian oil and gas are estimated to add about $220 million to the Kremlin’s balance sheet every day, effectively funding the country’s invasion of Ukraine.

Yet Russia supplied almost one-third of Germany’s total energy needs in 2021. That makes it tricky to quickly sever the trade relationship without suffering dramatically higher energy prices and likely economic disaster. The West’s next sanctions aim to strangle Russia’s fundraising abilities, but Germany’s reliance on energy imports represents a major hurdle in doing so.

Meanwhile, the US said it would ban all Russian energy imports, and the UK said it would stop importing Russian oil by the end of 2022.

To be sure, Germany has taken some major steps toward weaning itself off of Russian energy. The country has already shrunk its usage of Russian oil to 25% from 35% and halved its imports of Russian coal, economy minister Robert Habeck said in late March.

Natural gas is a tougher commodity to replace. Germany expects to slash its use of Russian gas by 24% by the summer, but cutting Russia out of the country’s gas supply entirely could take until the summer of 2024, Habeck said.

With German unions and companies pushing back against such a ban, cutting out Russian gas could take longer still.