To prevent an energy and food security catastrophe in developing nations, the EU has removed some restrictions on the sale and funding of Russian coal and some chemicals, the EU Observer reports.
In advice distributed to EU member states last month, the EU Commission said that coal should be permitted to tackle food and energy poverty around the world.
Additionally permitted for financing and shipping to foreign nations by EU businesses are chemicals used in animal feed and some fertilizers and fuels.
A number of EU members, especially Poland and the Baltic states, have criticized the partial relaxation of sanctions because they believe it would encourage Russia’s military activities.
The fundamental threat Russian fossil fuels represent to global energy and food security, however, hinders EU efforts to abandon them.
Energy security throughout the world is in jeopardy due to the rebounding coal demand, which is being fueled by Europe’s energy and gas shortage. Prices have reached a nearly all-time high of $441 per tonne.
The impact of the EU sanctions against trading Russian oil, which will go into effect on December 5, could even be more severe, according to a new study by the Bank of International Settlements (BIS), the Basel-based organization that supervises central banks.
Encouraging the use of biofuels like ethanol and biodiesel might drive up the cost of corn, maize, and other commodities like soybeans for years.
The rise in demand for crops like corn, sugarcane, wheat, barley, and sorghum as well as items needed to create biodiesel, like palm oil, which is additionally used in a variety of processed meals, can be mitigated by this, but it will also boost oil prices.
Since the US is the world’s largest maize grower and 40% of its crop is used to make ethanol, corn is particularly significant.
Meat costs will rise as a result of increased prices spilling over to substitutes like soybeans since there will be less grain available to feed cows, pigs, and chickens.
Avalos and Huang note that while EU sanctions do not specifically target agricultural products, the ban on Russian fossil fuels is expected to keep prices high.