Germany gives fuel cargo priority on rail amid energy crunch

Coal plant in Germany

Germany will prioritize shipments of coal and fuel for power stations on the country’s rail network in the government’s latest move to prevent the energy crisis from spiraling out of control this winter.

Europe’s biggest economy is facing an energy crunch due to uncertainty over supplies from Russia, and is seeking to ramp up power generation from coal and oil to save gas. Recent hot weather has exacerbated transport difficulties, lowering water levels on Germany’s inland waterways and restricting barge traffic.

Companies such as Uniper SE have faced difficulties in getting enough coal to keep power plants fully operating. The transport problems are another blow to an economy that is already grappling with accelerating inflation and a growing risk of recession.

“We want to free ourselves from the grip of Russian energy imports as quickly as possible,” German Economy Minister Robert Habeck said Wednesday in an emailed statement after Chancellor Olaf Scholz’s cabinet approved the measure. “This requires very sophisticated logistics, which makes it necessary to prioritize energy transports by rail.”

Germany’s supply chains were strained in recent weeks as the Rhine river — one of Europe’s most important waterways — dropped to impassable levels, exposing fragile inland rail routes incapable of taking on additional capacity.

The new decree prioritizing energy shipments over passenger traffic or other goods — which expires after six months — has created some controversy, with Germany’s creaking rail network already beset by delays.

“This is not an easy decision because it could mean that in some cases other trains have to wait,” Transport Minister Volker Wissing said in an emailed statement. “It is all the more important to create clear rules today before the additional need for energy kicks in and transport demand increases in autumn and winter.”

Scholz’s cabinet also approved a raft of measures Wednesday designed to help the government achieve its target of cutting gas consumption by a fifth this fall and winter.

The measures, which Habeck said will reduce gas use by about two per cent and save around 10.8 billion euros ($10.7 billion) in the next two years, include:

  • A ban on heating private swimming pools
  • Stopping the heating of some areas in public buildings
  • Cutting the minimum office temperature to 19 C (66 F)
  • Banning most outside lighting for buildings and monuments
  • Boosting energy efficiency in public and private buildings

“What we are facing requires a national effort,” Habeck said. “Every contribution counts.”

© 2022 Bloomberg L.P.

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