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Study-IW: Germany does not depend only on Russian gas

Russia is not only a major exporter of natural gas to Germany, but also provides important raw materials for industry.

Germany and the world market are dependent on Russian exports, especially of nickel, palladium and chromium, according to a study by the German Institute for Economics (IW), according to Handelsblatt, which was made available to Reuters. These are raw materials, some of which are difficult to replace.

“Therefore, new trade relations with alternative exporting countries are necessary for these raw materials,” said the Cologne-based institute, which is close to employers. Russia is a commodity giant. That is why it is important to promote free trade agreements such as TTIP and CETA with other democracies that are rich in raw materials and as stable as possible, such as the USA, Canada and South Africa.

Given the supply chain problem, it is important that fixed security of supply be placed more broadly in terms of raw materials. According to the IW, it is also necessary to consider “what national and pan-European potential is possible for the extraction and further processing of basic raw materials”. A third option involves recycling as a source of secondary raw materials and emphasizes the importance of the circular economy in Germany and Europe.

Following Russia’s invasion of Ukraine on February 24, the German government is trying to lay the groundwork for making Germany less dependent on Russian oil and gas in the future. At first glance, the suspension of trade relations with Russia seems bearable for Germany, write IW experts.

Which raw materials are still all from Russia

In 2019, before the coronavirus, Germany supplied only 2% of its imports from Russia, while raw materials accounted for a total of 7%. However, 40% of all nickel imports came from Russia. It also accounts for more than ten percent of total world nickel exports.

Germany also supplies a good 25% of its palladium imports from Russia, which is considered the world ‘s largest exporter of this raw material, which is so important to the car industry, for example. Palladium is mainly used in the manufacture of car catalytic converters, in the chemical industry and in electrical engineering.

The raw material is an important preliminary product for leading German industries, the study says. In the case of chromium, Russian imports account for more than 20% of all German imports and for cadmium almost 14%. “A look at trade statistics makes it clear that not only Germany but also the world market depends on Russia for raw materials.”

Source: Capital

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