London (CNN Business)Europe is planning to cut deeper into the Russian economy with a new round of sanctions that includes a ban on coal imports. It's also working on sanctions that could target Russian oil.
The measures were announced Tuesday by European Commission President Ursula von der Leyen and still need the approval of all 27 EU member states.
The bloc has already imposed four rounds of sanctions aimed at punishing Russian President Vladimir Putin and his government for ordering the invasion of Ukraine. The fifth round follows recent revelations of atrocities in Ukraine.
"We all saw the gruesome pictures from Bucha and other areas from which Russian troops have recently left," von der Leyen said in a statement. "These atrocities cannot and will not be left unanswered."
"We will impose an import ban on coal from Russia worth 4 billion euros [$4.4 billion] per year," she added.
If approved, the coal ban would be the first coordinated embargo by the European Union on the vast energy exports that power Russia's economy and generate hundreds of billions of dollars in revenue each year.
EU leaders have thus far been unable to agree on targeting Russian energy because of the risk it poses to the region's economy at a time of soaring natural gas and fuel prices. But the mood appears to have shifted this week. French President Emmanuel Macron said Monday he would support a total ban on Russian oil and coal imports, and Germany indicated Tuesday that it could support a coal ban.
"Russia is waging a cruel and ruthless war in Ukraine, not only against its brave troops but also against its civilian population," von der Leyen told reporters. "It is important to sustain utmost pressure on Putin and the Russian government at this point."
Russia was the world's third largest exporter of coal in 2020, behind Australia and Indonesia, according to the IEA. It's also the leading exporter of thermal coal to the European Union, ahead of China and South Korea.
European coal prices have already shot up in anticipation of potential sanctions. Rotterdam coal futures, the regional benchmark, have more than doubled since the start of the year to trade at around $295 per metric ton.
"Sanctioning coal will make life much more difficult for European utilities, which consume a lot of Russian coal, but energy companies can cope with this, and politicians find this an easier sale publicly because it chimes well with the general and accelerating EU green transition," Henning Gloystein, director of energy, climate and resources at Eurasia Group, told CNN Business.
The fifth round of sanctions also includes a complete ban on transactions with Russia's second biggest bank VTB and three other lenders. Russian-registered or operated ships would be banned from EU ports, with exemptions granted to vessels carrying energy, food and other humanitarian aid.
Exports of technology and other sensitive equipment worth 10 billion euros ($11 billion), such as quantum computers and advanced semiconductors, would be banned. And EU countries would also block the import of products such as wood, cement, seafood and liquor worth 5.5 billion ($6 billion).
"But this is not all. We are working on additional sanctions, including on oil imports, and we are reflecting on some of the ideas presented by the member states, such as taxes or specific payment channels such as an escrow account," von der Leyen added.
Russian oil has already been banned by the United States and United Kingdom, and a wider de facto embargo has taken hold as banks, traders, shippers and insurance companies try to avoid falling foul of financial sanctions. The International Energy Agency says Russia could be forced to limit its production by 3 million barrels per day, starting this month, as it struggles to find buyers.