Reducing Reliance on Russia Germany's Economy Minister Goes Shopping

German Economics Minister Robert Habeck traveled to Qatar this weekend to negotiate liquid natural gas deals that can help reduce his country's reliance of fossil fuel from Russia. He managed to secure an agreement the first day.

By Gerald Traufetter in Qatar
German Economics Minister Robert Habeck during his meeting with the Emir of Qatar, Sheikh Tamim bin Hamad Al Thani, on Sunday in Doha.

German Economics Minister Robert Habeck during his meeting with the Emir of Qatar, Sheikh Tamim bin Hamad Al Thani, on Sunday in Doha.

Foto:

Qatar Amiri Diwan / AP

In a certain sense, the seating arrangement is pretty much in keeping with the nature of the trip. As German Economy Minister Robert Habeck met with his Qatari counterpart on Sunday in Doha, the latter took a seat at the front of the room, on a chair with a visibly higher backrest.

Habeck himself had to sit at the long side of the room, in a row with the representatives of his delegation. "It’s all rather formally structured," he would later say of the meeting. "But beyond the formality, we managed to find a basis for conversation."

The scene, though, clearly demonstrated that it is the Germans who need the Qataris and not the other way around. The war in Ukraine has been raging for more than three weeks now, and Habeck is on a kind of shopping spree, first in the Emirate of Qatar and then, on Monday, in the United Arab Emirates.

An Unforgotten Snub by the German President

Qatar is sitting on one of the world’s largest natural gas reserves, with plans to almost double production in the next few years. And it is precisely this fossil-fuel treasure that Habeck is targeting in the current geopolitical crisis. All he has to do is iron out the mistakes made by his predecessors, which led Germany into a misguided dependence on Russian energy supplies.

The hope is that Qatar can help. But for years, no German economy minister has visited the Persian Gulf country, even though such visit would have been so important for the Qataris. German President Frank-Walter Steinmeier has cancelled two trips, a reality that hasn’t been forgotten by the Qataris.

The last visit by a German economy minister to the emirate was made by Social Democrat Sigmar Gabriel back in 2015. No one was interested in showing much solidarity with the Qataris due to the country's exploitation of workers during the construction of the sites where the football World Cup is to be held this fall - and because of the autocratic nature of the family that rules Qatar and its support for Islamist groups.

But the war in Ukraine has left little room for such squeamishness. It is, to be sure, a bit ironic that it has fallen to Habeck - a co-leader of the environmentalist Green Party - to make the shift. Still, despite the amount of patience and pragmatism the trip is demanding of him, he seems to be making progress.

And success, despite the seemingly high odds against it, is a must on this trip.

German Economics Minister Habeck during talks with Sheikh Mohamed bin Hamad bin Qassim Al Abdullah Al Thani (2nd from left), Qatar's minister for trade and industry.

German Economics Minister Habeck during talks with Sheikh Mohamed bin Hamad bin Qassim Al Abdullah Al Thani (2nd from left), Qatar's minister for trade and industry.

Foto: Bernd von Jutrczenka / dpa

Habeck’s Double Strategy

The political credo of the still relatively young emir and his ruling family is: "The future is gas." Habeck, meanwhile, finds himself in the awkward position of stilling Germany's thirst for natural gas while reducing reliance on Russia. "The goal," he insists, "must ultimately be that of becoming independent of fossil fuels altogether."

During the trip, he mentioned repeatedly that this is not just about securing long-term supply contracts for Qatari liquified natural gas, but also about building the infrastructure for a climate-friendly hydrogen economy. He says that renewable energies are to be built up in Germany at a record pace. Hydrogen is needed as an energy source in many industrial processes and also to power aircraft and ships.

What Habeck has in mind is an energy partnership with the two countries on the Gulf to produce hydrogen from green electricity. You have to go "where there’s a lot of sunshine," he says. Places like Qatar or the United Arab Emirates so that they can produce hydrogen and leave the harmful hydrocarbons in the ground.

Qatar, though, isn’t the United Arab Emirates, where carbon-neutral cities of the future are being built to show that they understand that humanity must steer away from coal, oil and gas. As such, it was an open question prior to Habeck's trip as to whether the Qataris would go along with Germany's dual strategy.

Closing Ranks with Business Representatives

Habeck, who is also Germany’s vice chancellor, succeeded in bringing on board a high-ranking delegation of business representatives, such as Markus Krebber, the CEO of the German energy giant RWE. Krebber wants to sign a lavish supply contract for liquified gas with the Qataris soon, along with an additional deal for hydrogen production. Martina Merz, the CEO of German steel giant ThyssenKrupp, also wants to get involved. "We intend to invest 1 billion euros in a plant for the production of steel through direct reduction," she said.

The hydrogen required for the process is to be transported in the form of ammonia. The smelly liquid is something of a lifeblood in industry circles right now. It can be produced from hydrogen in places the like Arabian Peninsula and brought to Germany on ships and then transported ashore via gas terminals that are yet to be built in Germany – and then divided back into hydrogen.

The Thyssen boss wants to use the volatile energy source to replace coke in the blast furnaces and produce "green" steel. Werner Baumann, the head of pharmaceuticals giant Bayer, has similar plans. His company’s chemical plants have so far been fired by natural gas.

On Sunday, he stood side by side with Merz and Krebber - together with Habeck. Until recently, such a closing of ranks would have been quite unusual. Many a top Green politician would even have gone to great lengths to avoid such a grouping. But Habeck told his supporters that the business community is ready to take action on climate change.

What's more: Many industry bosses are now his allies and not his enemies – at least that’s what they say. Habeck hinted on Sunday that a number of companies are about to sign contracts in Qatar. He said he was there to provide them with "motivational support." He said he had been told that in Qatar, the state and business are viewed as a single entity – and that without the presence of high-ranking German politicians, there would be no high-value business deals.

Executives like Thyssen CEO Merz or chemicals giant BASF Vice Chairman Hans-Ulrich Engel, who was also on the trip, will need vast of amounts of green hydrogen in the future. Those companies alone are responsible for measurable percentage of Germany’s CO2 emissions. In that respect, Habeck’s dual strategy of stocking up on liquefied gas from fossil sources in the short term, with the justification of reducing reliance on Russia, isn’t wrong either. And he's also seeking to set the course for the import or green energy during his Gulf shopping spree.

A Moment of Geopolitics for the Minister

By midday on Sunday, it became clear that the tide was turning for both – the Green Party economy minister and the entrepreneurs. The breakthrough came during a visit to Emir Tamim bin Hamad Al Thani in his huge palace above Doha's Corniche waterfront promenade. Speaking to the journalists who traveled together with him, Habeck later said he had something "great" to announce. "We have agreed on energy cooperation," he said, beaming.

Habeck walking along the banks of the Persian Gulf during a break between talks.

Habeck walking along the banks of the Persian Gulf during a break between talks.

Foto: Bernd von Jutrczenka / dpa

He said the agreement would include two elements: the much needed liquified natural gas supplies. "Yes, we talked about annual figure and supply contracts," he said, smiling a bit conspiratorially. But he also revealed he had been "surprised" during the visit, because the emir also wanted to talk about renewable energies and energy efficiency. All areas in which he had thought the Qataris had no interest.

Discussing these issues in Qatar turned out to be the right thing to do, he said, especially with the war in Ukraine raging "more brutally than ever." He said that when the Russians see the decisions that are being made here in Qatar, they will know that a large slice of natural gas exports is disappearing for Moscow.

He then focused his remarks almost directly at Russian President Vladimir Putin, by quoting from the Bible: "He who has ears to hear, let him hear."