Volkswagen, Europe’s top carmaker, is concerned about the impact a ban on Russian energy imports would have on its business, its CEO said on Wednesday, adding it was upgrading energy supply for its Wolfsburg factory to use alternative fuel sources.

“Understanding the situation, we just decided to upgrade our coal-fired power plants to still be able to use coal or gas,” Herbert Diess told journalists after presenting first-quarter results. “This refers to our main operations here in Wolfsburg.”

His comments came in response to a phased oil embargo on Russia that was proposed by the European Union’s chief executive earlier on Wednesday in a bid to deepen Moscow’s isolation.

“Yes we are concerned about the threat there,” Diess said, adding that it was not clear currently how the carmaker’s supply chain would be impacted should the bloc at some point decide on a gas embargo, which is currently not planned.

“Our energy consumption in the car manufacturing plants is not so high, most of it goes into the paint shop, and I think we are quite resilient there. But actually ... a shut-off or cut-down of gas would potentially harm the German economy quite substantially.”