The Russia-Ukraine war continues to play havoc with global supply chains, and international sanctions could result in a massive European coal shortage.
“Because of what’s happening in Russia, there are no taboos in the choices member states can make,” Frans Timmermans, the E.U.’s climate czar, reportedly said.
The U.S. and E.U. leadership recently announced broad sanctions against Russia and coal was surprisingly on the list. Although not promptly approved by the 27 member states, European nations are almost singularly dependent on Russia for coal imports. Reports indicate Europe spends upwards of $1 billion every day on Russian coal, gas, and oil. While some point to that revenue funding the “war machine,” they also hitched their economies to the country they want to punish.
According to the U.S. Energy Information Administration, Russia exported 262 million short tons in 2021. That figure was up by 7 percent year-over-year and one-third of its coal exports were sent to European-affiliated countries. Germany, the Netherlands, Turkey, and Poland imported a combined 24 percent of all Russia’s coal exports last year. Germany stands as the most dependent on Russian coal, having imported 53 percent of its tonnage from Russia.
Thermal coal used to run turbines and generate electricity accounted for upwards of 90 percent of Russia’s exports. Europe also reportedly imports approximately 30 percent of its metallurgical coal and gets 70 percent of its total thermal coal from Russia. Needless to say, the E.U. will need other coal-producing nations to fill the void should political leaders follow through with broad sanctions.
“Russia is waging a cruel and ruthless war, not only against Ukraine’s brave troops, but also against its civilian population,” European Commission President Ursula von der Leyen reportedly said. “It is important to sustain utmost pressure on Putin and the Russian government at this critical point.”
Although the U.S. ranks fourth in coal exports, after Russia, America is a more likely suitor than the top two producers — Indonesia and Australia. The U.S. supplied heavy fossil fuel users such as Germany with 17 percent of its imported coal. While a far cry from neighboring Russia, Australia also contributed about 13 percent.
The U.S. certainly has the capacity to reboot coal mines and ramp up production. Before environmental regulations made it more cost-effective to burn natural gas to generate electricity, the U.S. was a leading producer. An industry already in the throes, U.S. coal production decreased 24.2 percent from 2019 to 2020, bottoming out at 535.4 million short tons.
Brian Ricketts, secretary general at Euracoal, reportedly stated the U.S. and Australia could replace 70 percent of Russia’s coal without necessarily increasing production. If coal sanctions become a reality in the coming weeks, American truckers can anticipate hauling a lot of coal from mines to ports.
Sources: wsj.com, fortune.com
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