Carbonaria of all countries, get it – Newspaper Kommersant No. 235 (7436) of 12/17/2022

Record high gas prices reversed the global trend of previous years to reduce coal-fired power generation. The International Energy Agency (IEA) expects an unprecedented level of global coal consumption this year – over 8 billion tons. At the same time, exports from Russia will be hindered by sanctions and a European embargo, as well as the cessation of supplies to Poland and Ukraine. It will be quite difficult to redirect these volumes to the East of Russia, so that coal production in the country will also decrease, the IEA predicts.

At the end of 2022, the export of Russian thermal coal will amount to 157 million tons, which is 10% lower than in 2021, the report says. report International Energy Agency. The drop is largely due to the cessation of overland exports to Poland and Ukraine, which cannot be diverted to the East in the short term due to rail bottlenecks.

In the first half of 2022, Russian thermal coal exports were already well below 2021 levels, the agency writes. Deliveries to Europe began to decline in March and came to a complete halt in August when the embargo took effect. Under these conditions, Russia increased exports to India, China, Turkey and Korea, although these volumes only partially compensate for the fall in exports to the West. Shipments to Asia are constrained by limited rail capacity.

In 2023, the IEA expects an even greater reduction in thermal coal exports due to sanctions. While Russia is likely to improve its existing eastbound export infrastructure, demand for imports in Asia is projected to fall as a result of increased domestic production in India and China.

“As a consequence, we expect steam coal exports from Russia to decline to 150 million tonnes in 2025, about 4.3% below exports in 2022,” the report says.

Russia will also reduce coal production by 7.4%, to 404 million tons, due to geopolitical factors and the EU ban on the import of Russian raw materials. Among large producers, a reduction is also expected in Australia – by 5.2%, to 446 million tons. But global production will beat the historical maximum of 2019, reaching 8.3 billion tons. Compared to 2021, China will increase production by 6.9%, to 6.4 billion tons, India – by 10.9%, to 1 billion tons, Indonesia – by 9.3%, to 582 million tons.

World consumption will also be a record (8.3 billion tons), surpassing nine years ago. The largest increase in consumption is expected in India – by 6.8%, to 1.103 billion tons, as well as in European countries (by 5.7%, to 685 million tons), forced to temporarily return to coal due to record high prices for natural gas , low hydropower generation and the closure of nuclear power plants. Consistently high demand for coal in China: in 2022 it will increase by 0.4%, to 4.25 billion tons. The IEA believes that demand for coal until 2025 will be sustainable due to demand in Asia.

Russia is currently not disclosing official energy export statistics. According to Metall Expert, the reduction in coal exports in January-September amounted to 7.5% in annual terms (see “Kommersant” dated November 15). Exports of Russian thermal coal this year may indeed fall by about 10%, but it is difficult to say whether the fall will continue next year, Boris Krasnozhenov from Alfa Bank believes. Demand for thermal coal will continue to grow in Asian markets. Thus, the analyst says, in September, the Chinese authorities confirmed the start of construction of additional coal-fired generating capacity with a total installed capacity of 165 GW, and new coal-fired generating capacity in China could reach 270 GW by 2025. In addition, despite the rapid development of green energy, coal generation will remain the mainstay of China’s energy mix for at least this decade, Mr. Krasnozhenov says. As for India, the country is constantly increasing its own production and imports of thermal coal. India is not a traditional market for Russian thermal coal, but at the current price level and due to the discount, Russian exporters have managed to enter the Indian market. New generation facilities being built in other Asian countries (Thailand, Malaysia and Vietnam) are also mainly based on coal. Thus, the growth of coal production in the countries of Southeast Asia will not affect the possibilities of Russian exporters, the expert concludes.

Evgeny Zainullin