In the face of a planned European Union ban on Russian imports and a drive to ease tight gas supplies, European purchasers are expanding imports of coal from around the world.
The European Commission proposed further penalties against Russia on Tuesday in response to its invasion of Ukraine, including a ban on the purchase of Russian coal and the entry of Russian ships into EU ports. The latest suggested limits come at a time when future gas supply from Russia to the EU are in doubt, after the Kremlin’s demand that buyers begin paying Russian gas giant Gazprom GAZP.MM in roubles later this month.
In March, European countries imported a total of 7.1 million tonnes of thermal coal, which is used in power and heat generation, a 40.5% increase year-on-year and the highest level since March 2019, analysis from shipbroker Braemar ACM, based on ship tracking data, found.
“Despite Russian coal shipments to Europe in March still continuing at pre-war levels, the expected alteration in coal flows into Europe has started to show,” Braemar dry bulk analyst Mark Nugent said.
“Shipments from Colombia and the United States have been strong in response to the conflict with Atlantic suppliers providing the most cost-efficient alternative for European end-users.”
The EU depends on Russia for around 45% of its coal imports, 45% of its gas imports and around 25% of its oil imports, according to the European Commission website. EU diplomats failed to approve on Wednesday the new proposed sanctions as technical issues needed to be addressed, including on whether a ban on coal would affect existing contracts. Diplomats were optimistic about the possibility of reaching a compromise in a new meeting of EU envoys on Thursday, sources said.
