EU Embargo On Russian Coal Goes Into Effect
The EU agreed months ago, in April, to impose a ban on imports of coal and other solid fossil fuels from Russia as of August 2022 as part of the fifth round of EU sanctions against Russia over its invasion of Ukraine. The package includes “a prohibition to purchase, import or transfer coal and other solid fossil fuels into the EU if they originate in Russia or are exported from Russia, as from August 2022.”
“The 10th of August is the end of the wind-down period for the import of Russian coal and no further exemption will apply,” a spokesperson for the European Commission told Reuters on Wednesday.
The EU was a large importer of Russian coal before the war in Ukraine and now will have to source more coal from alternative suppliers, which is set to drive global coal prices higher and upend seaborne coal shipments.
In 2021, the European Union imported 46% of coal imports from Russia, according to the European Commission. Energy—including coal, oil, and natural gas—represented 62% of all EU imports from Russia, and cost $102 billion (99 billion euro) last year.
The full EU ban on Russian coal is set to keep global coal prices elevated for years, according to a Fitch Solutions analysis carried by Bloomberg earlier this week.
Fitch hiked its forecast for the Asian thermal coal benchmark for coal loaded at Australia’s Newcastle terminal for this year and for the next four years. Fitch now sees Asian thermal coal prices averaging $320 per ton in 2022, up from $230 a ton previously expected. For the period 2022 through 2026, the forecast was raised to an average of $246, up from $159 per ton previously expected.
By Tsvetana Paraskova for Oilprice.com