BAKU, Azerbaijan, December 20. Russian thermal coal exports are projected to have fallen sharply in 2024, with an 8% decline bringing the total to 149 million tons (Mt), according to the International Energy Agency (IEA), Trend reports.
The drop stems from a combination of international sanctions, logistical bottlenecks, and rising operational costs, which have significantly impacted the profitability and accessibility of Russian coal on global markets.
In February, the US escalated its sanctions against Russia by adding major coal producers, including Suek and Mechel, to its Specially Designated Nationals (SDN) list. Over the course of the year, the sanctions widened to encompass other key players, such as Sibanthracite, Elga, Coalstar, SDS-Ugol, and Stroyeservis. By August, approximately half of Russian coal exports were subject to US sanctions.
"The fear of secondary sanctions and payment disruptions has deterred even traditionally compliant markets," the IEA noted. Countries such as South Korea, which has not officially banned Russian coal, have still seen a decline in imports due to these pressures. In the first three quarters of 2024, Russian coal shipments to Korea dropped by 7 Mt to 12 Mt, as some tenders explicitly barred Russian-origin coal.
China, another key buyer, reduced its imports of Russian thermal coal by 11 Mt (18%) during the first nine months of the year. This decline occurred despite China’s overall strong coal imports in 2024. Factors contributing to this shift include the reintroduction of import tariffs—6% on thermal coal and 3% on metallurgical coal—which exclude Australia and Indonesia due to free trade agreements, making Russian coal less competitive.
Other markets also cut back, with Türkiye and India reducing their imports by 2.2 Mt and 2.6 Mt, respectively.
Logistical hurdles further compounded the challenges for Russian coal. Railway bottlenecks in eastbound routes prioritized more profitable metallurgical coal over thermal coal. This issue was particularly acute in the Kuzbass region, prompting local authorities to request an increase in rail freight capacity. Meanwhile, rising railway tariffs and port transshipment fees, such as the steep rates at the Black Sea port of Taman, led to a drastic 80% reduction in coal exports from the port during the first quarter.
In an effort to alleviate pressure on exporters, the Russian government suspended its coal export duty—a 4-7% surcharge tied to the rouble’s exchange rate—for six months starting in May 2024. However, the relief measure appears to have offered limited respite amid broader economic and logistical challenges.
The IEA suggests that the outlook for Russian thermal coal exports remains bleak, as international markets grow increasingly wary of sanctions and logistical inefficiencies continue to hamper trade.