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Europe seeks alternatives to Russian coal
The decision by Russia to undertake a “special military operation” in Ukraine as of 24 February has impacted coal producers worldwide, as sanctions against the aggressor mean coal importers are now having to source alternative supplies.
The EU has totally banned Russian coal imports as of 10 August, at a time when the international coal market is already in a very tight situation. Euracoal, for example, now aims to secure 50mt (million tonnes) of coal from a combination of the US, Australia, Indonesia, Colombia and South Africa to replace Russian imports.
In 2021, Europe’s biggest coal users imported slightly more than 44mt, but had already bought 41mt in the first half of 2022 from the five main exporting coal producing nations.
Europe has mainly turned to the US, where thermal coal demand has fallen in recent years. Australia has been another good alternative source, since China refuses to import any of that country’s output as part of a diplomatic boycott. Its high heating value offsets the longer distance the coal now needs to travel.
Colombia is also being turned to by the Europeans, but lacks the production capacity to increase output sufficiently to meet all demand.
South African imports have double in the first two quarters, although there are doubts whether this increase can be maintained over the longer term, given rail bottlenecks at Richards Bay and prevailing weather conditions.
Finally, while imports from Indonesia are higher than they were last year, the actual total was still below 2mt, because of the low grade coal it exports. Capacity in that country also remains limited. Barry Cross
So far this month, at the time of writing in excess of 622,000 tonnes of wheat have left Ukraine through the so-called ‘Grain Corridor’.
In July, Russian and Ukrainian officials signed a deal with Turkey and the UN in Istanbul to allow ships to transport grain out of the region via a grain corridor.
The agreement allows Ukraine to resume shipments of grain from three key Ukrainian ports in the Black Sea — Odesa, Chernomorsk and Yuzhny — to meet massive demand from the global market, while Russia would be able to export grain and fertilizers.
It is expected that 22 million tonnes of grain and other agricultural products stuck in Ukraine’s Black Sea ports due to the war will now be able to be transported out of the region via cargo vessels.
The conflict between Ukraine and Russia had halted exports, threatening world food security and caused prices of essential goods including cooking oils, fuels, fertilizer, wheat and barley to soar.
UN Secretary-General Antonio Guterres and Turkish President Recep Tayyip Erdogan oversaw the signing of The Safe Transportation of Grain and Foodstuffs from Ukrainian Ports Document. The agreement will establish a control centre in Istanbul, staffed by UN, Turkish, Russian and Ukrainian officials, that will run and coordinate the grain exports. The agreement includes provisions to check ships transporting the grain for weapons and for the safe passage of vessels along the grain corridor.
“This is an agreement for the world,” said Guterres at the signing ceremony. “It will bring relief for developing countries on the edge of bankruptcy, and the most vulnerable people on the edge of famine, and to help stabilize global food prices, which were already at record levels, even before the war,”
As of 18 August, a total of 43 vessels had sailed for grain shipments, according to Turkey’s National Defense Ministry.
Odesa is one of the three key ports permitted to ship grain as part of the ‘Grain Corridor’ agreement. The EU’s total ban on Russian coal imports means importers are having to seek alternative supplies.
