# Factbox-Europe ramps up coal imports as energy supply fears grow
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2022-07-26
Category: NEWS
Category URL: https://financedigest.com/category/news
Meta Title: European Coal Rush: Buyers Temporarily Set Aside Green
Meta Description: Discover how Europe is handling the coal supply crisis, the impact of the energy crunch, alternative sources, and the surge in coal imports from Australia,
URL: https://financedigest.com/factbox-europe-ramps-up-coal-imports-as-energy-supply-fears-growhtml

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By Jonathan Saul

LONDON (Reuters) – European buyers have had to temporarily set aside green aspirations in a rush for coal as the region’s energy crisis deepens, ramping up shipments from Australia, South America, Colombia and South Africa while tightening the global market.

Russia has resumed pumping gas via its biggest pipeline to Germany after a 10-day outage, allaying some of Europe’s immediate supply fears but not enough to end the threat of rationing to cope with potential winter shortages.

The European [Union has told member states](https://www.financedigest.com/ukraines-first-lady-to-be-guest-of-honor-at-eu-state-of-union.html "Ukraine’s first lady to be guest of honor at EU State of Union") to cut gas usage by 15% until March as an emergency step.

Here are some details on coal imports into Europe.

REPLACING RUSSIA

Russia supplies 70% of all Europe’s thermal coal imports, which is used in power generation, but that supply has to be replaced from mid-August when an EU ban on Russian coal imports [comes into force](https://www.financedigest.com/the-glorious-twelfth-what-underwriters-should-be-doing-as-the-insurance-act-comes-into-force.html "The Glorious Twelfth: What Underwriters Should Be Doing As the Insurance Act Comes Into Force").

Thermal coal is considered one of the most carbon-heavy [energy sources and Europe had been weaning itself off the fuel to meet pollution regulations and climate targets](https://www.financedigest.com/schneider-and-greenyellow-target-smaller-businesses-with-energy-saving-technology.html "Schneider and GreenYellow target smaller businesses with energy saving technology").

Germany is trying to extend the life of 10 gigawatts (GW) of mothballed coal capacity until March 2024.

Poland, and to a lesser extent Germany, can substitute gas use by gas-fired power plants by running coal plants at full capacity, provided that enough coal is available,” ING [bank said in a report](https://www.financedigest.com/bank-funding-for-renewables-stagnates-vs-oil-and-gas-report.html "Bank funding for renewables stagnates vs oil and gas – report").

Analysts say imports of thermal coal from the 27 member EU bloc plus the UK will be 43% higher by [next year](https://www.financedigest.com/novartis-to-spin-off-generics-business-sandoz-next-year.html "Novartis to spin off generics business Sandoz next year") versus this year, and this will result in an additional 10 million tonnes of CO2 released into the atmosphere.

Certain grades of Russian [coal have been favoured by European](https://www.financedigest.com/european-gas-price-surge-prompts-switch-to-coal.html "European gas price surge prompts switch to coal") buyers. Producers such as Australia, the United States, Colombia and [South Africa](https://www.financedigest.com/inmobi-and-coca-cola-win-mma-smarties-south-africa-award-for-beat-can-campaign.html "InMobi and Coca-Cola Win MMA SMARTIES South Africa Award for Beat Can Campaign") can supply those grades but might not be able to fully fill the gap due to domestic demand and global competition for supplies.

[SOURCES OF SUPPLY](https://www.financedigest.com/exclusive-kazakh-mcdonalds-shut-outlets-temporarily-after-halting-supplies-from-russia-sources.html "Exclusive-Kazakh McDonald’s shut outlets temporarily after halting supplies from Russia – sources")

According to seabourne data based on ship tracking by ship broker Braemar, [European countries imported 7.9 million](https://www.financedigest.com/collegiate-ac-and-shuman-capital-launch-e300-million-european-student-living-fund.html "Collegiate AC and Shuman Capital launch €300 million European Student Living Fund") tonnes of thermal coal in June, more than doubling year-on-year, although nearly 2 million tonnes lower than in April and May.

Imports from Colombia reached 1.2 [million tonnes](https://www.financedigest.com/revealed-1-45-million-tonnes-of-e-waste-is-produced-by-households-businesses-per-annum.html "Revealed: 1.45 million tonnes of e-waste is produced by households & businesses per annum") in June, compared with just 287,000 tonnes in June last year, despite heavy rainfall curbing production, Braemar analysis showed.

Australian [thermal coal](https://www.financedigest.com/exclusive-hsbc-fund-arm-toughens-thermal-coal-policy-to-curb-climate-change.html "Exclusive-HSBC fund arm toughens thermal coal policy to curb climate change") purchases in Europe have continued to increase in recent months. In June, thermal coal imports totalled 1.1 million tonnes, the [highest on record](https://www.financedigest.com/zinc-eugenol-market-estimated-to-record-highest-cagr-by-2021-2031.html "Zinc Eugenol Market Estimated to Record Highest CAGR by 2021-2031 ").

Imports from the United States in June reached 618,000 tonnes, rising by 27.9% year-on-year, but a 62.7% drop month-on-month and the [lowest level since](https://www.financedigest.com/ukraine-war-energy-crisis-send-german-business-sentiment-to-lowest-level-since-june-2020.html "Ukraine war, energy crisis send German business sentiment to lowest level since June 2020") January.

Some 854,000 tonnes arrived from [South Africa](https://www.financedigest.com/ancs-failed-foreign-policy-hurting-south-africa.html "ANC’s failed foreign policy hurting South Africa") in June versus no shipments in June last year as miners continued to ease rail constraints in the country.

Data from maritime and commodities data platform Shipfix showed there has separately been [steady growth in imports from Indonesia in recent](https://www.financedigest.com/german-yields-steady-spreads-tighten-after-recent-repricing.html "German yields steady, spreads tighten after recent repricing") weeks – a previously less active source of European imports – and highlighting the scramble for stocks.

Shipfix [data also pointed to imports](https://www.financedigest.com/leaders-recognise-the-importance-of-green-transport-at-cop27-but-we-need-data.html "Leaders recognise the importance of green transport at COP27, but we need data") from African producers, which are small global suppliers, including from Mozambique, Namibia and Nigeria.

[RUSSIAN IMPORTS FALL](https://www.financedigest.com/russian-retail-sales-fall-deeper-jobless-rate-rises-in-sept-data.html "Russian retail sales fall deeper, jobless rate rises in Sept – data")

Russian imports into [European countries](https://www.financedigest.com/four-european-countries-call-for-special-treatment-of-defence-in-eu-debt-rules-document.html "Four European countries call for special treatment of defence in EU debt rules – document") have already started to decline and reached 2.3 million tonnes in June, which was the lowest level in the past 12 months, Braemar data showed.

According to separate analysis Shipfix, there were no new [orders for the week of July 18 to transport coal from Russia](https://www.financedigest.com/stocks-slide-oil-jumps-as-russia-orders-troops-to-ukraine-regions.html "Stocks slide, oil jumps as Russia orders troops to Ukraine regions") to Europe, underscoring the ban already starting to bite.

(Reporting by Jonathan Saul, editing by Nina Chestney and Mark Potter)


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