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Coal embargo reduces Russia's export revenues by 5 billion euros

One of the key components of the fifth sanctions package against Russia, which was approved by the European Council on April 8, 2022, is an import embargo on coal from Russia. According to the EU Commission, a quarter of all Russian coal exports are affected. Based on coal prices in 2021, the EU embargo will result in a loss of export revenue for Russia of around €5 billion per year. The regulation will take effect 120 days after publication in the Official Journal of the EU, i.e. in August 2022.

The largest importer of hard coal within the EU - and this also applies to imports from Russia - is Germany. In 2021, a total of 41.1 million tons of hard coals (including coke) were imported into Germany - of which 20.5 million tons, corresponding to 50 percent, came from Russia. The second largest importer of hard coals within the EU is Poland. According to Euracoal, hard coal imports from Poland amounted to 12.6 million tons in 2021; of this, 8.3 million tons were purchases from Russia. Shipments to other countries, many of which were made through ports in the Netherlands, were comparatively small.

Russia's calculated €5 billion in export revenues for deliveries of hard coal to the EU in 2021 represent only a small portion of the country's total export revenues for energy raw materials and energy products. In terms of deliveries to the EU, the value of Russia's export revenues for oil - crude and products - in 2021 is put at around 70 billion euros and for natural gas at around 45 billion euros. That adds up - including coal - to 120 billion euros for 2021. The figures published recently in the media - some of which are much higher - are not based on the prices according to the contracts concluded, but are based on the price peaks reached at the beginning of March 2022.

Article by Hans-Wilhelm Schiffer
Article by Hans-Wilhelm Schiffer