HomeMediaLatest NewsThe global energy crisis has brought coal out of the shadows and relegated the climate agenda to the background

The global energy crisis has brought coal out of the shadows and relegated the climate agenda to the background

10 October 2022

Salikhov Marcel R. President, Principal Director on Economic Studies, Head of the Economic Department

Marcel Salikhov, President of the Institute for Energy and Finance, commented to Ekonomika Segodnya on the prospects for the coal industry development during the energy crisis.

The coal industry is of great importance, especially during the energy crisis, Marcel Salikhov says. But it should be borne in mind that Asian partners traditionally want to buy energy resources at a large discount.

“Naturally, the coal industry is preserved and will not go anywhere, but we must understand that the situation is complicated by the embargo imposed on Russian coal by the EU on August 1, this creates big problems for the industry. Accordingly, coal should be redirected to other markets, mainly to Asia. Everyone is aware of the logistical problems associated with the capacity of the railways. So far, there are no critical problems, and they are unlikely to be, even if coal production is significantly reduced. The global energy crisis, which is currently observed, leads to the fact that energy resources from Russia, in spite of everything, are in demand,”the economist emphasized.

Salikhov notes that when exporting coal, by analogy with other types of fuel, Russia has to provide a discount that Asian buyers traditionally demand.

The discount for coal for Asian partners is much higher than for oil due to problems with logistics. In general, coal is sold, but this process is launched at the expense of discounts, while coal companies and the federal budget are the first to suffer losses, the expert notes.

Marcel Salikhov believes that the climate agenda, like any long-term program, is now rightly relegated to the background, as consumers and the energy sector have more pressing problems amid all geopolitical problems. But, nevertheless, with the normalization of the political and economic background, decarbonization issues will again come to the fore. In an energy crisis, coal becomes an airbag, but this will not always be the case.

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